against us.
To the extent
these expenditures, as with all costs,
are not ultimately reflected in
the prices of our
products and services, our business, financial condition, results
of operations and cash flows in future
periods
could be materially adversely affected.
Existing and future laws, regulations and internal initiatives
relating to global climate change, such as
limitations on GHG emissions may impact or limit our business plans,
result in significant expenditures, promote
alternative uses of energy or reduce demand for our products.
Continuing political and social attention
to the issue of global climate change has resulted
in both existing and
pending international agreements
and national, regional or local legislation and regulatory
measures to limit GHG
emissions, such as cap and trade regimes, specific
emission standards, carbon taxes,
restrictive permitting,
increased fuel efficiency standards
and incentives or mandates for renewable
energy.
Although we may support
many of these legislative and regulatory
measures, how and when they are enacted could
result in a material
adverse effect to our
business, financial condition, results of operations
and cash flows in future periods.
For example, in November 2021,
the U.S. Environmental Protection
Agency published a Proposed Rule that would
revise the regulations governing
the emission of GHG and volatile organic compounds
from new oil and gas
production facilities, and emission guidelines
for states to use when revising
Clean Air Act implementation plans to
limit GHG emissions from existing oil and gas
facilities.
Although the company supports the direct federal
regulation of methane from new and existing
sources,
the final form and substance of any regulations
are not
currently known and could result in additional
capital expenditures and compliance,
operating and maintenance
costs, any of which may have
an adverse effect on our business
and results of operations.
Additionally,
in 2021, the U.S. joined the international community at
the 26th Conference of the Parties (COP26).
At the conclusion of COP26, the U.S. and nearly
200 other counties agreed to the Glasgow Climate
Pact,
committing to revisiting and strengthening
their current emissions targets
to 2030 in 2022 and finalizing the
outstanding elements of the Paris
Agreement.
In addition, our operations continue
in countries around the world
which are party to the Paris Agreement.
The implementation of current
agreements and regulatory measures,
as
well as any future agreements
or measures addressing climate change and
GHG emissions, may adversely impact
the demand for our products, impose taxes
on our products or operations or require
us to purchase emission
credits or reduce emission of GHGs from our operations.
As a result, we may experience declines in commodity
prices or incur substantial capital expenditures
and compliance, operating, maintenance
and remediation costs,
any of which may have an
adverse effect on our business
and results of operations.
In September 2021, we announced an improvement
to our Paris-aligned climate risk framework,
whereby we
committed to an improvement
to our targets for reduc
ing our scope 1 and 2 emissions intensity on both a
gross
operated and net equity basis and reaffirmed
our commitment to advocate
for the reduction of scope 3 emissions
through our support for a U.S. carbon
price.
Compliance with, and achievement of,
climate change-related
internal initiatives such as the foregoing
may increase costs, require
us to purchase emission credits, or limit or
impact our business plans.
If we are not successful in select internal initiatives,
we may be adversely affected
and
potentially need to reduce
economic end-of-field life
of certain assets and impair associated
net book value.
Increasing attention to
global climate change has also resulted in pressure
from and upon stockholders,
financial
institutions and/or financial markets
to modify their relationships with oil and gas
companies and to limit
investments and/or funding to
such companies.
For example, Harvard University
announced in September 2021
that it will stop investing
its $42 billion endowment in fossil fuels and will let its current
investments expire without
renewal.
As public pressure continues to
mount, our access to capital on terms we
find favorable (if it is available
at all) may be limited and our costs
may increase,
our reputation could be damaged or our business
and results of
operations may be otherwise adversely
affected.
Furthermore, increasing attention
to global climate change has resulted
in an increased likelihood of governmental
investigations and private
litigation, which could increase our costs
or otherwise adversely affect our business.
Beginning in 2017, cities, counties, governments
and other entities in several states
in the U.S. have filed lawsuits
against oil and gas companies,
including ConocoPhillips, seeking compensatory
damages and equitable relief to