A well-designed carbon tax or other legislative proposal to fix and impose a price on carbon dioxide or other GHGs should meet the following principles:  

Economy-wide: A carbon tax designed to fix and impose a price should apply as broadly across the economy as administratively practicable.         

Non-discriminatory: GHG emissions alone should form the basis of taxation. A carbon tax should not “pick winners and losers” among industries or emissions sources or discriminate in providing subsidies to energy sources. 

Uniform: A carbon tax should apply to all GHG emissions at the same rate on a “units of carbon dioxide equivalent” basis using the IPCC standard 100-year global warming potential.      

Our approach to public policy engagement on climate change has evolved. However, we remain consistent in our view that market-based solutions at national and global levels, rather than a patchwork of less effective regulatory approaches, are most likely to be effective in reducing GHG emissions.    

Shortly after the merger of Conoco and Phillips Petroleum in 2003, we published our first global climate change position. Since then, we have consistently used our Sustainability Report to detail our commitments, priorities and actions. We have also participated in the Carbon Disclosure Project (now CDP) questionnaire in 2003.

Engagement Timeline

In 2004, we described actions that we would be taking to address climate change, including:  

• Assessing data. 
• Developing objectives to reduce GHG emissions. 
• Improving operational efficiency. 
• Developing climate change considerations for project planning and approval processes. 
• Engaging in discussions on climate change through the International Petroleum Industry Environmental Conservation Association (now Ipieca). 
• Joining the International Emissions Trading Association (IETA). 

In 2005, we began trading in the European Union Emission Trading System and later established a team within our London-based Commercial team to originate carbon offsets through the UNFCCC’s Clean Development Mechanism and Joint Implementation program. 

Through our membership in the U.S. Climate Action Partnership (USCAP) beginning in 2007, we actively participated in efforts to design an effective legislative approach.  

In 2008, we adopted and published our first Climate Change Action Plan to systematically address climate change risk. 

In 2008, we adopted and published our first Climate Change Action Plan to systematically address climate change risk.  

In June 2009, the American Clean Energy and Security Act of 2009 (HR2454) (Waxman-Markey) bill passed the House of Representatives. Although the USCAP Blueprint for Legislative Action was considered influential in the design of the legislation, we had serious concerns about some of the detailed elements in the bill. Following passage of the House bill, our focus turned to addressing issues of concern in the Senate version of the legislation. In order to intensify our company’s focus and resources on addressing the key issues, including the important role that natural gas can play in reducing U.S. GHG emissions, we announced in February 2010 that the company would not be renewing our membership in USCAP.

Through more direct engagement, we were successful in helping to develop draft legislation that incorporated a more equitable approach to energy sectors while maintaining environmental effectiveness.  We issued a statement regarding the draft legislation introduced in the Senate in May 2010. 

Since 2010, we’ve continued to work toward approaches that are practical and effective, including active participation in dialogue with trade associations like the American Petroleum Institute (API), industry partners and the government to advocate for smart policy solutions. Detailed discussion of our major engagements on regulatory and legislative issues is provided later in this section. 

In 2021, we made the decision to rejoin IETA to further our advocacy for market solutions to the climate challenge. IETA is a nonprofit business organization created in 1999 to establish a functional international framework for trading in GHG emissions reductions. IETA members seek to develop an emissions trading regime that results in real and verifiable GHG emissions reductions, while balancing economic efficiency with environmental integrity and social equity. IETA is a global carbon policy organization, and they support carbon offset trading systems. Their membership includes leading international companies from across the carbon trading cycle. IETA have a seat on the Task Force for Scaling Voluntary Carbon Markets (TSVCM). 

Examples of Regulatory Engagement 

Collaborating with a broad range of stakeholders on effective climate change policy and GHG emissions solutions is key to solving the climate change challenge. 

In 2014, we publicly supported the Gas Capture Plan in North Dakota, now required, which took a pro-active approach to flare gas reduction. We entered into agreements with pipeline companies to ensure the availability of gathering infrastructure necessary to reduce emissions. 

In 2016, we supported the U.S. Bureau of Land Management (BLM) Onshore Order 1, electronic filings, as the proposed changes reduced work and errors and sped up response time for both industry and the government. 

Directly and through our trades we have worked to advance the development and deployment of carbon capture and storage to achieve a cleaner energy profile and improve U.S. economic security. In 2018, Congress passed the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions Act to enhance the 45Q tax credit to further incentivize carbon capture and storage technology deployment in the United States. The primary issue with the 45Q tax credit is the interpretation of what constitutes secure geological storage (SGS). In particular, we support the adoption of a commercially reasonable ISO standard to demonstrate secure geological storage in the context of captured carbon dioxide that gets sequestered underground for enhanced oil recovery projects. The standard should establish criteria for transparency and assurance that carbon dioxide removal is achieved. We also support self-verification of compliance with the ISO standard given that our tax officer would attest to satisfying the requirements of 45Q under penalties of perjury. 

In 2022-2023, the Environmental Protection Agency (EPA) and Bureau of Land Management (BLM) have each proposed regulations targeted at reducing methane emissions from the oil and gas sector. We have engaged the regulators throughout the rulemaking process for each proposal and provided substantial technical comments to aid in the development of workable regulations through our trade associations. Our advocacy efforts highlight and build upon the progress industry has made to reduce emissions and continuously improve environmental performance.  

Recent Legislative Engagement 

In 2019, we worked within the broad coalition of Climate Leadership Council (CLC) members to better define details of the overarching implementation plan. That included work on topics such as carbon price escalation rates, points of taxation, regulatory backstop provisions, high energy-cost region challenges and a border carbon adjustment. While the policy work continues with CLC members, the results of that engagement are reflected in the more detailed CLC plan released in early 2020. We also engaged with members of Congress directly and through Americans for Carbon Dividends. This included reviewing several proposed climate bills and continuing to offer technical feedback on those bills to elected representatives and their staff. The company remains engaged with representatives from both sides of the political spectrum. 

In 2022, ConocoPhillips joined the Oil Sands Pathways to Net-Zero Alliance, which includes Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy. Together this group represents the companies operating approximately 95% of Canada’s oil sands production. The goal of the alliance is to achieve net-zero GHG emissions from oil sands operations by 2050 to help Canada meet its climate goals, including the country’s Paris Agreement commitments and 2050 net-zero aspirations, with the help of CCS. ConocoPhillips is partnering with the founding members of the Pathways Alliance and governments to accelerate efforts to bring about meaningful change.