Sustainable Energy Priorities
As a major step in reinforcing our sustainability goals and addressing our short-term climate change risks and opportunities, Halliburton announced in November 2020 our commitment to set science-based targets to reduce greenhouse gas (GHG) emissions. The Company submitted our commitment letter to the Science Based Targets initiative (SBTi), a collaboration between CDP (formerly the Carbon Disclosure Project), the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature. In 2021 Halliburton will submit our science based target for a 40% reduction by 2035 from our 2018 baseline, with pending SBTi validation by 2022.
Our Climate Change Sustainability Commitments:
- 40 percent scope 1 & 2 reduction by 2035 from 2018 baseline.
- Partner with Tier 1 suppliers to track and reduce Scope 3 GHG emissions.
Halliburton joined over 1,000 global companies who have committed to set emissions reduction targets grounded in what the latest climate science outlines as necessary to meet the goals of the Paris Agreement on climate change, which seeks to limit global warming to well below 2 degrees Celsius above pre-industrial levels.
In addition to reducing our own emissions, we are also committed to helping our customers reduce their carbon emissions footprints. This starts with incorporating the evaluation of carbon reduction potential during Halliburton internal research and development (R&D), and in our product and service package development processes.
In 2020, we focused on identifying the emissions footprint of our products and services in the field, and on enabling easy disclosure of that information to our customers through our Sustainability Labels initiative. Our product service lines (PSLs) are now in a position to better evaluate emissions and other sustainability-related metrics associated with their products and service package offerings, and to work with customers to identify potential reduction opportunities.
Because of the events of 2020, we reimagined how and where we work, and that assessment led to fundamental and major changes in the space we require to operate. As a result, we reduced our global real estate footprint by 22 percent. By doing so, we saw an immediate positive change in our own energy use, and reduced our climate change exposure today and in the future. Reducing our real estate footprint is one of the surest ways to reduce emissions, and our 22 percent reduction is now complete.
Our longer-term priorities include achieving emission reductions in line with our science-based approach, and being involved in the development of effective public policies and regulations that are rational and market-based, and that efficiently address climate change priorities. We include climate strategy in our internal R&D and product development activities, and work with our trade associations to further the development of sustainable solutions for the oil and gas industry.
We work with suppliers to reduce environmental impacts throughout our value chain by leveraging our relationships with them. We educate employees on climate change issues and what actions they can take to reduce GHG emissions at and away from work. More information is available in our Climate Change Statement on our website.
Climate-Related Risks and Opportunities
Key climate-related risks and opportunities for Halliburton can be categorized into four major areas: (1) physical, (2) regulatory, (3) business, and (4) environmental.
The elements within each area are identified through our internal risk management processes, our work with our customers, feedback from and discussions with investors and other stakeholders, and our work within trade associations. This includes the American Petroleum Institute (API), IPIECA (originally the International Petroleum Industry Environmental Conservation Association), and the Petroleum Equipment & Services Association (PESA).
In addition, we have initiated a “2-degree scenario” analysis, supported by a third-party consultant, to build upon the key risks and opportunities for Halliburton posed by climate change. The findings will be incorporated into our ERM strategy and disclosed in our 2021 Annual and Sustainability Report. We do not expect that the climate-related risks and opportunities we currently recognize will change significantly following the scenario analysis.
1. Physical: Halliburton regularly assesses climate-related risks to our worksites and operations. These risks include weather-related impacts; flooding potential; water availability and quality; and the effects of heat stress and cold stress on people, facilities and equipment. We incorporate these risk assessments in our ERM strategies, in our facility and operational planning processes, and in our crisis management plans. This year, we reevaluated our exposure to water stress as part of our planned schedule and to capture any changes that could affect our facility portfolio. As described on the prior page, reducing our global real estate footprint by 22 percent in 2020 reduced both our climate change impact and exposure.
2. Regulatory: Our Legal and Government Affairs teams monitor changes in public policy and regulatory requirements, and communicate this information to senior leadership and the Halliburton Board of Directors for incorporation into our ERM program. These changes are also communicated to the affected parts of the organization, so they can adjust their business strategies and operational plans. Among the regulatory issues that we monitor are carbon caps, emissions reporting requirements, carbon taxation, bans or moratoriums on certain activities (such as local regulations that constrain or ban hydraulic fracturing), and the requirement to disclose non-financial information that is either separate from or within financial disclosures.
To reduce our exposure to carbon taxation, we focus on minimizing or eliminating GHG emissions from our facilities and our fleet. With respect to potential impacts from regulatory bans on hydraulic fracturing activities, we are involved in addressing government and community concerns through our seat on government-industry panels at the local and national levels. In addition, we work with our customers to provide equipment and solutions that have less impact on local communities – for example, electric-fracturing (known as e-frac) fleets that eliminate direct carbon emissions and produce less noise, odors and fumes.
3. Business: Our most important contribution to the energy transition is to continue helping our customers satisfy the world’s need for affordable and reliable energy while innovating to help reduce emissions, improve energy efficiency and advance clean energy development. The key risks and opportunities to our business from climate change involve the transition to a low-carbon-energy future. We are using innovative technologies to help customers meet emissions targets and improve environmental impact. This includes lowering the emissions profile of our own portfolio of services and equipment. Halliburton is also using our expertise and capabilities to help customers involved in the development of renewable and alternative energy sources such as geothermal, wind and carbon capture, utilization and storage (CCUS). We also established Halliburton Labs in 2020 to help accelerate the development of new clean energy technologies.
4. Environmental: Halliburton monitors the overall environmental risks to our organization and to the communities in which we live and work, and identifies opportunities to do our part to reduce energy usage, emissions and produced waste, as well as to improve water conservation. Our Real Estate Services group is responsible for implementing the use of renewable energy sources at our locations around the world through the placement of solar panels, and for identifying where we can increase the use of renewably sourced electricity. We are also reducing our electricity usage through efficiencies in lighting and heating, and through the consolidation of smaller locations into larger hubs that are designed to be energy efficient. The use of an in-vehicle monitoring system (IVMS) allows us to manage journeys more efficiently and to reduce emissions from our general fleet. We are the leaders in the design and use of low-emission Tier 4 engines, and are building on our focus of reducing emissions through the launch of our Tier 4-compliant dual-fuel engines in the near future and the expansion of our electric-fracturing (e-frac) fleet.
We constantly study our logistics operations in order to establish more efficient and sustainable means of moving equipment and materials from site to site, and our digital solutions allow us to work remotely, significantly reducing the logistics associated with personnel and equipment.
Ongoing initiatives to reduce energy use and emissions, and to conserve water in our operations, as detailed in our sustainability commitments, provide opportunities to mitigate the physical risks to our worksites.
Our digital framework, Halliburton 4.0, is a part of everything we do and is transforming the way we work to make a quantum leap in productivity. Halliburton 4.0 uses open architecture to drive connectivity for collaboration with customers and partners, helping us to pioneer new approaches to subsurface understanding, well construction, and reservoir production. Our industry-leading SmartFleet™ intelligent fracturing system marries our digital capabilities and fracturing expertise to give customers control over frac performance in real time. SmartFleet and other Halliburton 4.0 digital offerings will continue to improve the efficiency of our service delivery and to lower well construction costs and risks.
Our Landmark PSL is an established leader in petrotechnical software, with its powerful, cloud-enabled DecisionSpace® 365 software platform. Landmark provides Halliburton with a solid foundation to create and scale digital solutions, established through decades of investment in software development, expertise and processes. This foundation benefits all of our PSLs, as customers continue to adopt our digital solution, including increased sales of Landmark software, and to use our automated solutions to improve efficiency in fracturing and other integrated operations.
Reductions in GHG Emissions and Energy Use
Halliburton is committed to mitigating the environmental impacts of our operations through increased efficiency and investments in R&D to reduce energy use and emissions from the equipment we design, manufacture and use.
Our Technology Matrix in the next chapter provides examples of our sustainable technology offerings. Working directly with engine manufacturers and investing in related R&D has enabled Halliburton to become a leader in the deployment of diesel engines that meet the U.S. Environmental Protection Agency’s Tier 4 standard. Today, Halliburton surface equipment is among the lowest emissions available, and has the largest fleet of Tier 4-compliant diesel engines currently in operation in the U.S. and the Gulf of Mexico.
|Percentage of Tier 4 Diesel Engine Penetration||2018||2019||2020|
|Hydraulic fracturing engines that meet Tier 4 compliance for non-road diesel engine emissions||39%||47%||48%|
|Hydraulic fracturing pumping equipment (HHP) that meet Tier 4 compliance for non-road diesel engine emissions||40%||52%||56%|
Our new Tier 4 dual-fuel pumping units enable operators to use field gas that they may have otherwise flared as the fuel source for our equipment, instead of using diesel fuel. Use of flare gas paired with Tier 4-compliant engines results in improved emissions profiles for both Halliburton and the operator. When it comes to the use of electric equipment, we continue to innovate and now have the ability to offer everything electric on a location – from the pumps down to the wireline equipment, such as our remotely operated eWinch™ system. In 2020, we successfully deployed the industry’s first grid-powered electric project where we powered the pumps directly from the grid, resulting in the lowest emissions profile possible for a fracturing site.
We are also focused on reducing energy use in our facilities. Our reported data on energy use (electricity and natural gas) at Company-owned or leased business operations covers 100 percent of our U.S. facilities, as well as other major international facilities. In 2020, Halliburton reduced our global real estate footprint by 22 percent.
In 2020, Halliburton continued to implement solar projects at our global facilities with the highest solar power potential in order to reduce our electricity use and energy costs. We installed solar power at our facility in Bakersfield, California, which is expected to offset approximately 80 percent of the site’s current electricity usage and to avoid emissions of nearly 590 metric tons of CO2e per year. This project, combined with our solar installations in Taloja, India, and two others in Singapore, have enabled us to avoid carbon emissions of over 3,700 metric tons per year. A similar solar project began in November 2020 at the manufacturing facility in Johor, Malaysia, and it will be commissioned in mid-2021.
We are also reducing electricity usage through the use of Lighting-as-a-Service agreements, where Halliburton partners with a company that performs complete LED lighting retrofits with passive controls at their expense, and then owns and operates the lighting over an agreed-upon service period. We have entered into pilot agreements in Duncan, Oklahoma, and expect to expand the program worldwide. At ideally qualified sites, the benefit for Halliburton includes an immediately positive cash flow and reduced energy consumption. This is achieved through lower monthly utility bills, energy efficiency improvement rebates where available, and service agreements that offset direct maintenance costs.
Halliburton also utilizes building automation systems at our larger facilities to control HVAC and some other building systems to minimize energy use. We are planning a pilot project at our Houston North Belt campus to utilize artificial intelligence tools to capture a comprehensive amount of data for optimizing the use of building automation systems.