At Halliburton, we work to reduce emissions, improve efficiency, and advance clean energy development. We recognize that affordable, secure energy is key to global economic development, and that our industry has an important role to play in lowering emissions. For more information, please refer to our Climate Change Statement on the Halliburton website.
Chapters:
Climate Change and Low-Impact Solutions
Achieve a 40% reduction of Scope 1 and 2 emissions by 2035 from our 2018 baseline.
Partner with Tier 1 suppliers to track and reduce Scope 3 GHG emissions.
Halliburton has committed to reduce Scope 1 and 2 emissions by 40% by 2035 from our 2018 baseline. In 2022, we executed on priorities set to help the Company progress toward our 2035 emissions reduction target.
Our absolute Scope 1 and 2 emissions trended upward from 2020 to 2021, driven by the post-pandemic global activity recovery of our business. In 2022, we saw the benefits of our emissions-reduction strategy start to play out as our total emissions decreased slightly despite an 16% increase in wellsite operating hours across our operations and increased job intensity in our North America frac business. Overall, we have reduced absolute Scope 1 and 2 emissions by 12% compared to our 2018 baseline of 4.2 million MTCO2e. We continued to invest in electric frac units that have the ability to reduce the overall emissions intensity of our fleet year on year.
Since the rollout of new electric frac fleets occurs gradually over the course of the year, we expect to see the full benefit of each unit deployed after 12 months of operations as opposed to the calendar year when the fleets come into service.
To help meet our goals, we prioritize actions that reduce emissions from our largest emitting activities: hydraulic fracturing and real estate facilities.
We direct a portion of our capital expenditures to purchase electric fracturing equipment to meet customer demand, lower their operating costs, and improve efficiency, which also supports our emissions commitments. Electric units (e-frac) can be powered with electricity generated from a variety of sources, including reciprocating engines and grid power, which increases our opportunities to reduce emissions.
We engage in ongoing efforts to manage our real estate emissions footprint wherever possible. We also purchased renewable energy, installed energy-efficient building technologies, such as LED lighting, and installed solar panels in accordance with power-purchasing agreements.
As part of our commitment to reduce carbon emissions, we continue to integrate sustainability in our real estate work and decision-making processes. The Company assesses new real estate technologies and updates facilities to ensure we meet sustainability targets and comply with regulations. When we conduct building maintenance, we evaluate the technologies for major structural elements like heating, air conditioning, and ventilation; insulation; and windows to identify areas where technology updates might improve energy efficiency.
In 2022, Halliburton initiated new solar power projects, one in Singapore and one in Neiva, Colombia, that collectively added 1,025 kilowatt peak (kWp) of total solar power. These projects are part of our ongoing rooftop solar initiative, which now includes six major projects in Singapore, Malaysia, India, California, and Colombia. The Company is also evaluating the possibility of implementing similar solar initiatives in Mexico, Ecuador, and Brazil.
In 2022, North America saw the completion of LED lighting installations at 13 large Halliburton facilities. This reduces lighting-related carbon emissions in those facilities by 63% per year. In addition, we announced a plan to pursue 24 energy-efficient lighting projects in North America and one in Norway that are expected to have similar results. We also completed lighting evaluations at 18 additional Halliburton sites in North America for future projects.
Halliburton follows the guidance from the Task Force on Climate-Related Financial Disclosures (TCFD) to perform qualitative climate-scenario analysis. As such, the impacts are categorized as Transition Risks (Policy, Reputation, Market, and Technology) and Physical Risks (Acute and Chronic).
Priority risks assessed include the following:
Across Transition Risks, we look at the short-term (0-2 years) and medium-term (2-10 years) to determine potential financial impact to our business and prioritize strategy and capital decisions accordingly. This has reinforced our goals of collaborating with customers to help them achieve their decarbonization targets, continued investment in electric fracturing to reduce emissions in our core business, and continued work with start-ups through Halliburton Labs to uncover gaps in the broader energy value chains.
We consider Physical Risks in the short-term (baseline), medium-term (2040) and long-term (2050) to identify which of our facilities and operations may be exposed, if any, and determine concrete mitigation plans. Out of all the sites analyzed, weather-related potential risk areas include Texas and Louisiana sites at risk of events, such as hurricanes and flooding. Water stress and drought related potential risk areas include multiple desert sites in the United States and Middle East, and possible extreme heat and rainfall projection risks at our Singapore manufacturing sites.
Over the years our locations have experienced weather events such as hurricanes, tornadoes, hailstorms, flooding, and winter snow/ice storms. Weather impacts typically result in temporary delays with no long-term sustained impact. We closely monitor each acute weather event and weather trends to assess our response plans and reduce the possible business impact of these physical risks. Our diverse manufacturing base and supply chain also minimize the risk of local impacts.
In addition to local emergency response planning, we provide training and equipment to our workers in locations with possible extreme heat or cold exposure. In 2021 we used the Aqueduct Water Risk Atlas, published by the World Resources Institute, to assess our locations in water-stressed geographic areas. Working with our top potentially water-stressed sites in 2022, we established a toolkit to allow each facility to identify and implement location-appropriate water preservation actions.
In addition to outlining risks, our scenario analysis uncovered potential business opportunities in spaces such as carbon capture and storage, geothermal, and methane emissions management. Our approach to these different opportunities is outlined in Chapter E2 Sustainable and Secure Energy Future of this document.
We will continue to annually monitor IEA and IPCC scenario analyses and will adjust our risk-mitigation plans according to material changes.
Sustainability means serving our customers, employees, stakeholders, and communities in an environmentally, socially, and ethically responsible way.
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