ConocoPhillips Oil Sands 2011
|Filer||California State Teachers' Retirement System|
|Sector||Oil and Gas|
|Subject(s)||Climate Change; Oil Sands|
|Resolved Clause Summary||Oil sands risk report|
|Supporting Memo||Download PDF|
ConocoPhillips has extensive interests in oil sands operations (11% of proved reserves as of 12/31/09) in the Canadian boreal forest region. Our company is the operating partner of the Surmont oil sands venture and is a partner in the FCCL Oil Sands Partnership, in addition to having interests in other properties.
Oil sands extraction requires heavy water use, land disturbance, toxic waste storage, and emission of air pollutants. These environmental impacts, along with their implications for local populations and wildlife, can introduce legal, regulatory and reputational problems to oil sands companies.
Industrial logging and oil sands have reduced the boreal to less than 40% of its original size; the remaining forest is fragmented, with impacts on many species. According to the Canadian Parks and Wildness Association, it will take over 300 years before reclaimed areas become functioning forest again.
The persistence of tailing ponds, which can leak toxic pollutants into groundwater, may present risks along with significant reclamation costs not currently carried on our balance sheet.
Oil sands have made Alberta the largest emitter of industrial pollutants in Canada.
Shareholders believe ConocoPhillips has not adequately reported on how possible risks associated with oil sands projects may impact our company’s long term financial performance, given our company’s significant investments in this area. Compliance with local, regional and national regulations may not be enough to protect our company from adverse consequences.
Shareholders request that the Board prepare a report discussing possible long term risks to the company’s finances and operations posed by the environmental and societal challenges associated with the oil sands. The report should be prepared at reasonable cost, omit proprietary and legal strategy information, address risks other than those associated with or attributable to climate change, and be available to investors by August 2011.