Global Climate Change
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EOG’s Position on Global Climate Change

EOG supports efforts to understand and address the contribution of human activities to global climate change through the application of sound scientific research and analysis. In addition, the company believes that the reduction of air emissions throughout its operations is both in the best interests of the environment and a prudent business practice. A safety and environmental update that includes climate change issues is presented to the EOG Board of Directors annually.

EOG is aware of the increasing focus of local, state, national and international regulatory bodies on greenhouse gas (GHG) emissions and climate change issues. The company is also aware of legislation proposed by U.S. lawmakers to reduce GHG emissions. EOG will continue to monitor and assess any new policies, legislation or regulations and take appropriate actions.

EOG believes that any new climate change policies must be based on sound scientific and economic considerations, which are fully disclosed to the public, and rely on market forces to efficiently encourage consumer conservation and the development of alternative energy sources. Also, EOG believes that the application and enforcement of climate change policies and regulations should apply appropriately to all sectors of the economy and be uniform at the local, state, national and international levels. Moreover, EOG believes any emissions limits or standards imposed on industry should be based on reliable, available and economically feasible technology.

Based on data published by the U.S. Energy Information Administration, the statistical arm of the U.S. Energy Department, energy-related emissions of carbon dioxide, the GHG that is widely believed to contribute to global warming, have fallen 12 percent between 2005 and 2015. This reduction is due, in large part, to the use of natural gas in electricity generation. Since GHG emissions from the combustion of natural gas are among the lowest of any fossil fuel on a per-unit basis, EOG believes that the increased use of natural gas in preference to other fossil fuels could be a critical component of any climate change policy. EOG is capable of increasing its production of natural gas in response to increases in natural gas demand, where economically feasible.

EOG is a member of the American Exploration & Production Council (AXPC) and the Independent Petroleum Association of America (IPAA), national trade associations that represent U.S. independent crude oil and natural gas exploration and production companies. The AXPC and IPAA and their member companies have been active in voluntarily reducing methane emissions and support programs to reduce methane emissions. EOG strives to promote policies through these and other trade associations that are consistent with EOG’s position on global climate change.

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Emissions Reduction and Management; Emissions Reporting

It is important to EOG, for operational, environmental and economic reasons, to reduce air emissions from its operations. EOG’s facilities are specifically designed to minimize emissions and maximize recovery of all vapors. In addition to reducing flaring, EOG has, where operationally appropriate, installed specialized control equipment, such as vapor recovery units, vapor balance systems, high-efficiency combustion devices and multi-stage separator/flare stack systems, to minimize emissions.

EOG has also incorporated into its normal operating practices gathering infrastructure (i.e., pipelines), reduced emissions completion systems (i.e., “green completion” systems), multi-well pads, intermittent/low-bleed controllers, “instrument air” controllers, compressors equipped with emissions control technology, solar-powered chemical pumps and motor valves, ”thief” hatches and vent sealing valves as means of minimizing emissions. In addition, as part of its normal operating practices, EOG utilizes thermal/infrared cameras to identify and manage emissions at its facilities and periodically reviews its programs with a view to reducing, where operationally feasible, the number of compressors used.

Also, where operationally feasible, EOG seeks to install electricity infrastructure at its operating locations, to permit the use of electric-powered (versus fuel-powered) equipment. For example, in 2015, EOG installed approximately 60 miles of electricity infrastructure in the Eagle Ford region, which allowed EOG to remove approximately 400 diesel and natural gas generators from its operations.

EOG has a quality assurance/quality control program in place to help maintain compliance with state and federal permits and regulations. EOG has also implemented an Emissions Management System for calculating emissions based on recognized methodologies and accepted engineering practices. This system is being utilized to calculate GHG emissions from the company’s operating facilities.

In addition, EOG has taken steps to comply with the New Source Performance Standards and the National Emission Standards for Hazardous Air Pollutants for the crude oil and natural gas sector that were recently implemented by the U.S. Environmental Protection Agency (EPA). These standards are designed to limit emissions of volatile organic compounds (VOCs) and other designated emissions from a variety of sources relating to the completion of natural gas wells and the processing and transportation of natural gas.

Since 2011, EOG has filed reports with the EPA in accordance with the regulatory requirements for facilities with combustion sources greater than 25,000 tons per year (based on emissions data from prior periods). EOG continues to gather data to comply with future reporting requirements. EOG has also gathered GHG emissions data since 2011 for all facilities subject to the EPA’s regulatory requirements, and periodically reports that data to the EPA in accordance with regulatory requirements. This data is available to the general public from the EPA.

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Leak Detection and Repair Program

EOG is finalizing its formal leak detection and repair (LDAR) program, which will provide EOG’s operating divisions with guidelines for detecting, repairing and monitoring emissions leaks at EOG facilities. The program will consist of the following elements:

  • Monitoring of Components – EOG will monitor emissions from components such as connectors, pressure relief valves, controllers and tank thief hatches.
  • Monitoring Frequency Guidelines – These guidelines, with respect to the frequency with which such components will be monitored, will take into account activity levels at EOG facilities and other factors that may affect emissions.
  • Identification and Repair of Leaks – EOG is developing protocols for (i) the identification and repair of detected leaks and (ii) the re-inspection of repaired components at specified time periods post-repair.
  • Infrared Cameras/Thermal Imaging Technology – A substantial part of the monitoring under EOG’s LDAR program will be conducted through the use of infrared cameras and other thermal imaging technology, operated by qualified, trained personnel.
  • Documentation, Review and Retention – EOG’s LDAR program will also contain guidelines with respect to the maintenance of documentation regarding inspections and the detection and repair of leaks.

The LDAR program, once finalized and implemented, will be reviewed periodically by EOG management and will be applicable to all EOG production locations that are not subject to a state or federally mandated LDAR program. EOG expects to finalize and begin implementation of the LDAR program by the end of 2016.

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Carbon Disclosure Project Climate Change Program

Consistent with its commitment to transparency, EOG participated in the Carbon Disclosure Project’s climate change program for 2014, 2015 and 2016, and expects to participate in this program in future years as well. EOG’s participation in this program allows investors and the public to better understand the climate change-related aspects of EOG’s business. EOG’s participation in this program also allows EOG to benchmark its business and operations against that of its peer companies.

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Energy Efficiency and Conservation Measures

EOG frequently reviews energy use and efficiency and takes appropriate actions to reduce consumption and improve the energy efficiency of its field operations and, in turn, reduce the emissions from its field operations. Accordingly, EOG has installed in certain of its operating areas dual-fuel compressors, compressors with speed controls and air fuel controllers, resulting in lower fuel usage and lower emissions. Additionally, in support of recent regulatory initiatives, EOG utilizes electric-driven pumps and compressors in certain of its operating areas to lessen the emissions generated in those areas. Moreover, in addition to reducing overall emissions from its field operations, EOG’s use of multi-well pads and pipeline gathering systems also conserves fuel by reducing trucking during drilling, completion and transportation operations. In addition, EOG’s ongoing efforts to reduce the number of days required to drill wells not only lowers costs for EOG and its stockholders, but also lowers fuel consumption.

EOG’s focus on energy efficiency and conservation also extends to its office buildings. For example, the office building housing EOG’s Houston, Texas headquarters utilizes LED light fixtures; a variable frequency water pumping system that aids in lowering water consumption; and an energy management system that controls and monitors heating and air conditioning usage in the building. In addition, EOG’s office buildings in Houston, Denver and San Antonio have received Leadership in Energy and Environmental Design (LEED) certification. LEED is a “green” building certification program that recognizes best-in-class building strategies and practices.

EOG’s Houston, Texas headquarters office building is also ENERGY STAR-certified. ENERGY STAR is a voluntary EPA program that assists businesses and individuals in saving money on energy costs and protecting our climate through superior energy efficiency.

Energy efficiency and conservation were also key considerations in EOG’s construction of its office building for its Midland, Texas division office. In constructing the building, EOG utilized composite metal panels and sheetrock containing recycled materials; energy-efficient glass and precast concrete; ceiling tiles and carpet containing renewable materials and low VOCs; and paint containing no VOCs.

EOG’s various offices also participate in the recycling programs offered by building management.

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Quantitative Indicators Regarding Emissions

GHG intensity, which is a standard emissions measurement in a variety of industries, is the level of GHG emissions per unit of economic activity. GHG intensity is typically based on gross domestic product (GDP) when measured at a national (i.e., country) level or on aggregate output or production when measured at an industry or individual company level. GHG intensity and other emissions intensity rates are used (for example, by regulatory bodies such as the EPA) to compare the environmental impact of different fuels or activities and to determine progress in achieving emissions reduction targets.

EOG’s GHG intensity rate, as reported in accordance with the EPA’s reporting rules, was as set forth below:

  2012 2013 2014 2015
GHG intensity rate

(approximate number of metric tons of CO2e (carbon dioxide
equivalent) per MBoe produced from EOG’s U.S. operations during such year)
31 37 36 28

EOG also calculates a fugitive emissions intensity rate based on the methane-related fugitive emissions associated with its operated wells, as reported in accordance with the EPA’s GHG reporting rules, relative to EOG’s overall U.S. production of oil and gas for such year. EOG’s fugitive emissions intensity rate was as set forth below:

  2012 2013 2014 2015
Fugitive emissions intensity rate

(number of metric tons of CO2e per MBoe produced from EOG’s U.S. operations during such year)
2.42 1.65 1.32 1.50

In addition to its fugitive emissions intensity rate, EOG also now calculates a methane emissions intensity rate. This intensity rate is based on the methane–specific fugitive emissions associated with EOG’s operated wells, as reported in accordance with the EPA’s GHG reporting rules, relative to EOG’s overall U.S. production of oil and gas for such year. EOG’s methane emissions intensity rate for 2015 was 0.55 metric tons of methane per MBoe produced from EOG’s U.S. operations during 2015.

In addition, EOG calculates a flaring intensity rate based on the flaring emissions associated with its operated wells, as reported in accordance with the EPA’s GHG reporting rules, relative to EOG’s overall U.S. production of oil and gas for such year. Flaring, which is the controlled burning of natural gas, is used to safely combust natural gas during normal operating conditions and during unexpected events in the interest of safety. When crude oil is extracted and produced from wells, natural gas associated with the crude oil is produced as well. The release of natural gas, via flaring, reduces wear and damage to equipment resulting from overpressure, especially during shutdown and restart of operations. Flaring may also be utilized when adequate gathering and processing infrastructure (for example, pipelines) are initially not available to capture such natural gas production and transport it to market.

EOG’s flaring intensity rate was as set forth below:

  2012 2013 2014 2015
Flaring intensity rate

(number of metric tons of CO2e per MBoe produced from EOG’s U.S. operations during such year)
4.6 3.9 6.9 1.7

It is important to EOG, for environmental and economic reasons, to reduce both its flaring and venting of natural gas and the associated emissions, by capturing natural gas at the wellsite. Accordingly, EOG installs (among other emissions reduction equipment) natural gas gathering pipelines and reduced emissions completion systems (i.e., “green completion” systems), such as closed-loop venting systems and portable (e.g., truck or trailer-mounted) recovery and processing equipment, to separate and recover associated natural gas at the wellhead, so it can be directed to a pipeline and sold.

EOG has installed the following number of aggregate miles of natural gas gathering pipelines in its major U.S. operating divisions:

  2012 2013 2014 2015
Miles of natural gas gathering pipelines installed
489.59 222.58 378.53 165.02

In addition, EOG conducted reduced emissions completions (as defined by applicable EPA regulations for natural gas well completions) (i.e., “green completions”) for 100 percent of its U.S. natural gas well completions in 2013 and 2015. EOG did not complete any natural gas wells in the U.S. during 2014.

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