Addressing the energy transition is one of the most important issues for our company. ConocoPhillips intends to play a valued role in the energy transition by executing three objectives: meeting energy transition pathway demand, delivering competitive returns on and of capital and achieving our net-zero emissions ambition. We call this the Triple Mandate, and it represents our commitment to create long-term value for our stakeholders.

We were the first U.S.-based oil and gas company to adopt a Paris-aligned climate-risk strategy with an ambition to become a net-zero company for operational (Scope 1 and 2) emissions by 2050.

Net-Zero Roadmap

Though this work is just beginning, the Net-Zero Roadmap will be the primary mechanism for how our planning translates to action and prioritizes near-term Scope 1 and 2 emissions reduction efforts by identifying and executing viable abatement options. The roadmap details how we intend to fulfill our longer-term commitments through planning, fostering technological advancements and partnering with peers and external stakeholders to explore pilot projects that could abate challenging operational emissions.

Each of our operating business units is developing a roadmap to describe strategies and plans. When rolled up, the roadmaps will inform our technology development, operations and engineering teams, along with our development staff and project timing, while allowing us to forecast and prioritize for the needs of the future.

The Net-Zero Roadmaps will also:

• Empower each business unit to progress initiatives specific to its needs.
• Leverage the marginal abatement cost curve (MACC) process to prioritize projects.
• Promote collaboration between business units on projects which are scalable or transferable.
• Enable design changes to new facilities to reduce emissions.
• Prioritize pilot projects and tests of emerging technologies to address our most significant needs.
• Enhance the tools and processes we use to prioritize, execute and track our emissions reduction efforts.

“Delivering our net-zero ambition is a key part of the company’s energy transition plan,” said Warwick King, vice president, Low Carbon Technologies. “The Net-Zero Roadmaps will be a vital tool to help identify projects that will reduce and eliminate operational GHG emissions.”

Read more about our Net-Zero Roadmap.

Using the MACC to Measure Reductions

An essential element of our Net-Zero Roadmap is the MACC, a process to prioritize the most impactful emissions reduction projects. To drive accountability for the emissions that are within our control, the MACC provides a continuous pipeline of projects with short-, medium-, and long-term emissions reduction targets.

During our annual budget planning process, potential GHG emissions reductions projects are reviewed and ranked. The MACC plots the breakeven cost of CO₂e reduction considering capital cost, operating costs and the potential increased revenue for each project against the cumulative GHG emissions that can be reduced. Project funding is based on a number of criteria including:

• Cost: Cost per metric ton of CO₂e abated (i.e. the lowest $/metric tons of CO₂ equivalent),
• Sustainable Reduction: Reduces emissions permanently.
• Scalability: Can be scaled-up to provide additional emissions reductions.
• Technology Readiness: Systems and processes proven to reduce emissions by the forecasted amount.
• Repeatability: Can be replicated in other business units.

We fund projects that have a break-even cost of up to $60/ metric tons of CO₂e, as well as projects that anticipate forthcoming regulatory changes. Approximately 70 projects were selected for funding in 2021 to begin execution in 2022. Of the projects ready to implement, the majority are in the U.S. Lower 48 and are related to venting and flaring.

“There is no one project or solution that will help us transition to a lower-carbon economy. It will require many different efforts, a lot of innovation, and collaboration across different industries, that will yield reductions in emissions. The MACC process and our Net-Zero Roadmap will help us to plan how we can do our part at ConocoPhillips,” noted Mark Hutcherson, Director, Low Carbon Projects & Technology.

Once a project is approved, the business unit has the accountability to deliver the project. These include production efficiency measures, methane and flaring intensity-reduction initiatives and asset electrification projects, to name a few.

Specific examples include:

•  Operational efficiency: Ensuring operational controls are put in place to monitor emissions. Streamlining facilities, tanks and equipment; improving waste heat utilization, insulation and power distribution; deployment of optimized artificial lift strategies.
• Methane: Implementing robust leak detection programs to ensure integrity of our system. Switching instrumentation from gas-driven to air-driven pneumatics; modifying facilities to reduce emergency gas venting.
• Flaring: Production curtailment to avoid unnecessary flaring during process upset conditions; incorporating vapor recovery units at facilities; recovering gas for sales.
• Electrification and combustion: Reducing combustion needs on drilling and completions; electrifying operations and pursuing renewable energy sources; conducting basin-wide electrification study in the Permian; evaluating a project to electrify central facilities in a portion of our Eagle Ford operations.

The chart above shows potential projects and pilots that are expected to be implemented in 2022. Projects below the axis are economic even without a cost of carbon. Projects above the axis assume a cost of carbon to achieve a breakeven net present value — the taller the bar, the higher the breakeven cost of carbon. The width of the bar indicates a best estimate of the annual emissions reduction should the project be undertaken. The MACC process was designed to facilitate corporate and business unit collaboration, enable global visibility on projects and establish a discretionary funding mechanism managed by the ConocoPhillips Executive Leadership Team (ELT) for emissions reduction opportunities across the company.

Project examples include:

• Australia — Battery Energy Storage System (BESS)
  The Australia Pacific LNG (APLNG) facility on Curtis Island, Queensland, Australia is progressing a BESS to function as power backup in case of electricity generator failure. Currently APLNG is powered by a number of Gas Turbine Generators (GTGs) with one spare GTG, which is running in reserve in the event another fails. A BESS would replace the spare GTG and act as the reserve electricity generator. This could result in a reduction of fuel gas required of at least 300 terajoules per year and is anticipated to abate over 16,000 metric tons of GHG emissions per year
• Gulf Coast — H2S Scavenger Centralization

In our Gulf Coast business unit, a project is underway to remove the need for pneumatic-powered scavenger injection pumps at each well pad through the installation of scavenger towers at each central facility location. The project could reduce emissions by around 11,250 metric tons per year.

• Norway — Ekofisk Local Wind Power Project
  ConocoPhillips Norway has committed to a detailed study of an offshore wind project to power operations at the Ekofisk complex in the North Sea. If the study proves viable, first power could occur as early as 2026, with two 11-megawatt offshore wind turbines that would feed power to the Ekofisk complex, reducing GHG emissions by approximately 60,000 metric tons per year.
• Permian — Expanding Continuous Methane Monitoring
  The Permian business unit has expanded its continuous methane detection capabilities as part of its “layers of protection” strategy for emissions identification and mitigation. To date, the pilot project has deployed over 15 AI-enabled camera systems and over 1,000 fixed methane sensors for methane detection at our highest exposure facilities.