Freshwater management

The oil and gas industry requires water, including freshwater, in its operations. We use water in the extraction, processing and refining of hydrocarbons, and for cooling associated with electricity generation at our facilities. As part of our project planning, we assess the impact of our activities on water availability and demand. We use a wide range of approaches to reduce water use and preserve water quality through on-site recycling and water reuse, purchasing treated wastewater for use as process water, employing processes to decrease water needs, and appropriately treating wastewater streams prior to their discharge.

In 2011, the net freshwater consumption at our operations was 2,342 million barrels, representing a 9 percent increase from 2010. We actively manage our water consumption and seek opportunities to reduce, reuse, and recycle water in our operations. For example, our Torrance, California, refinery purchases and uses recycled wastewater from a local municipal treatment plant for cooling tower makeup and boiler feed water, representing nearly 70 percent of total water consumption at this facility. In our heavy oil operations at Cold Lake, Canada, we use a variety of water-use-reduction measures, and about 85 percent of the water use on-site is treated, recycled water produced with heavy oil.

In 2011, we used the World Business Council for Sustainable Development’s (WBCSD) global water tool to identify regions where we operate that may have water scarcity concerns. Information on water stress and scarcity in the vicinity of our operations serves as an important part of risk management. Of our 115 major operating sites, we identified about 25 percent operating in regions that may have some degree of water stress or scarcity. These areas are located in 15 countries.

In 2011, our upstream companies introduced a process to enhance water management. Since then, the quantity and quality of water use data have been significantly improved and a water footprinting strategy has been instituted to better analyze our interactions with local water resources. In 2012, our major sites plan to review their water consumption rates to identify opportunities for responsible use. Those sites located in scarce or stressed regions plan to update their Environmental Business Plans to ensure effective water resource management.

There are a variety of projects in progress to reduce water consumption. Our King Ranch Gas Plant in Texas is planning a water recycling system using reverse osmosis to treat water for on-site reuse. This will significantly reduce water use and almost completely eliminate liquid effluent from the plant.

We believe engaging our peers on water management issues can improve overall petroleum industry performance. In 2011, we helped develop the Global Environmental Management Initiative Local Water Tool, which allows sites to identify and rank risks associated with the availability and reliability of water sources and wastewater discharge points. We piloted the tool at four of our sites and anticipate using the final version in 2012. Pilot sites found the tool useful in identifying potential risks, which we plan to address using management tools such as Environmental Business Plans. We also supported efforts to customize a version of the WBCSD global water tool specifically for the oil and gas industry in collaboration with the International Petroleum Industry Environmental Conservation Association (IPIECA).