Low carbon opportunities

In early 2021, we established a multidisciplinary Low Carbon Technologies organization. The organization’s remit is to support our net-zero ambition on Scope 1 and Scope 2 emissions, understand the low-carbon energy landscape and prioritize opportunities for future competitive investment. We are approaching this effort with the same discipline we follow in our traditional business investment and capital allocation process. This includes keeping costs low, leveraging competencies, identifying viable economic opportunities and anticipating and managing risk while focusing on projects with competitive returns potential.  

We recognize the important role that CCS and hydrogen could play in decarbonizing the global economy. We intend to apply our disciplined approach to the development of these new opportunities through clear investment criteria and a focused strategy. We have prioritized opportunities in these technologies as they offer potential for competitive returns and align closely with our technical competencies and global reach. Since 2021, we have advanced our positions in both technologies, including offering support to drive innovation, described in more detail in the following sections.  

Carbon capture and storage

CCS involves capturing CO₂ from concentrated sources — such as power plants or industrial sources — preprocessing, compressing, transporting and injecting the CO₂ into geologic formations underground and monitoring the storage site. This process helps reduce the amount of CO₂ released into the atmosphere.  

ConocoPhillips is leveraging our land positions, technical expertise, project development skills and safety commitment to evaluate future cost-effective and permanent carbon storage opportunities. We have assembled an internal team of subsurface and surface experts, with support from our Land, Regulatory, Legal, Government Affairs, Commercial, Environmental and Sustainable Development and Stakeholder Relations teams, and are actively engaged in subsurface characterization, business development, appraisal and land acquisition to mature these opportunities. 

We have received approved permits from the Texas Railroad Commission to drill two exploratory wells on leased property in Refugio County, Texas, to evaluate subsurface formations for potential permanent geologic storage of carbon dioxide and started field activities in May 2024. Throughout 2024, ConocoPhillips will engage with local stakeholders, collect and analyze technical information from the appraisal activities and determine the viability of the leased area as a potential CO₂ sequestration site. ConocoPhillips is conducting local stakeholder engagement activities in Refugio, Aransas and San Patricio counties and, when appropriate, seeks regulatory approvals from relevant federal and state regulatory agencies. 

We have leased land in Cameron Parish, Louisiana, and have ongoing permitting activities for an appraisal well in that region.  

We will continue to evaluate development of low-carbon projects, particularly on the U.S. Gulf Coast, including a CCS project as part of the previously described liquefied natural gas (LNG) work with Sempra Infrastructure.  

We are a member of Pathways Alliance Inc., a group of Canada’s largest oil sands producers working together to address climate change by reducing Scope 1 and Scope 2 emissions from member operations. One of the key actions is the proposed foundational Alliance project, which includes plans for a CCS network to transport captured CO₂ from oil sands facilities and sequester it deep underground at a storage hub. Supportive fiscal and regulatory frameworks and the development of technologies are critical to advancing this ambition.   

Hydrogen

ConocoPhillips is also evaluating technologies that will enable the cost-effective production of hydrogen. We have identified two types of hydrogen manufacturing for bulk fuel supplies in both hydrogen and ammonia form that have technical and commercial adjacencies that leverage the company’s core competencies and the potential to grow into a scalable business — hydrogen from natural gas with associated CCS (“blue hydrogen”) and hydrogen from the electrolysis of water using electricity from renewables (“green hydrogen”). 

We are evaluating optimum locations for low-cost hydrogen manufacturing, monitoring development of the market, and assessing access routes to demand centers. Success factors for blue hydrogen are a reliable supply of low-cost natural gas and proximity to subsurface sites suitable for CCS. For green hydrogen, the success factors are low-cost supplies of renewable electricity, water and large-scale electrolysis. 

Technologies for manufacturing both blue and green hydrogen are rapidly evolving, and, as with CCS, we are pursuing various ways to access these technologies and qualify them for use. Leveraging our global reach and our technical expertise, we are evaluating and high-grading hydrogen production and marketing opportunities, including ammonia as a hydrogen carrier, both domestically and globally.  

Markets for hydrogen and ammonia are nascent and require further maturity before major investment decisions can be taken. Commitments across the value chain, including long-term offtake commitments from buyers are needed to connect the value chain and develop the market to enable hydrogen delivery at scale.

In early 2022, we made an investment to support the development of a novel turquoise hydrogen production technology from Ekona Power Inc., a Vancouver-based hydrogen technology venture. Ekona’s new methane pyrolysis technology platform is expected to produce low-cost hydrogen from methane. The technology converts existing methane streams into hydrogen and solid carbon to reduce CO₂ emissions when applied. This investment represents an opportunity to leverage our existing infrastructure and create optionality at the front end of new technologies that will be important to the future of energy. We continue to follow the project’s development. 

Low carbon equity investments 

ConocoPhillips has been an early-stage investor in Radia, a wind energy company, as part of our program to explore different technologies that can help reduce our Scope 1 and Scope 2 emissions. Radia Gigawind offers the potential for an advantaged power solution with lower cost of supply and high-capacity factor. 

We have also invested in LongPath Technologies, a scalable laser-based continuous emissions monitoring solution with the potential to cover targeted assets or provide basin-wide multi-operator coverage.