California Resources Corporation
2019 SUSTAINABILITY REPORT
Table of Contents
OVERVIEW
Letter From CEO
CRC at a Glance
Our Response to COVID-19
Our Sustainability Reporting Approach Identifying and Engaging with Our Stakeholders
CALIFORNIA
CRC's Place in California
California's Oil and Natural Gas Imports
California's Leadership in ESG Policies
CRC SUSTAINABILITY LEADERSHIP
Team Members & Management Approach
Risk Management
2030 Sustainability Goals
Carbon Capture and Sequestration (CCS)
Methane Capture
Water Recyling
Renewables Integration
ENVIRONMENT
Our Ongoing Environmental Efforts in California
Biodiversity
Water Conservation
Preventing Releases
Minimizing Waste
Air Emissions
Methane
Greenhouse Gas (GHG)
CRC Funding of State GHG Reduction Investments
Renewable Energy
Well Operations
Well Simulation
Public Disclosure
Plugging and Abandonment
CRC Energy Leadership
1-2
3-6
7
8
8-9
11
12-13
14-15
17-18
19
20-24
26
27
28-30
31
32
32-33
34
35
36
37
38-40
41
SOCIAL | |
Our Role in Society | 43 |
Investing in Our Workforce | 44-47 |
Transparent Supply Chain | 48-49 |
Prioritizing Community | 50 |
Strengthening Diverse Communities | |
Empowering California Community Stakeholders | |
Our Commitment to Our Neighbors | |
Powering California | |
Awards and Recognitions | 59 |
GOVERNANCE | |
Our Board of Directors | 61-62 |
Sustainability Commitee | 63 |
ESG Alignment with Compensation | 64-65 |
Regulatory Compliance | 66 |
CLOSING REMARKS | |
About This Report | 68 |
Assurances | |
ADDITIONAL RESOURCES | |
Performance Data Tables | 69-71 |
SASB Index | 72-73 |
GRI Index | 74-78 |
Risk Management Process | 79-81 |
Definitions and Forward Looking Statements | 82 |
Contacts | 83 |
OVERVIEW | Letter From CEO |
Letter From CEO
Access to safe, affordable and reliable energy propelled California to its position as the world's fifth-largest economy, and remains even more essential today to solve mounting societal challenges, improve our environment, mitigate climate change and alleviate poverty and inequality. Our values of Character, Responsibility and Commitment unite California Resources Corporation (CRC) and our workforce with responsible state leaders and the communities where we live and operate to foster a more inclusive and equitable society. Since our founding in 2014, CRC has consistently set a high standard for environmental stewardship, safe, responsible operations and community empowerment across California. We have directly aligned our 2030 Sustainability Goals with the State of California, which is a signatory to the Paris Climate Accord. As the State's largest oil and natural gas producer, we are proud that during 2019 CRC successfully continued on our path to provide a cleaner and more sustainable, resilient and affordable energy mix to California's diverse communities, and mitigate the Golden State's increased dependence on oil, natural gas and electricity imports from other states and foreign countries that do not adhere to California's world-leading safety, labor, human rights and environmental standards. At CRC, we strongly believe that serving as a responsible steward of California's vast natural resources amplifies our positive and long-lasting impact on the economic development of our state and the well-being of our stakeholders and all Californians.
Transparent measurement of and reporting on our performance is central to our Health, Safety and Environmental (HSE) Principles, 2030 Sustainability Goals, compliance with California's leading standards, and our ongoing stakeholder engagement, as well as to our fundamental pursuit of operational excellence. We have enhanced this third annual sustainability report with more information aligned with initiatives of the Sustainability Accounting Standards Board and the Global Reporting Initiative. This added transparency
highlights the commitment of CRC and our Board of Directors to continue to measure and actively manage the potential risks in our business, as well as our opportunities to create value as we strengthen our communities and improve our environment. The Board has also aligned compensation
of officers and all employees with our performance on annual sustainability metrics that including specific targets for health and safety, spill prevention, net water supply to agriculture and completion of annual sustainability project milestones that advance our four 2030 Goals. Specific to this report, CRC's Sustainability Committee of our Board of Directors meets regularly to discuss our performance and progress on our goals and in turn reports to the full Board on our sustainability, HSE and community outreach programs. I am very proud of the strong contributions of CRC and our workforce to California and our local communities in 2019, including multiple company records. At CRC, everything we do starts with health and safety, and our employees had zero workplace injuries or illnesses during 2019.
Our combined workforce, including both employees and contractors, achieved a recordable incident rate of 0.34 in 2019, the best ever rate in the long history of our operations. Our statewide Project Labor Agreement with the California State Building and Construction Trades Council - the first in California's oil and gas industry - provides us with a highly skilled local workforce who builds and maintains our integrated infrastructure with a consistent focus on safety and quality. In late January 2020, facing early reports of the COVID-19 pandemic, we formed an incident management team to implement specific health and safety protocols and acquire necessary personal protective equipment
for our workforce ahead of state and local public health orders. In March 2020, public health officers designated oil and gas extraction and production and power generation as essential infrastructure. Our dedicated employees and contractors have continued to safely operate and maintain our wells and facilities that are so vital to our fellow Californians throughout the pandemic.
OVERVIEW | Letter From CEO |
CRC's workforce reflects the communities where we live and operate, through our recruiting, internships and STEM initiatives, as well as local hiring and apprenticeships under our Project Labor Agreement. Our company and our industry provide good-paying career opportunities with benefits, including for those without a college degree.
In 2019, we continued to diversify our workforce and expanded leadership development opportunities, both internally through our CRC Women's Interest Network (WIN) and in conjunction with our non-profit partners. Further, CRC's workforce once again demonstrated our deep commitment to address community needs, serving nearly 4,300 volunteer hours, plus CRC's direct support of more than 250 charitable and community sponsorships. This outreach focused, as always, on our five community pillars: education and job training; public health and safety; military and veterans; environmental stewardship and water conservation; and civic empowerment that celebrates California's diversity.
At CRC, we recognize that climate change needs to be addressed through thoughtful and responsible government and private sector policies and market-based technological solutions that must benefit working Californians and all parts of our society. Our sustainability strategy focuses on our four 2030 Sustainability Goals for Carbon, Methane, Water and Renewables that our Board of Directors adopted in 2017
to align with the state of California's climate goals. These 2030 Goals demonstrate our long-term commitment to sustainable in-state energy production that meets the needs of California's growing population and California's leading standards. We utilize our disciplined capital allocation process and our life-of-field planning to incorporate the 2030 Goals as well as California's cost of carbon under the state's AB-32Cap-and-Trade program.
In 2019, we continued implementing the pioneering CalCapture Carbon Capture and Sequestration (CCS) project at Elk Hills to advance both our 2030 Carbon Goal and the state's 2045 goal of carbon neutrality. Even as we progress our CCS project, CRC has successfully reduced our Scope
1 greenhouse gas (GHG) emissions by 19% since 2015. In 2018, we surpassed our 2030 Methane Capture Goal of a 50% reduction in methane emissions, and extended these reductions in 2019 to nearly 63% since 2013. In 2019, we continued our role as a net water supplier to agriculture, delivering a record 5.35 billion gallons of reclaimed water for irrigation and recharge to supplement existing water supplies and sustain productive farmland in Kern County. We also increased our recycled and reclaimed water volume by almost 15% since 2013, nearly halfway to our 2030 target. CRC has signed power purchase agreements for 40 MW of solar power at multiple fields and an additional 2 MW of carport solar is in development to surpass our 2030 Renewables Goal. The foregoing sustainability projects demonstrate CRC's commitment to design and implement technological solutions to improve our operations, further reduce emissions, and help the state mitigate climate change while sustainably meeting the energy needs of California's growing population.
We are proud of our sustainability record and our 2019 performance that reflected continued progress toward our 2030 Sustainability Goals and California's parallel goals. We look forward to providing updates to you as we continue to strive to improve. We believe that our sustainability strategy should serve CRC and our communities well as we continue to provide safe, reliable and affordable energy for California by Californians for many years to come.
Todd Stevens
President and Chief Executive Officer
California Resources Corporation
October 2020
OVERVIEW CRC AT A GLANCE
CRC at a Glance
California Resources Corporation (CRC) was established in late 2014 as
- spin-offfrom Occidental Petroleum Corporation and has been operating independently since then. Today, CRC is the largest oil and natural gas exploration and production company operating properties exclusively within the state. In 2019, CRC averaged gross production of 144 thousand barrels of oil equivalent per day (MBoe/d). CRC has the largest privately held mineral acreage position in the state,
consisting of approximately 2.2 million net mineral acres spanning four of California's major oil and natural gas basins. The company's proved reserves totaled an estimated 644 million barrels of oil equivalent (MMBoe) as of December 31, 2019.1 Using advanced technology, CRC focuses on safely and responsibly supplying affordable energy for California by Californians.
CRC has a diversified portfolio of oil and natural gas locations and extensive drilling inventory that are economically viable
in a variety of operating and commodity-price conditions, including many that are high-value projects throughout the commodity- price cycle. Our acreage position contains numerous development and growth opportunities due to its varied geologic characteristics and thousands of feet of multiple stacked- pay reservoirs in many locations.
Our returns are enhanced relative to our peers because we do not owe any significant royalty or other lease payments on over 60% of our mineral acreage which is held by us in fee.
Sacramento Basin
6 MBoe per day
San Joaquin Basin
98 MBoe per day
Ventura Basin
6 MBoe per day
Los Angeles Basin
34 MBoe per day
Note: 2019 Gross Production
1 For the December 31, 2019 SEC pricing estimated proved reserves attributable to the underlying properties, the average benchmark Brent oil price was $63.15 per barrel and the average NYMEX gas price was $2.58 per MMBtu. The average realized prices used for such December 31, 2019 reserves were $63.50 per barrel for oil, $30.91 per barrel for NGLs and $2.88 per Mcf for natural gas.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 3 |
OVERVIEW CRC AT A GLANCE
In 2019
11,798 Gross Productive Wells | 130 Fields | Gross Production of 144 MBoe/d
75% | 1,251 |
Liquids | Employees |
Our large portfolio of low-risk and low-decline conventional opportunities comprised approximately 73% of our proved reserves across the four oil and natural gas basins in which we operated at year-end 2019. We are in various phases of developing many of our conventional assets, which we expect to continue to develop by using internally generated cash flow and capital raised through joint ventures.
The members of our operational management and technical teams have an average of over 26 years of experience in the oil and natural gas industry, with an average of over 17 years focused on our California oil and natural gas operations through different price cycles. Our teams have a proven track record of safely and responsibly applying modern technologies and operating methods to develop our assets and improve their operating efficiencies.
Upstream GHG Emissions of 22.2 Tonnes CO2e/MBoe - 14.3% reduction since 2017
Net Electricity Supplier to Californians
Record Workforce Total Recordable Incident Rate (TRIR) of 0.34 - better
than most office-based sectors
Oil Spill Prevention Rate
99.9997%
TOTAL GHG EMISSIONS FROM UPSTREAM AND | ||||||||
Midstream 2 | MIDSTREAM OPERATIONS | TOTAL METHANE EMISSIONS | ||||||
3.5 | 3.2 | |||||||
8,196 | ||||||||
4.0 | ||||||||
e) | 3.6 | 3.5 | 9,000 | |||||
CO | 8,000 | |||||||
and | 3.0 | |||||||
Tonnes | Emissions Tonnes) | 7,000 | ||||||
Upstream Metric | 2.0 | 5,000 | ||||||
2.5 | 6,000 | 5,447 | 5,041 | |||||
Emission | (Metric | |||||||
from | 1.5 | Methane | 4,000 | |||||
GHG Operations | 3,000 | |||||||
(Million | 1.0 | |||||||
2,000 | ||||||||
0.5 | 1,000 | |||||||
Total | 0.0 | 0 | 2017 | 2018 | 2019 | |||
2017 | 2018 | 2019 | ||||||
CALIFORNIA RESOURCES CORPORATION | | 2019 SUSTAINABILITY REPORT | 4 |
As a company dedicated to fostering sustainable growth to meet the future energy needs of Californians, CRC proudly shares and endorses the state's commitment to conserve our natural resources, protect our environment and mitigate climate change. We are committed to managing our assets in a manner that safeguards people and protects the environment, and we engage proactively with regulatory agencies, communities and other stakeholders to pursue mutually beneficial outcomes. We benefit the communities where we live and work through capital investments and employee volunteerism, job creation and payment of taxes and royalties, and by actively promoting conservation of water, habitat and energy. We operate in coastal, urban and agricultural settings by applying advanced production technologies and control systems, as well as innovative environmental
safeguards and conservation measures. We design and maintain our facilities throughout the state with our neighbors, communities and the environment in mind. As a leading California energy producer, CRC is committed to reducing the effects of climate change through measures such as maintaining compliance with California's world-leadingCap-and-Trade program and addressing potential climate-related risks and opportunities to mitigate climate change. This report details our strategic objectives and initiatives in environmental stewardship, workforce development, community involvement and corporate governance, and summarizes our sustainability strategy, goals and performance.
OVERVIEW CRC AT A GLANCE
Our Core Values
Character | Responsibility | Commitment |
Acting with integrity and honor, | Achieving California's high | Respecting our neighbors and advancing |
without exception | standards for safety and | community interests for ample, |
environmental protection | affordable and reliable energy |
Our Vision and Mission
To be the premier company providing Californians with long-term ample,
affordable and reliable energy from California's resources.
To maximize stockholder returns by safely and responsibly developing high-growth,high-return conventional and unconventional assets in California while benefiting our communities and the state.
Island White, Long Beach Harbor, THUMS Production Facility
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 6 |
OVERVIEW OUR RESPONSE TO COVID-19
Our Response to COVID-19
CRC's dedicated workforce operates critical infrastructure in | home except for essential activities. The Governor, as well |
the State of California, providing affordable and reliable oil, | as the U.S. Department of Homeland Security and local |
natural gas, natural gas liquids like propane, and electricity | public health officers, designated oil and gas extraction |
that Californians need for our collective public health, safety | and production and power generation as essential |
and welfare. In late January 2020, facing early reports | infrastructure and specifically authorized Californians in the |
of the COVID-19 pandemic, CRC established an incident | oil and natural gas production, power generation and other |
management team of HSE, human resources, supply chain, | critical infrastructure sectors to continue their work during |
facilities and operations professionals to monitor and | the pandemic because of its importance to Californians' |
prepare for the spread of the illness in the United States by | continued health and well-being. Responsible state and |
implementing additional health and safety precautions at | local leaders and our dedicated workforce recognize that |
our worksites and acquiring necessary personal protective | our essential products enable our hospitals, farms, grocery |
equipment and supplies for our workforce. In March 2020, | stores and emergency responders to serve the community, |
California Governor Gavin Newsom announced an Executive | even while so many of our fellow Californians are restricted |
Order which, along with similar city and county orders | to their homes. |
across the state, required most Californians to remain at |
As the public health response to the pandemic evolves, CRC has continued to update our COVID-19 health and safety plan and training to incorporate the latest government orders, health guidance and lessons learned during the pandemic. The steps we have taken to further safeguard our employees, our service providers and our local communities include the following, among others:
Coordinating closely with government agencies and | Enabling employees to work | |
applying public health guidance regarding work | ||
remotely from home, when feasible | ||
locations, limiting travel and cancelling group events | ||
Implementing health and safety protocols for workers at CRC plants, rigs, fields and offices to minimize the risk of illness while they produce the much-needed energy that fuels California's economy and maintains internet connectivity and power:
- Mandatory COVID-19 health and safety training
- Posting of health and safety protocols and local orders or certifications as warranted
- Daily health screening before reporting to work
- Physical distancing requirements for personnel
- Reconfiguration of office space, control rooms, crew transportation and other workspaces to reduce density and expand physical distancing
- Mask and other PPE requirements
- Hygiene, cleaning and disinfection protocols
- Review of HVAC equipment and ventilation
- Notification and contact tracing in the event workers are ill or were potentially exposed to or diagnosed with COVID-19
- Reporting of illnesses in accordance with federal, state and local requirements
- Quarantine or isolation requirements for workers who are ill or were potentially exposed to or diagnosed with COVID-19
- Response protocol in the event of a medical emergency or illness at work
- Voluntary antibody testing
- Free influenza vaccines for employees and family members
Donating PPE to support community health providers in communities where we operate
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 7 |
OVERVIEW OUR SUSTAINABILITY REPORTING APPROACH
Our Sustainability Reporting Approach
In our third sustainability report, we seek to further showcase our recent progress on our sustainability performance and initiatives of our business, our people and our communities where we operate. This report provides a thorough overview of CRC's strategy and implementation of our commitment to safe, sustainable and technologically advanced energy production and integrated infrastructure to meet the needs of all Californians.
This year, we are adhering to the Sustainable Accounting Standards Board (SASB) framework and to the Global Reporting Initiative's (GRI) Sustainability Reporting Standards with respect to our sustainability assessment, performance
and reporting. In today's rapidly changing investment environment, we feel that these frameworks support our goal to engage more efficiently with investors about our ongoing sustainability efforts and other topics that are financially and socially significant to our business. As a company dedicated to supplying energy for California by Californians, CRC proudly shares and endorses California's commitment to conserve our natural resources, protect our unique environment and mitigate climate change. As such, it is our priority to ensure that our ESG data are reliable, comparable and relevant to effective decision-making regarding our capital allocation, financial, operational and
environmental performance and investments in the communities where we operate. All information and performance data in this report are related to CRC operations, unless otherwise stated.
This report was reviewed by CRC's subject-matter experts, HSE and sustainability teams, legal and accounting staff, executives, CEO. Certain financial information was excerpted from the 2019 Annual Report on Form 10-K and Proxy Statement filed with the SEC.
Identifying and Engaging With Our Stakeholders
As part of our engagement, we consider input from our diverse stakeholders, including stockholders, municipalities, regulatory agencies, joint venture partners, landowners, mineral rights owners, customers, suppliers, vendors, our workforce, advocacy groups, the media and labor, business, agricultural and community non-profit organizations. These stakeholders have been identified by senior management and the Board to ensure we communicate with parties involved both directly and indirectly in our operations, including those interested in energy, employment, land use, resiliency, social
equity, climate and environmental issues.
By maintaining regular conversations with stakeholders, such as through our annual meeting and management presentations to stockholders, lenders and analysts and our public outreach through our Powering California Network and our CRC Ambassador program described below, we are better able
to inform stakeholders about our operations, solicit their input and identify how we can work together to reach mutually beneficial outcomes. We have established this open
communication through years of active outreach as well as by providing tools and processes in which stakeholders can reach out to our CRC Ambassadors and to senior management to have a voice.
In recognition of the importance of transparent stakeholder engagement, CRC's annual management objectives include individual goals to maintain a dialogue with diverse stakeholders associated with the manager's areas of responsibiliity.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 8 |
OVERVIEW IDENTIFYING AND ENGAGING WITH OUR STAKEHOLDERS
Board members and our senior management held conversations with a majority of our stockholders in 2019 related to our corporate policies, governance, performance and company goals. In previous outreaches, certain stockholders suggested tying a greater proportion of annual incentive compensation to quantitative measures and providing more detailed disclosure regarding annual incentive compensation. To implement these stockholder recommendations, we took the following actions:
- Further aligned performance awards by changing metrics to include relative total shareholder return
- Reduced the number of metrics under the annual incentive to provide greater focus on key objectives
- Continued to provide more detailed disclosure regarding compensation under the strategic and individual portion of our annual incentive
In addition, CRC's senior management serve in multiple civic and charitable organizations that are not directly related to our business. For example, the Southern California Leadership Council (SCLC) addresses anti-poverty initiatives and community needs including affordable housing, homelessness, food security and healthcare. As a company operating exclusively in California, we are actively involved with organizations such as SCLC and policy issues because if Californians succeed, CRC succeeds.
Our stakeholder outreach is by no means limited to our Board and senior management. CRC launched its Ambassador program in 2019 with over 250 employees who volunteered to participate actively in community outreach, educate decision-makers about the importance of our jobs and our industry, and provide comments on legislation, rulemakings and land use hearings. Participation in the Ambassador program is entirely voluntary and individuals are free to express any opinions respectfully in their outreach and comments.
For several years, CRC has published a monthly digital Powering California newsletter that is circulated to community leaders and non-profit organizations and focuses on California's energy supply and the critical, but often overlooked, role that access to affordable, reliable and resilient energy plays in California's standard of living, economy, employment and environment. During 2019, we launched two coalitions - the Powering California Network (PCN) in the Los Angeles Basin and the Central Valley Energy Coalition (CVEC) - to convene educational events and listening sessions and increase energy literacy among labor and non-profit groups focused primarily on civic and economic empowerment of disadvantaged communities. The PCN held 40 events in 2019 with over 30 organizations representing over 5,000 people and the CVEC held over 50 events with almost 60 members representing over 100,000 people. These events often included roundtable discussions with experts in energy production and public policy and provided tremendous feedback to CRC that helped us direct our community outreach and share educational materials to inform ongoing policy discussions about energy, land use and sustainability.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 9 |
California
CRC's Place in California
California's Oil and Natural Gas Imports
California's Leadership in ESG Policies
CALIFORNIA CRC'S PLACE IN CALIFORNIA
5 | LARGEST | 40M |
thECONOMY IN | PEOPLE | |
THE WORLD | AND GROWING |
California is the second-highest energy consumer in the United States and must ensure an affordable, reliable and secure energy supply. As California's largest oil and natural gas producer, CRC takes pride in providing energy and revenues that are critical to communities and residents throughout our state. We manage the largest privately held mineral acreage position with operations in all four of California's major oil and gas basins, including San Joaquin, Los Angeles, Ventura and Sacramento.
As a California company, our success depends on a vibrant future for California's society, economy and environment.
Despite our state's world-class oil and natural gas resources, California's chronic dependence on out-of-state and foreign energy imports has
recently hit record levels. California consumers are funding jobs and development overseas instead of right here at home. More than 75% of oil dollars flowing out of California to foreign countries goes to Saudi Arabia, Ecuador, Iraq, Colombia and Nigeria. This dependence is not sustainable for our society, our economy or our environment. California can and must reverse this trend.
From 2014 through 2019, CRC paid more than $1.1 billion in California state, local and payroll taxes. CRC also acquired approximately $232 million in mandatory GHG allowances or offsets required since 2013 under the state's Cap-and-Trade program that funds state renewable energy and climate mitigation projects. CRC's operations have provided an additional $874 million in revenues to the California State Lands Commission
CALIFORNIA IS AN ENERGY ISLAND
(Sierra Nevada Mountains on one side and the Pacific Ocean on the other)
NO OIL PIPELINES
SUPPLYING THE STATE FROM THE REST OF THE COUNTRY MEANS
GROWING COSTLY
D E P E N D E N C E
ON ENERGY IMPORTS FROM
FOREIGN NATIONS
from our production on state lands. CRC's operations in Long Beach alone have generated more than $5.1 billion in revenue for the city and state since 2003. Each year, CRC's tax payments and production for government agencies support thousands of public sector jobs for essential services like health, education, regulatory oversight and public safety. Additionally, from 2014 through 2019, CRC has paid more than $1.1 billion to mineral rights owners in California.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 11 |
CALIFORNIA CALIFORNIA'S ENERGY IMPORTS
CALIFORNIA ENERGY IMPORTS
CRUDE
OIL
Over 70% of California's oil and gas needs come from foreign and out-of-state sources and more than 30% of California's electricity needs are imported from other states. As seen in the table below, natural gas still satisfies nearly 35% of California's electricity needs, and is particularly relied upon during peak demand times late in the afternoon, when solar and wind power decline markedly. On particularly hot days,
as demonstrated on the supply/demand charts on the following page, natural gas can account for approximately 60% of electricity supply. Without the oil and gas industry in the State of California, this natural gas would be imported entirely from other states or Canada.
Fuel Type | California In- | Percent of | Northwest | Southwest | California Energy | Percent of |
State Generation | California In- | California Grid | ||||
Imports (GWh) | Imports (GWh) | Mix (GWh) | ||||
(GWh) | State Generation | Mix | ||||
Coal | 294 | 0.15% | 399 | 8,740 | 9,433 | 3.30% |
Large Hydro | 22,096 | 11.34% | 7,418 | 985 | 30,499 | 10.68% |
Natural Gas | 90,691 | 46.54% | 49 | 8,904 | 99,644 | 34.91% |
Nuclear | 18,268 | 9.38% | 0 | 7,573 | 25,841 | 9.05% |
Oil | 35 | 0.02% | 0 | 0 | 35 | 0.01% |
Other (Petroleum | 430 | 0.22% | 0 | 9 | 439 | 0.15% |
Coke/Waste Heat) | ||||||
Renewables | 63,028 | 32.35% | 14,074 | 12,400 | 89,502 | 31.36% |
Biomass | 5,909 | 3.03% | 772 | 26 | 6,707 | 2.35% |
Geothermal | 11,528 | 5.92% | 171 | 1,269 | 12,968 | 4.54% |
Small Hydro | 4,248 | 2.18% | 334 | 1 | 4,583 | 1.61% |
Solar | 27,265 | 13.99% | 174 | 5,094 | 32,533 | 11.40% |
Wind | 14,078 | 7.23% | 12,623 | 6,010 | 32,711 | 11.46% |
Unspecified Sources | N/A | N/A | 17,576 | 12,519 | 30,095 | 10.54% |
of Power | ||||||
Total | 194,842 | 100.00% | 39,517 | 51,130 | 285,488 | 100.00% |
Source: energy.ca.gov
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 12 |
CALIFORNIA CALIFORNIA'S ENERGY IMPORTS
EXAMPLE OF A SUMMER DAY'S ELECTRICITY
DEMAND AND SUPPLY IN CA
ELECTRICITY DEMAND
50,000 | ||||||||||||||||||||||||
45,000 | ||||||||||||||||||||||||
Megawatts(MW) | 40,000 | |||||||||||||||||||||||
35,000 | ||||||||||||||||||||||||
30,000 | ||||||||||||||||||||||||
25,000 | ||||||||||||||||||||||||
20,000 | ||||||||||||||||||||||||
15,000 | ||||||||||||||||||||||||
10,000 | ||||||||||||||||||||||||
5,000 | ||||||||||||||||||||||||
0 | ||||||||||||||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 |
Demand (5 min. avg.)
ELECTRICITY SUPPLY BY SOURCE
Megawatts(MW) | 30,000 | |||||||||||||||||||||||
10,000 | ||||||||||||||||||||||||
25,000 | ||||||||||||||||||||||||
20,000 | ||||||||||||||||||||||||
15,000 | ||||||||||||||||||||||||
5,000 | ||||||||||||||||||||||||
0 | ||||||||||||||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | |
-5,000 | ||||||||||||||||||||||||
Natural gas | Imports | Renewables | Nuclear | |||||||||||||||||||||
Large hydro | Coal | Other | Batteries |
Source: Cal ISO, data from 8/14/20
CALIFORNIA IS AN ENERGY
IMPORTING STATE
By choosing to import more oil, natural gas and electricity, Californians lose the benefits of local production and instead pay to develop jobs, schools, infrastructure and technology in the Middle East and South America or other states. Imported energy also raises global greenhouse gas (GHG) and other air emissions, since production in those countries and states does not follow California's rigorous air quality standards and emission controls, California's Methane Rule or GHG Cap-and-Trade Program. Additionally, imported energy is transported over thousands of miles by powerlines, supertankers, rail or trucks to reach California. Finally, relying on distant producers subjects California's growing population to a serious and unnecessary risk of energy shortages and price spikes due to foreign conflicts, natural disasters and transportation incidents. These risks make California's energy some of the most expensive in the United States, which particularly hurts disadvantaged communities.
OIL SUPPLY SOURCES TO CALIFORNIA REFINERIES
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | 1997 | 1999 | 2001 | 2003 | 2005 | 2007 | 2009 | 2011 | 2013 | 2015 | 2017 | 2019 |
CaliforniaCalifria Oil Supply (mbpd))
California | Imports | |
Source: CalGEM
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 13 |
CALIFORNIA CALIFORNIA'S LEADERSHIP IN ESG POLICIES
Average Electricity Rate for All Sectors
By increasing local production of oil, natural gas and electricity, CRC and other California producers provide a more secure, affordable and reliable energy supply, reduce global emissions, and make our economy and society more resilient and self-sufficient. California's sustainability depends on increasing safe and cost-effective local energy production, which CRC is committed to deliver.
Due to California's world-leading economic, environmental and human rights leadership, the policies invoked in California immediately impact our residents and communities and can also have wide-ranging effects in North America and across the world, specifically around imports of energy. The Environmental, Social and Governance (ESG) performance of these states and countries is assessed by various organizations whose metrics also provide an overall ESG rating for California's crude slate.
The California Air Resources Board, as part of its implementation of the Low Carbon Fuel Standard, tracks and reports annually the sources of
Cents per Kilowatt-hour
29.18
7.71
Source: EIA
California's mix of crude oil grades used by refineries in the state. The data show that California has continued to increase the volume of oil it imports from foreign countries from 52% in 2015 to about 60% in 2019. In fact, despite its abundant natural resources, California is a chronic energy importer from19 different countries around world. Outside a small amount that is imported from Canada, the ESG performance of those source countries does not align with California's human rights and environmental values. The reality is that California's crude purchases are directly funding those regimes around the world.
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CALIFORNIA CALIFORNIA'S LEADERSHIP IN ESG POLICIES
The City of Los Angeles' Oil and Gas Health Report (Council File 17-0447, 07/2019, Page 134) cites a source of measurement for the Human Rights Standards of Oil Exporting Countries:
"The United Nations defines human rights as rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Human rights include the right to life and liberty, freedom from slavery and torture, freedom of opinion and expression, and the right to work and education.
Freedom House is an independent watchdog organization dedicated to the expansion of freedom and democracy around the world. They produce an annual global report, titled "Freedom in the World" The report (Appendix A2-24) analyzes countries political rights and civil liberties. It is composed of numerical ratings and descriptive texts for each country and a select group of territories. It uses a three-tiered system consisting of scores, ratings, and status."
Freedom House scores range from 1 to 7 with 1 being the best.
The City of Los Angeles' Oil and Gas Health Report (Council File 17-0447, 07/2019, Page 141) similarly cites a source of measurement for the Environmental Standards of Oil Exporting Countries:
"Environmental standards are administrative regulations or law implemented for the treatment and maintenance of the natural environment. Environmental standards are set by local and national governments to prohibit specific activities, develop monitoring standards, and/or require permits for the use of land, water, or air. The standards can vary dramatically by country and by the type of environmental activity.
The Environmental Performance Index (EPI) is a joint project of the Yale Center for Environmental Law & Policy (YCELP) that measures global environmental standards. The 2018 report (Appendix A2-23) ranked 180 countries on 24 performance indicators across ten issue categories covering environmental health and ecosystem vitality. These metrics provide a gauge at a national scale of how close countries come to established environmental policy goals. The EPI is produced in collaboration with the World Economic Forum (WEF)."
EPI scoring is on a 100-point scale with 100 being the best.
CRC has assessed the recent ESG performance of California's crude slate in conjunction with these independent, third-party evaluations. This evaluation involved transforming ratings of civil liberties and political rights to a 100-pointlow-to-high scale and adjusting scores to a median environmental rating of 50 across years to remove differences between methodologies from year to year.
As shown in the graph to the right, each of these ESG measures has shown degradation in the past four years, reflecting both the declining ESG performance of the oil exporting countries and California's increased energy reliance on and financing of regimes that do not share our values toward human rights, political freedoms, civil liberties and environmental protection.
Index Value (1 to 100)
IMPORTED OIL SHOWS WORSENING
ESG PERFORMANCE
69
67
65
63
61
59
57
55
2015 | 2016 | 2017 | 2018 | |
Political Rights | Civil Liberties | Environmental Performance | ||
Notable are:
The 10-point reduction in the political rights index, a measure of increasing oppression; and
The consistent decrease in the environmental performance of oil exporting countries - which do not apply California's stringent environmental regulations, emission controls or GHG Cap-and-Trade program.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 15 |
CRC Sustainability Leadership
Sustainability Team and Management Approach
Risk Management
2030 Sustainability Goals
Carbon Capture and Sequestration (CCS)
Methane Capture
Water Recycling
Renewables Integration
CRC SUSTAINABILITY LEADERSHIP | TEAM MEMBERS AND MANAGEMENT APPROACH |
Sustainability Team and Management Approach
California Resources Corporation (CRC) is dedicated to fostering sustainable growth to meet the future energy needs of all Californians. We seek to proactively advance the state's energy self-sufficiency by advocating and implementing policies that promote the safe and responsible development of California's abundant natural resources.
As a responsible steward of California's ample oil and natural gas resources, we optimize local energy production to the world's strongest safety, labor, human rights and environmental standards. In doing so, we strive to improve the quality of life for California's families and communities by championing access to affordable, reliable and resilient energy.
CRC's dedication to a vibrant, sustainable California starts with our values - Character, Responsibility and Commitment. To help our workforce carry out these values, our Board of Directors established three specific Health, Safety and Environmental (HSE) Principles that apply to everything we do:
- Safeguard people and the environment in the design, operation and maintenance of our facilities;
- Engage proactively with neighbors, regulators, suppliers, customers, employees, investors and other stakeholders to serve as an active and supportive community partner; and
- Promote conservation of water, habitat and energy in our operations.
CRC's Board of Directors also established a Sustainability Committee to provide direction and oversight of the implementation of CRC's sustainability strategy, HSE management system and community outreach to foster sustainable growth in accordance with the Board's HSE Principles. Further, CRC has established both annual and long-term goals to foster continuous improvement in implementing our sustainability strategy and HSE Principles.
Each year, CRC sets annual Sustainability Metrics that include quantitative HSE goals on health and safety, spill prevention and water conservation, as well as annual project milestones to advance our 2030 Sustainability Goals. Performance on these Sustainability Metrics directly impacts compensation of our management team and our entire workforce.
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CRC SUSTAINABILITY LEADERSHIP | TEAM MEMBERS AND MANAGEMENT APPROACH |
One of the principal elements of our strategy is a proactive and collaborative approach to safety, environmental protection, regulatory development and community relations. CRC's Director of Sustainability, Manager of New Energy Ventures, EOR and CCS Manager and our multi- disciplinary Sustainability Team evaluate and prioritize emission reduction, low carbon and energy efficiency projects, including our pioneering design of CalCapture, California's first CCS system, and ongoing projects to capture methane for power generation or sale and reduce other air emissions, further recycle and reuse surplus produced water and incorporate additional renewable energy into our oil and natural gas fields and operations. CRC integrates sustainability, climate change issues and these projects into business decision-making through project design reviews with our HSE, Operations and Facilities teams, our budgeting, business development and life-of-field planning processes, and outreach to regulatory agencies and other stakeholders. These activities and projects are also reviewed periodically by CRC's CEO and the Sustainability Committee of CRC's Board of Directors, and reported to the full Board of Directors.
CRC is committed to using advanced technology such as our Consolidated Control Facility at Elk Hills Field in Kern County to produce oil and natural gas in a safe, environmentally responsible and efficient manner. The company invests
in state-of-the-art equipment and tools to find, develop, produce and deliver energy resources throughout the state. Technology plays an integral role in every phase of this process, from exploration to field development to operations management. Advanced technologies contribute to top performance in areas including safety and environmental stewardship, reservoir description and modeling, well drilling and completions, facility construction, electrical systems, field automation, artificial lift, well and equipment inspection and maintenance, and fluid processing. CRC has
actively reduced methane emissions in several operational areas and continues to pursue future reductions as called for by our HSE Principles and 2030 Methane Sustainability Goal.
CRC includes potential climate risks and opportunities as part of our ongoing process of assessing our overall business risks and opportunities. The scope of this assessment includes consideration of treaties, international agreements, legislation, regulations and government policy initiatives that may affect the raw materials, other inputs and costs to produce our products, and the demand for or restrictions on the use of our products.
Risk evaluation also includes potential physical impacts related to climate change and drought. Projects evaluation includes opportunities to reduce GHG emissions, to sell or beneficially use methane and renewables for electricity and steam generation and carbon dioxide (CO2) for enhanced oil recovery and sequestration, and to mitigate impacts of drought through treatment and reclamation of produced water for irrigation.
In implementing our sustainability strategy, CRC strives to align with the State of California's goals for GHG emissions and carbon neutrality that reflect its prominent role as a signatory of the Paris Climate Accord, which seeks to limit temperature rise to less than 2 degrees Celsius by 2050. In addition to our premier CalCapture CCS project under our 2030 Carbon Sustainability Goal, CRC joined in 2019 with global integrated energy companies, CDP and the Science Based Targets Initiative in a World-leading effort develop a methodology to evaluate how a company's GHG reduction goals may be considered science-based targets under the Paris Accord. CRC also participates in multiple organizations focused on climate mitigation, such as the Fortune CEO Initiative for Climate-Centric Strategies.
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CRC SUSTAINABILITY LEADERSHIP | RISK MANAGEMENT |
Risk Management at CRC
CRC's multi-disciplinary and company- wide HSE Risk Management Program prioritizes safeguarding people and sensitive ecosystems over business or financial impacts. As detailed in CRC's HSE Risk Evaluation and Response Procedure, CRC identifies potential hazards to personnel, environment, property, reputation, or revenue through Process Hazard Reviews (PHRs), inspections, audits, or surveys, and such risks are assessed for potential mitigation opportunities. Through these assessments, risks are prioritized for mitigation using CRC's Risk Matrix, and periodically reassessed. Risks are evaluated covering short term (0-3 years), medium term (3-10 years), and long-term issues (10-50 years). Higher-level risks are reported, validated, and reviewed annually
with the Sustainability and Audit Committees of the Board of Directors to ensure risk management remains a top priority. HSE risk management policies, standards and procedures are in place at all operating locations to identify, prioritize and apply feasible risk mitigation options. CRC's Risk Management Community of Practice leverages the expertise of company engineers and scientists to share opportunities for improvement. CRC's leadership team is responsible for the day-to-day management of risk at CRC.
Risks and opportunities related to climate change are considered at the asset and company-wide levels, including physical risks and regulatory requirements. Each capital project is reviewed by a multi-disciplinary team to evaluate regulatory requirements and project risks and to identify appropriate engineering and administrative mitigation measures. The cost of carbon under California's Cap-and-Trade program and measures to increase energy efficiency, reduce emissions or
releases, and mitigate physical risks associated with climate are included in this evaluation.
For example, physical climate- related risks such as storm flows are incorporated into Process Hazard Analyses (PHAs) for all major projects and are periodically updated. In 2019, CRC conducted 34 PHAs using the Hazard and Operability (HAZOP) process to identify and assess physical risks that may result from process equipment and operational changes. A PHA can identify and suggest modifications to enhance the HSE performance of the facility, including measures that reduce GHG or other emissions and increase efficiency. As a result, several process improvements were made that are designed to reduce the potential for or mitigate the consequences of a loss of process containment in the event of unplanned utility power outages, such as power shutoffs.
Transitional risks, such as government mandates for zero-emission vehicles or building electrification or a shift in consumer preferences towards a low carbon economy and the resulting commentary, are regularly assessed through CRC's risk management system in the event that this may impact CRC's reputation, operations and business opportunities. In 2019, the California Environmental Protection Agency (CalEPA) initiated "AB 74 Studies on Vehicle Emissions and Fossil Fuel Demand and Supply." These studies focus on reducing the demand for and supply of oil and natural gas and other mechanisms to achieve the state's goal of carbon neutrality by 2045. The studies affect all aspects of the oil and gas industry as well as the state's entire economy and are scheduled to be completed
inlate2020. CRC has submitted comments on the scope and design of these studies and CalEPA's and CARB's planning for carbon neutrality. In particular, we have highlighted the importance of our CalCapture CCS project at Elk Hills along with other CCS opportunities both to reduce emissions in the fuel lifecycle (e.g., emissions from refining and California consumers) and to provide CCS services to other industries, such as natural gas power generation or cement manufacturing, not associated with CRC.
CRC manages climate-related opportunities through the Vice President of HSE and Sustainability, Director of Sustainability, Manager of New Energy Venture and a multi- disciplinary Sustainability Team from Operations and Engineering, Corporate Development, HSE,and Production Technology. The Sustainability Team evaluates emissions reduction, energy efficiency, water conservation and climate mitigation projects, including opportunities to incorporate renewable energy into our field operations. These evaluations include marketing or beneficial use of CO2 and methane as well as allowances and offsets under California's Cap-and-Trade program and credits under California's Low Carbon Fuel Standard or GHG reductions, such as through carbon capture and sequestration and methane capture. Specific projects undergo detailed design as applicable from the Director of Corporate Development, the Enhanced Oil Recovery and CCS Manager and our HSE, Operations and Facilities teams. Please see Risk Management Process Tables on pages 79-81 of this report for further details.
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CRC SUSTAINABILITY LEADERSHIP | 2030 SUSTAINABILITY GOALS |
2030 Goals
CRC has set ambitious 2030 Sustainability Goals for carbon, methane, water and renewables that shape scenarios for life-of-field planning and capital allocation at over 130 fields and advance the State of California's goals. As a company dedicated to supplying energy for California by Californians, CRC proudly shares and endorses the state's commitment to conserve our natural resources, protect our environment and mitigate climate change.
Our four 2030 goals demostrate CRC's long-term commitment to sustainable in-state
energy production that meets the needs of California's growing population and California's
leading safety, labor, human rights and environmental standards.
Energy is a principal input for our operations as well as the principal end use of our products. We design and maintain our facilities throughout the state with our neighbors, communities and the environment in mind, and are committed to helping California achieve self-sufficiency in water and energy, which we believe is the highest form of sustainability.
As a company that operates entirely in California, CRC works hard to implement the state's goals of substantially reducing carbon dioxide (CO2), methane and other air
emissions and promoting water conservation and recycling, energy efficiency and renewables integration. Our 2030 Sustainability Goals regarding carbon, methane, water and renewables, are directly linked to state goals and integral to our life-of-field planning for energy production at the 130 fields we operate. These goals demonstrate our long-term investment in advancing the state's social, economic
and environmental objectives by increasing local energy production under California's world-leading safety, labor, human rights and environmental standards.
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CRC SUSTAINABILITY LEADERSHIP
CARBON
2030 SUSTAINABILITY GOALS
Design and permit a carbon capture and sequestration system at Elk Hills Power Plant with CO2 enhanced oil recovery at Elk Hills Field by 2030 to achieve a 30% reduction of our CO2 emissions
from our 2013 baseline. 2013 baseline of 3.58 million metric tonnes CO2e
CRC's Elk Hills Field already has one of the lowest carbon intensity (CI) among the top 10 California oil fields, and is one of only two with a lower CI than typical Saudi imports (The other is our Wilmington Field in LA Basin). Elk Hills is also California's largest in-state supplier of natural gas, providing nearly half of California's natural gas production. CRC's 2030 Carbon Sustainability Goal aims to make both California and Elk Hills a model of long-term carbon capture and sequestration (CCS). In 2019, CRC continued to advance the design of the pioneering CalCapture CCS project - California's first - which would capture CO2 from our
550-megawatt Elk Hills Power Plant and inject that CO2 into underground oil formations, displacing remaining oil and permanently trapping (called sequestering) CO2 deep underground.
CalCapture is expected to further decrease lifecycle GHG emissions from the production and use of each barrel of oil from the project by over 50%. CalCapture would
also reduce CRC's statewide Scope 1 and 2 emissions by 30% below 2013 levels. Elk Hills Power Plant generates electricity from local natural gas to power Elk Hills and surrounding fields and supply enough surplus electricity to a local utility and California's electric grid to power up to 350,000 homes. The reliable electricity supply from the Elk Hills Power Plant has enabled CRC to operate the Elk Hills Field with electric-poweredequipment that increases energy efficiency and reduces air emissions.
CRC has a dedicated CCS team collaborating with leading universities, national laboratories, technology developers and engineering contractors on all aspects of the CalCapture project. The Electric Power Research Institute is conducting a Front-End Engineering Design study for CO2 capture at the power plant that is expected to be completed by the end of 2020. CRC engineers are designing the injection of CO2 into deep oil
and gas formations for enhanced oil recovery (EOR) and its sequestration in those formations under an appropriate monitoring, reporting and verification protocol. Several oil and gas formations at Elk Hills have been recognized by the California Energy Commission as premier candidates for CO2 EOR and sequestration. Under this process, the CO2 sweeps oil from the pore space
in the formation to producing wells, permanently trapping a significant quantity of the injected CO2 in the pore space. At the surface, the remaining CO2 is separated from the oil and recycled for injection in a closed loop, supplemented by additional CO2 from the power plant. This project would put
the Elk Hills Power Plant on a path to become carbon-neutral and help the state meets its 2030 greenhouse gas reduction and 2045 carbon neutrality goals, while continuing to supply affordable, reliable and secure energy for California by Californians for decades to come.
350,000 HOMES
This project would put the Elk Hills Power Plant, which generates electricity for up to 350,000 homes as well as the Elk Hills Field, on a path to serve as a carbon neutral source of baseload electricity.
= 10,000 homes
Elk Hills Field
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CRC SUSTAINABILITY LEADERSHIP | 2030 SUSTAINABILITY GOALS |
METHANE
Reduce methane emissions by 50% from 2013 baseline.
2013 baseline of 13,616 MT CH4
Natural gas, comprised mainly of methane, is a valuable energy source that is essential to California's economy and Californians' way
of life. Natural gas is critical to the affordability and reliability of California's electricity grid, by balancing the cost and intermittent nature of renewables like solar and wind. Natural gas is also the preeminent fuel for heating and cooking, whether at home or in industrial or commercial settings, where it is far more efficient than comparable electric appliances.
Because of methane's value as a fuel, and its regulatory status as a greenhouse gas, it is important to capture methane for beneficial uses wherever feasible, and to reduce emissions. Both the state and CRC have set aggressive goals to reduce methane emissions. The state's goal is to reduce methane emissions in 2030 by 40% below the statewide 2013
level. CRC's parallel 2030 Methane Sustainability Goal requires a 50% reduction in methane emissions from our operations, also compared to a 2013 baseline. We selected 2013 as our baseline to align with the state, and 2013 is also the year before CRC was formed. Our methane emissions are calculated using California's specified emission factors and protocols and our reports are verified by independent third parties approved by the state.
It is important to note that CRC and its predecessor have for years invested significant resources to produce natural gas for beneficial use and minimize emissions, both in design and construction of new facilities and in retrofitting existing facilities. Our construction of integrated
gas gathering, compression and processing facilities near our fields has helped us to ensure a reliable local supply of natural gas for our
utility customers and California communities, particularly when interstate pipelines and utility storage facilities undergo inspection and maintenance.
To reduce methane emissions further, we are focused on projects like upgrading gas compression, changing gas-operated pneumatic valves to compressed air, and evaluating how we can facilitate the delivery and improve the quality of renewable biogas from agricultural facilities through blending with our natural gas production.
In 2018, CRC surpassed its 2030 methane reduction goal and in 2019, we further reduced methane emissions, achieving nearly a 63% reduction since 2013, and we continue to implement reduction projects.
CRC devotes significant resources to capture methane, both in design and construction of new facilities and in retrofitting existing facilities to minimize air emissions.
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CRC SUSTAINABILITY LEADERSHIP | 2030 SUSTAINABILITY GOALS |
WATER
Increase volume of recycled produced water by 30% above 2030 baseline.
2013 baseline of 106,213 acre-feet.
Our 2030 Water Sustainability Goal is to significantly increase the volume of produced water we reuse, recycle or reclaim against a 2013 baseline, which was the year before CRC's formation. This goal is important because it reflects the beneficial use of produced water from underground oil and gas formations that is only accessible to the state's agricultural or industrial water supply through in-state production. This goal builds on our annual water conservation metric, which measures our delivery of treated and reclaimed water to agriculture against our purchased fresh water.
In 2019, we delivered three gallons of reclaimed water to agriculture for every gallon of fresh water we purchased, helping to increase the beneficial use of produced water.
Meeting our 2030 Water Sustainability Goal requires ongoing investment
in water treatment and conveyance systems by our dedicated engineers and hydrologists. As of year-end 2019, we had increased our recycled produced water volume by more than 14.5% above our 2013 baseline, and we are on track to achieve our 2030 Water Sustainability Goal.
As of year-end 2019,
we have INCREASED our recycled produced water volume by almost
CRC is also a net water supplier.
5.35BILLION GALLONS
OF TREATED, RECLAIMED WATER PROVIDED FOR AGRICULTURE IN 2019
For every gallon of fresh water CRC purchased in 2019, we delivered three gallons of reclaimed water to agriculture.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT
CRC SUSTAINABILITY LEADERSHIP | 2030 SUSTAINABILITY GOALS |
RENEWABLES
Integrate renewable power into oil and gas operations by generating an additional 10 megawatts from renewable sources
CRC's 2030 Renewable Sustainability Goal is to integrate solar and other renewable energy directly with oil and gas operations wherever feasible. CRC has a dedicated New Energy Ventures team focused on developing renewable projects at our oil and gas fields to maximize efficient energy production.
Renewable energy projects require significant contiguous surface acreage. CRC and its predecessor have enabled third-party solar developers to develop 735 megawatts (MW) of planned or operating commercial solar projects over our mineral properties through surface waiver or mutual use agreements. Even though mineral interests are the dominant estate in California and can prevent inconsistent surface uses that would interfere with efficient access to underlying mineral rights, CRC has facilitated over 25 solar projects in recent years through surface waiver agreements, including
14 large-scale solar projects ranging from 5 MW to 215 MW. Under those agreements, CRC relinquished control over significant portions of
the surface access, while reserving consolidated access to underlying minerals through drilling islands.
In addition to supporting third-party commercial solar, CRC's 2030 Renewable Goal is to generate our own renewable power and integrate that directly with our oil and gas operations. In 2019, CRC entered into Power Purchase Agreements for
40 MW of behind-the-meter solar projects to supply multiple CRC fields, which would reduce our energy use from the grid generate Low Carbon Fuel Standard (LCFS) credits under the Innovative Crude Provisions of the standard. In addition, CRC designed a 2 MW solar project to power our largest office building. As these projects obtain financing, permits and
2,000 | OF CO2 | |||
METRIC | ||||
TONS | PER YEAR | |||
= 1,000 solar panels | ||||
utility interconnection studies, they will position us to surpass our 2030 Renewable Goal in the next few years and continue to lower the carbon intensity of our production portfolio. The combined 777 MW of CRC and third-party projects, when built and operating, could power every electric car in California today. We are also evaluating other potential renewable projects and technologies that complement our operations and utilize our substantial acreage, wells and
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Environment
Our Ongoing Environmental Efforts in California
Biodiversity
Water Conservation
Preventing Releases
Minimizing Waste
Air Emissions
Methane
Greenhouse Gas (GHG)
CRC Funding of State GHG Reduction Investments
Renewable Energy
Well Operations
Well Simulation
Public Disclosure
Plugging and Abandonment
CRC Energy Leadership
ENVIRONMENT | OUR ONGOING ENVIRONMENTAL EFFORTS IN CALIFORNIA |
California Resources Corporation (CRC) serves Californians by efficiently producing energy and key raw materials and actively promoting conservation of water, habitat and energy as a responsible steward of natural resources. We design, build and maintain our facilities with our neighbors, communities and the environment in mind using a highly qualified workforce from the California State Building and Construction Trades Council and the United Steelworkers. We operate in coastal, urban and agricultural settings by applying advanced production technologies and control systems, as well as innovative environmental safeguards
and conservation measures. Through our investments in integrated infrastructure, CRC is a net supplier of both water and electricity, unlike oil and gas producers in many other states and countries. CRC's Sustainability Metrics include annual conservation and environmental stewardship targets as well as specific sustainability project milestones to advance the Board's HSE Principles and
to set compensation for our management team and our workforce. CRC has reported and third-party verified GHG emissions since our formation under California's Global Warming Solutions Act (AB 32) and voluntarily reports our
Our California workforce is proud of the commitments and investments CRC has made to actively promote conservation of water, habitat and energy to benefit the communities where we live and work and improve the environment.
emissions data, climate risk assessment, Sustainability Metrics and other mitigation measures annually to CDP (formerly the Carbon Disclosure Project). In January 2020, CDP recognized CRC with a "A-"grade for our 2019 CDP climate disclosure, the highest score received by any oil and gas producer in the U.S. and tied with one other U.S. based company with global operations.
California has imposed the most stringent environmental regulations on the oil and natural gas industry anywhere. Twenty-six state and federal agencies oversee all aspects of CRC's exploration and development of oil and gas properties, production practices, product transportation
and sales in California. Foreign governments and other states do not follow California's world-leading standards such as the California Environmental Quality Act, AB 32 GHG Cap-and-Trade program, Methane Rule, extensive vapor recovery and emission controls, Petroleum Safety Orders and the comprehensive California Geologic Energy Management Division (CalGEM) regulations of drilling, completion, operation, plugging and abandonment. CRC's HSE and sustainability programs often surpass California's stringent regulatory requirements.
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ENVIRONMENT BIODIVERSITY
Biodiversity
CRC works closely with the U.S. Fish and Wildlife Service, the U.S. Bureau of Land Management, the California Department of Fish and Wildlife, universities and non-profit organizations like the Wildlife Habitat Council to promote habitat conservation and biodiversity. We support and research native flora and fauna in our operating locations, minimize disruption of those species, and conserve and restore habitat. By implementing improved and enhanced recovery techniques in mature oil and gas fields and applying directional and multi-pad drilling technologies and well stimulation, we extend the productivity of existing infrastructure and reduce the surface area needed for
oil and gas production. These approaches enable us to complete several wells from a single drilling site, minimizing the footprint of oil and gas development. As a result, we preserve significant natural habitat that would otherwise be lost due to more intensive surface uses such as residential, commercial or industrial development like commercial solar projects.
Shortly after acquiring our flagship Elk Hills Field in Kern County from the U.S. Government in 1998, we established
a Habitat Conservation Area of more than 8,000 acres to protect threatened and endangered species and their habitat that is overseen by the U.S. Fish and Wildlife Service and the California Department of Fish and Wildlife, and
to preserve Native American cultural resources. Elk Hills is home to the San Joaquin kit fox, Blunt-nosed leopard lizard, Giant kangaroo rat, Tipton kangaroo rat, San Joaquin antelope squirrel, Western burrowing owl and several native plant species which we are committed to protecting. In fact, the Wildlife Habitat Council has certified the Elk Hills Conservation Area for our proactive environmental
management. In 2016, CRC received a 50-year state permit from the California Department of Fish and Wildlife that, at full field development, will preserve an additional 17,500 acres of habitat in perpetuity.
The resulting 25,500-acre conservation area will be 160 times larger than Disneyland and occupy more than half the surface area of the Elk Hills Field, putting us close to Governor Newsom's goal of preserving 30% of California lands for habitat.
The Wildlife Habitat Council has also certified our coastal habitat conservation programs at the four THUMS oil production islands in Long Beach Harbor and the Huntington Beach Field. CRC received the Council's 2016 Landscaping Project Award for the THUMS islands, which provide both an excellent habitat for native coastal species and an educational opportunity for schools, scouting groups and other community members. We have actively supported
other conservation organizations, such as the Aquarium of the Pacific in Long Beach, The Nature Conservancy's water management efforts in Sacramento County, and the Wind Wolves Preserve in Kern County. We have also planted 67,000 trees in the past five years in our orchard properties, and support urban tree planting in the communities where we operate through volunteerism and donations.
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ENVIRONMENT | WATER CONSERVATION |
Water Conservation
Unlike most oil and gas producers in other parts of the world who are net consumers of water, CRC is a net water supplier to the state.
CRC's hydrologists, environmental scientists, engineers and operations personnel work diligently to implement conservation and recycling projects that decrease our fresh water use, develop alternative water sources like repurposing treated produced water from oil and gas reservoirs that would not otherwise be accessible, and help to sustain fresh water resources in the communities where we operate. Thanks to these investments, 90%
of our produced water was reused, recycled or reclaimed in 2019, a company record. Our delivery of reclaimed water to agriculture is particularly important as a reliable
supply for Central Valley farmers to sustain thousands of acres of productive farmland. We are committed through our 2030 Water Sustainability Goal to significantly increase the volume of produced water we recycle and maintain our role as a net water supplier.
CRC's investments in water conservation and recycling directly advance the state's policy under Water Code Section 106.5 that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The state's Water Conservation Act of 2009 mandated a 20% reduction in statewide water use by 2020 to be achieved through implementation
of best management practices and
optimization of water reclamation opportunities in the urban, industrial and agricultural sectors. The State Water Resources Control Board (State Water Board) and the Regional Water Quality Control Boards (Regional Boards) have also expressly encouraged the use of recycled water to reduce demand on potable (i.e., drinking water) supplies and other fresh water sources. In particular, these agencies have sought to restrict the use of potable water for non- potable uses wherever recycled water is available. CRC has demonstrated our commitment to conserve potable water and to reuse, recycle and reclaim other water supplies, both in recent drought years and in our 2030 Sustainability Goals.
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ENVIRONMENT | WATER CONSERVATION |
The vast majority of water managed by CRC, called "produced water," occurs naturally in hydrocarbon reservoirs and is brought to the surface during the production of oil and gas. CRC separates produced water, which typically contains minerals, from the produced oil and gas. In 2019, 90% of our produced water was recycled, either directly in our improved or enhanced recovery operations or, after reclamation, by agricultural water districts for use in irrigation and recharge. The remainder was disposed via reinjection into zones permitted by regulatory agencies. California Senate Bill 1281 requires California oil and gas producers to submit detailed reports on sources and disposal
of water used in their operations, which are publicly accessible through CalGEM's water use reporting website.
We directly reuse or recycle 78% of our produced water in our improved or enhanced recovery operations, typically in a closed loop system by
reinjecting it into the same oil and gas reservoirs from which it came. Even though recycled produced water is already our primary water source for our operations, we have continued to invest in water recycling to ensure that our fresh water use does not affect the availability of high-quality water to cities, towns, farms and ranches near our operations. These investments have enabled CRC to expand our role as a net water supplier to agriculture every year since our formation, supporting over 5,000 acres of productive farmland and associated farmworker jobs.
In 2019, we supplied 5.35 billion gallons (16,405 acre feet) of treated, reclaimed produced water to agricultural water districts, 12% of our produced water. This delivery set a new company record and was almost triple the 2013 volume. For every gallon of fresh water we purchased in 2019 for our statewide operations, we supplied
over 3 gallons of reclaimed water to agriculture. This water is essential for Central Valley farmers since it reduces their demand for groundwater and alleviates drought conditions. Our reclaimed water is blended with water that agricultural water districts obtain from other sources. The reclaimed water and blended irrigation water are sampled and analyzed on a monthly and quarterly basis by an independent state-certified laboratory for up to 120 compounds and reported in a publicly accessible format to the Regional Board to ensure the water used for irrigation or recharge meets water quality permit requirements. Moreover, water districts and the state's Food Safety Expert Panel have also conducted crop sampling to validate the safety of reclaimed produced water for irrigation.
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ENVIRONMENT | WATER CONSERVATION |
In 2019, we achieved our largest water delivery to agriculture,
and we recycled or reclaimed nearly 100 percent of the produced water
from steamflood operations at our Kern Front Field.
In 2019, we recycled or reclaimed nearly 100% of the produced water from steamflood operations at our Kern Front Field. Our reclaimed water delivery is expected to decrease modestly in 2020 since a neighboring Kern Front operator shut-inwells and is no longer supplying produced water to us for reclamation. We continue to evaluate projects to replace fresh water with recycled water in our operations wherever feasible and reclaim even more water for beneficial uses. Recycling and reclaiming produced water adds to California's water balance a new source for agriculture and industry and extends supplies from existing water sources. Through our internal reuse and recycling and our supply of reclaimed produced water for agriculture, we help the state to sustain freshwater resources for cities, towns, farms and ranches, as well as for wildlife in river ecosystems.
CRC WATER CONSERVATION METRIC
320% | ||||
Metric | 300% | 302% | ||
289% | ||||
Conservation | 280% | 276% | ||
260% | ||||
CRC Water | 240% | |||
220% | ||||
200% | 2017 | 2018 | 2019 | |
Our Board of Directors has adopted an annual Sustainability Metric for water conservation to measure our performance as a net water supplier to agriculture. The water conservation ratio is our volume of reclaimed water delivered to agriculture divided by our total purchased volume of
fresh water. A ratio above 100% means that we are a net water supplier. As described in our Proxy Statement, this metric directly affects the incentive compensation of our employees. As shown in the graph to the right, in 2019, we further strengthened our water conservation ratio.
About 55% of our purchased fresh water is used in power plants to generate electricity at Elk Hills and Long Beach. The remainder of our purchased fresh water is used in oil and gas drilling, steam generation and farming operations on land that we own. During the height of the drought in 2016 and to help the communities where we operate, CRC
voluntarily reduced our use of fresh water from a local water district by 43%, allowing that district to meet its mandatory state water restrictions without curtailing its municipal or agricultural customers.
Finally, our Board adopted a 2030 Sustainability Goal to significantly increase the volume of produced water we reuse, recycle or reclaim by 30% against a 2013 baseline. This goal is important because it reflects the beneficial use of produced water from underground oil and gas formations that is only accessible to contribute to the state's agricultural or industrial water supply because of in-state production. As of year-end 2019, we had increased our recycled produced water volume by 14.5% from our 2013 baseline, and we are on track to achieve our 2030 Sustainability Goal for water conservation.
For CRC specific definitions on water conservation and recycling, please see page 82.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 30 |
ENVIRONMENT PREVENTING RELEASES
Preventing Releases | Oil Spill Prevention |
Preventing releases of oil and natural gas is a priority in all our operations. CRC continues to expand our automated process, pipeline and well monitoring and control systems to minimize the potential for releases and to rapidly detect and mitigate spills that occur. CRC's asset integrity program prioritizes facilities, pipelines and gathering lines for evaluation, inspection and maintenance, and focuses our investments to prevent corrosion, provide secondary containment, train operators on release prevention and response, and audit and inspect operations.
CRC also emphasizes the authority of our employees and contractors to shut down facilities, pipelines and wells safely to prevent a potential incident-without the need to first contact a supervisor. Together, these efforts have enabled our personnel to identify, report and immediately take steps to mitigate incidents, including those caused by third parties.
Oil spill prevention is one of our key Sustainability Metrics, which is important to demonstrate sustained asset integrity and rapid environmental response by limiting losses of crude oil and condensate to a minute fraction of production. Our results reflect that our systems are designed both to prevent releases and to promptly report, contain and mitigate those that occur.
CRC devotes significant resources to preventing spills through construction, maintenance and mechanical integrity programs. We were the first oil and natural gas company in California
to sign a statewide Project Labor Agreement with the California State Building and Construction Trades Council to ensure that our facilities are built and maintained by a highly qualified California workforce. Our dedicated operations and mechanical integrity teams inspect and maintain our pipelines and facilities, which are also routinely assessed by internal and third-party risk engineers and audited by multiple regulatory agencies.
CRC also has a robust emergency response program, with a Communications Operations Center that is staffed 24 hours per day year- round to report and address medical, safety, security or environmental incidents and dispatch company personnel, environmental contractors and local emergency responders.
We conduct regular table-top and full deployment drills in sensitive ecosystems near our operations in conjunction with federal, state and local emergency responders to ensure preparedness and alignment should a spill occur. CRC's operators and HSE professionals mobilize to such incidents, and aid local emergency responders in third-party events unrelated to our operations such as wildfires or vehicle accidents. Safety and environmental events are tracked consistently in CRC's Knowledge Management System for reporting, investigation and resolution as well as continuous improvement.
CRC's oil spill prevention rate compares the net volume of crude oil and condensate spilled in reportable releases that is not recovered in liquid form against our total production on
REPORTED RELEASES AND PREVENTION RATE
250 | 100.0000% | ||||||||||
200 | 99.9999% | ||||||||||
Releases | (%) | ||||||||||
150 | 134 | ||||||||||
99.9998% | Rate | ||||||||||
Released | |||||||||||
Number | PreventionSpillOilPreventionSpillOil | ||||||||||
23 | 99.9996% | ||||||||||
Reportable | |||||||||||
Oil | 99.9997% | ||||||||||
100 | |||||||||||
Net | |||||||||||
of | |||||||||||
and | 50 | ||||||||||
99.9995% | |||||||||||
0 | |||||||||||
99.9994% | |||||||||||
2017 | 2018 | 2019 | |||||||||
Number of Reportable Releases | Net Oil Released (bbl) | Oil Spill Prevention Rate (%) |
a barrel of oil equivalent basis. Our Board adopted this metric because it focuses on both prevention and rapid containment and mitigation of releases. It is important to note that the small amount of crude oil that is not recovered in liquid form is actually contained in excavated soil that is removed and properly disposed to minimize impact to sensitive environments. Our performance on this metric directly affects compensation for our management team and our workforce.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 31 |
ENVIRONMENT | MINIMIZING WASTE | AIR EMISSIONS |
Minimizing Waste
CRC's operations maintain robust waste minimization plans to manage and reduce all forms of waste, including from drilling and production activities and business offices in accordance with our Board's HSE Principles. All of CRC's products are shipped exclusively in bulk, so they do not require individual containers or other packaging. The vast majority of our produced water is reused, recycled or reclaimed, rather than being disposed. Similarly, the company reuses drilling muds and returns vendor product containers to our suppliers for reuse. In addition, the company's Sustainability Team champions our recycling programs at our plants, fields and offices and in community outreach efforts.
Reducing Air Emissions
Reduce
Reuse
Recycle
Treat
Dispose
California has the most stringent air quality laws and regulations governing oil and natural gas production, transportation, and other commercial and industrial development. As a company operating exclusively in California, CRC has invested significant resources in vapor recovery systems and other emissions control equipment. Smaller oil and gas companies are often exempt from certain aspects of these laws and regulations. When CRC acquires their properties, the more stringent rules become applicable. The photograph below shows in pink the vapor recovery system that a CRC installed to capture and eliminate sources of air emissions, shortly after acquiring the pre-existing oil tank battery from another company.
CRC also reduces air emissions through investments in replacing older, less efficient equipment and compressors, replacing diesel or field gas equipment with electrical
equipment supplied by our Elk Hills and Long Beach power plants, and generating energy from remote field gas through compressed natural gas systems or microturbines. For example, nearly all of the wells at CRC's flagship Elk Hills and Wilmington Fields are operated with electric pumping units supported by automated control systems.
CRC reports emissions or activity levels from our facilities to the California Air Resources Board (CARB) and regional air districts. Reports are inventoried and periodically made available by CARB in a database format. The most current database year is 2018. These data are derived using a combination of state-mandated protocols and emission factors, periodic source testing and continuous emissions monitoring equipment for certain facilities.
GHG EMISSIONS | |||
4.0 | |||
e) | 3.6 | 3.5 | |
and 2 | 3.5 | ||
MTCO | 3.2 | ||
Upstream | |||
3.0 | |||
(million | |||
2.5 | |||
from | |||
Operations | 2.0 | ||
emissions | 1.5 | ||
Midstream | 1.0 | ||
GHG | 0.5 | ||
Total | |||
0.0 | |||
2017 | 2018 | 2019 |
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 32 |
ENVIRONMENT | AIR EMISSIONS |
Ozone Precursor Emissions
Ozone is formed when emissions of nitrogen oxides (NOx) and volatile organic compounds (VOC) react in the atmosphere. CARB data reflect that emissions from CRC facilities have been reduced on both an absolute basis and relative to oil and natural gas production (per barrel of oil equivalent) between 2017 and 2019. For example, total emissions of VOC and NOx decreased by 10.3% and 36.7%, respectively. Similarly, combined ozone precursor emissions on a per-barrel basis decreased by 13.1% over the same period.
OZONE PRECURSOR EMISSIONS
CONTINUE TO DECREASE
1000 | ||||
900 | 873 | 820 | ||
Year) | 800 | |||
700 | 670 | |||
per | ||||
600 | ||||
(Tons | ||||
500 | ||||
NOx | 400 | |||
& | 300 | |||
VOC | ||||
200 | ||||
100 | ||||
0 | 2017 | 2018 | 2019 | |
Other Compounds
Federal and state laws and regulations govern other criteria pollutants, such as carbon monoxide, sulfur oxides and particulate matter, that are emitted by a wide variety of commercial, agricultural, industrial and government source types and activities. The emissions are either calculated using government- approved emission factors or measured by government-regulated source tests or continuous emissions monitoring systems. They vary from year to year for a given facility depending on activity levels, the amount of raw materials
used and the output produced. In total, emissions of these other criteria compounds decreased from 2015 through 2019 at CRC facilities due primarily to reductions in carbon monoxide.
California's Air Toxics Hot Spots Act and other federal and state laws and regulations require certain manufacturers, refineries, utilities and oil and gas facilities to evaluate emissions of substances defined as toxic or hazardous air pollutants.
Emissions of such compounds from CRC's facilities are lower than applicable thresholds established by California's regional air districts and CRC's facilities are not classified as major sources of those compounds.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 33 |
ENVIRONMENT METHANE
Capturing Methane
In 2019, CRC further surpassed our 2030 Goal, reducing methane emissions from our operations by nearly 63% since 2013.
TOTAL METHANE EMISSIONS | ||||
9,000 | 8,196 | |||
8,000 | ||||
Emissions Tonnes) | 7,000 | |||
6,000 | 5,447 | 5,041 | ||
5,000 | ||||
(Metric | 3,000 | |||
Methane | 4,000 | |||
2,000 | ||||
1,000 | ||||
0 | ||||
2017 | 2018 | 2019 |
Natural gas (comprised primarily of methane, which is ubiquitous in nature) is a valuable product that is essential to California's economy and Californians' way of life. CRC is by far the leading in-state producer of natural gas, a fuel that has delivered substantial GHG emission reductions in California, as well as nationwide, and perfectly complements renewable energy. CRC devotes significant resources to produce clean natural gas and minimize emissions, both in design and construction of new facilities and in retrofitting existing facilities. On January 1, 2017, California law established a statewide goal of reducing methane emissions by 40% from a 2013 baseline by 2030 under Senate Bill 1383. To demonstrate alignment with and advance the State's goal, CRC established an even more aggressive
2030 Methane Sustainability Goal - to reduce methane emissions from our operations by 50% from the same 2013 baseline year set in SB 1383.
We achieved our 2030 Methane Sustainability Goal in 2018 with a 60% reduction in emissions since 2013 and extended these reductions in 2019 to nearly 63% since 2013. Our annual methane emissions reports apply California's specified emission factors and protocols and are validated by an independent third-party expert.
The vast majority of the natural gas we produce is either used to generate electricity at the Elk Hills Power Plant or other electricity producers or transported by utilities to California homes, schools, farms and businesses.
Delivering natural gas to a utility or power plant customer typically requires processing facilities and pipelines. When processing facilities or pipelines or the customer's power plant are not available, such as during maintenance, we flare natural gas under permits issued by regulatory agencies. Flaring is a safe process that combusts the natural gas and allows us to maintain wells and reservoirs at our fields in a steady state of operation. We seek to minimize flaring through technologies such as vapor recovery, microturbines and compressed natural gas (CNG) production. In 2016, for example, a third party discontinued its gas transmission pipeline service to one of our fields, preventing us from transporting our natural gas to our utility customers. Although we have a permit to flare the natural gas, CRC's Sustainability Team worked diligently with another company to install a CNG operation at our field. This CNG process has both significantly reduced our flaring and generated a useful product that powers steam generation at another field. As described in CRC's 10-K, CARB adopted a Methane Rule
in 2017 requiring leak detection, controls and reporting for methane used in certain equipment, and this rule is more stringent than federal regulations. To support CARB's methane reduction efforts and to advance CRC's 2030 Methane Sustainability Goal, CRC increased our inspection frequency at our fields and completed a separate project to replace certain natural gas-actuated pneumatic valves with alternatives that do not emit methane, such as solar- powered air compression.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 34 |
ENVIRONMENT | GREENHOUSE GAS |
Reducing GHG Emissions
As a signatory to the Paris Climate Accord, which seeks to limit global temperature rise to less than 2 degrees Celsius by 2050, the State of California has published ambitious goals requiring significant statewide GHG emission reductions by 2030, 100% of retail electricity from renewable sources by 2045 and carbon neutrality by 2045, among others. In addition to our methane capture described above, CRC strives to increase energy efficiency and reduce emissions of GHG and other compounds in our operations. We incorporate California's cost of carbon into
our life-of-field planning process from the Cap-and-Trade program under the Global Warming Solutions Act. Through our purchase of GHG allowances and offsets, our ongoing design of the CalCapture carbon capture and sequestration (CCS) project, and our 2030 Sustainability Goals for Carbon, Methane, Water and Renewables, CRC actively contributes to the state's efforts to mitigate or adapt to climate change in accordance with its GHG reduction and carbon neutrality goals to sustain reliable, cost-effective energy supplies
for all Californians.
CRC and its predessor have reported GHG emissions for years, first voluntarily and then, since 2013, through mandatory reporting to both CARB under the Global Warming Solutions Act and the U.S. Environmental Protection Agency (EPA) under the Clean Air Act using protocols established by those agencies. The EPA requires reporting for certain direct GHG emissions source categories and certain GHG supplier categories, as well as carbon dioxide (CO2) injection for enhanced oil recovery. CRC provides such data for our oil and gas operations, natural gas-fired power plants and natural gas and natural gas liquids facilities operated by us. Consistent with other state regulations, CARB has more stringent and comprehensive reporting regulations than the EPA, and emissions reports from CRC's facilities are available through the respective EPA or CARB websites. CRC's GHG emission reports to CARB are verified by independent, state-accredited experts and CRC acquires allowances or qualified offsets under California's Cap-and-Trade program to mitigate our GHG emissions.
Demonstrating CRC's commitment to transparency, CRC also reports voluntarily on our GHG management program, climate risk
assessment and mitigation, Sustainability Metrics and
GHG INTENSITY
30 | |||||
26.5 | |||||
Emissions | 25.9 | ||||
25 | |||||
MBoe) | 22.2 | ||||
20 | |||||
GHG 2 e/ | |||||
CO | 15 | ||||
Upstream | |||||
10 | |||||
(MT | |||||
Intensity | |||||
Operated | 5 | ||||
0 | |||||
2017 | 2018 | 2019 |
emissions to CDP. In January 2020, CRC received an A- from CDP for our 2019 climate disclosure, scoring at CDP's Leadership Level. Tying for first with one other U.S.-based exploration and production company with global operations. This recognition highlights CRC's differentiated value as a California E&P and the company's ongoing commitment to provide sustainable, safe and reliable energy solutions for Californians. Collectively, our GHG reporting helps us to align our life-of-field planning and Sustainability Metrics with the state's goals under the Paris Accord.
GHG emissions from CRC's upstream oil and gas production facilities, reported as metric tons of CO2 equivalent, have decreased steadily from 2017 through 2019 by 22% on an absolute basis and by 14.3% relative to production on a per barrel of oil equivalent basis. Importantly, our methane emissions have decreased by over 40% over the same period.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 35 |
ENVIRONMENT | CRC FUNDING OF STATE GHG REDUCTION INVESTMENTS |
CRC Funding of State GHG Reduction Investments
CRC accounts for and reports GHG emissions to CARB under California's pioneering Cap-and-Trade program. These emission reports undergo third- party verification to ensure accuracy. CRC mitigates our GHG emissions through state-issued allowances and approved offsets. Most allowances are initially sold by CARB at state auctions and offsets are subject to rigorous review by CARB under approved quantification protocols. CARB uses the proceeds raised by these auctions to fund billions of dollars of environmental projects that further the goals of reducing emissions, improving energy efficiency and mitigating climate change.
Unlike CRC, oil and gas producers in other states and countries do not account for and mitigate their GHG emissions from their operations under California's Cap-and-Trade program, and they don't contribute to California's GHG mitigation investments. They also don't apply California's other leading environmental standards. As a result, replacing oil and gas imports with local California production would help to mitigate GHG emissions and improve global environmental quality.
The State's GHG reduction fund has received auction proceeds of more than $12.5 billion under the Cap-and-Trade program, and invested nearly $12.7 billion from GHG auction proceeds to over 428,000 projects in 16 categories
listed below from fiscal years 2013 through 2019, according to CARB's 2020 Annual Report to the Legislature.1 CRC allocated approximately $232.5 million from 2013-2019 to offset GHG emissions under the Cap-and-Trade program. Approximately $211.8 million was used to purchase GHG allowances at auction or from third parties, and CRC purchased an additional $20.7 million in offsets from sustainable forestry and other reductions. The following table illustrates how CRC's Cap-and-Trade expenditures advance the state's GHG mitigation goals. CRC's Cap-and-Trade expenditures, if invested by CARB in the manner noted in its Annual Report, would translate into the following GHG reduction investments.
Illustrative CRC Funding of State GHG Reduction Investments through California's Cap-and-Trade Program (2013-2019)
Project Investment | CARB GHG Reduction Fund Allocation1 | CRC GHG Investment Amount2,3 ($MM) |
CRC Direct Sustainable Forestry Offsets | $ 20.7 | |
High-Speed Rail Project | 21.8% | $ 46.2 |
Low Carbon Transportation | 18.1% | $ 38.3 |
Affordable Housing and Sustainable Communities | 15.4% | $ 32.7 |
Transit and Intercity Rail Capital | 8.9% | $ 18.8 |
Community Air Protection | 6.9% | $ 14.7 |
Sustainable Forests | 5.1% | $ 10.8 |
Low Carbon Transit Operations Program | 4.0% | $ 8.4 |
Dairy Methane | 2.4% | $ 5.1 |
Funding Agricultural Replacement Measures for | 2.1% | $ 4.5 |
Emission Reductions | ||
Transformative Climate Communities | 2.0% | $ 4.3 |
Low-Income Weatherization Program | 1.7% | $ 3.7 |
Fire Prevention | 1.6% | $ 3.3 |
Waste Diversion | 1.3% | $ 2.8 |
Urban Greening Program | 1.3% | $ 2.7 |
Others (e.g., wildfire prevention, wetlands | 7.3% | $ 15.4 |
restoration, climate adaptation) | ||
Total | $232.5 | |
- California Air Resources Board, Annual Report to the Legislature, March 2020
- California Air Resources Board, Greenhouse Gas Reduction Fund Appropriations by Fiscal Year (as of October 15, 2019), reflecting totals for FY 2013-14 through 2019-20
- This column includes the $20.7 million incurred to purchase sustainable forestry offsets and applies CARB's investment allocation for statewide GHG mitigation to the $211.8 million CRC incurred to purchase GHG allowances from 2013 through 2019 to illustrate the types of projects and levels of funding from CRC's participation in the Cap-and-Trade program.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 36 |
ENVIRONMENT | RENEWABLE ENERGY |
Renewable Energy
CRC believes that oil and gas production and renewable energy complement one another, particularly when co-located to share existing infrastructure and land use in longstanding oil and gas fields.
More than 30% of CRC's purchased electricity comes from renewable sources.
CRC has a 2030 Sustainability Goal to integrate renewable energy with oil and gas operations by generating an additional 10 MW of power from renewable sources.
Even though mineral interests are the dominant estate in California and can prevent inconsistent surface uses that would interfere with efficient access to underlying mineral rights, CRC and its predecessor have facilitated 25 solar projects totaling 735 MW over our mineral properties through surface waiver and mutual use agreements. Under those agreements, CRC relinquished control over significant portions of the surface, while reserving access to underlying minerals through designated drilling locations.
In addition to supporting third-party commercial solar, CRC's 2030 Renewable Goal is to generate our own renewable power and integrate that directly with our oil and gas operations. In 2019, CRC entered into Power Purchase Agreements for 40 MW of behind-the-meter solar projects to
RENEWABLE ENERGY USE
MWh) | 400 | 361 | 376 | |
339 | ||||
350 | ||||
(Thousand | ||||
300 | ||||
250 | ||||
Used | 200 | |||
Energy | 150 | |||
100 | ||||
Renewable | ||||
50 | ||||
0 | ||||
2017 | 2018 | 2019 |
supply multiple CRC fields, which would reduce our energy use from the grid and obtain Low Carbon Fuel Standard credits. In addition, CRC designed a 2 MW solar project to power our largest office building. As these projects obtain financing, permits and utility interconnection studies, they will position us to surpass our 2030 Renewable Goal in the next few years and continue to lower the carbon intensity of our production portfolio. The combined 777 MW of CRC and third-party projects, when built and operating, could power every electric car in California today. We are also evaluating other potential renewable projects and technologies that complement our operations and utilize our substantial acreage, wells and facilities in California.
ENVIRONMENT | WELL STIMULATION |
Well Stimulation
Technological developments in oil and gas exploration and production, including well stimulation, have greatly increased the energy security of the United States by ensuring a long-term, ample, affordable and reliable supply of domestic energy and helped to reduce our nation's dependence on foreign imports. Hydraulic fracturing and acid matrix stimulation are engineered practices defined under California law that improve the productivity of targeted oil and natural gas formations in certain fields, thereby
reducing the number of wells and the surface footprint needed to produce the same quantity of oil and natural gas. In 2019, CRC used hydraulic fracturing on less than 5% of the wells we drilled and did not use acid matrix stimulation. Consistent with other regulatory programs, California applies the most stringent and comprehensive regulation of well stimulation in any oil and gas producing state.
Acid Matrix Stimulation
Acid matrix stimulation is a separate well stimulation technique that can increase the permeability of certain oil and gas formations by dissolving minerals deposited in the rock with a low concentration solution of acid in water. Its properties are well understood. This process requires far less water and energy than hydraulic fracturing and the acid is rapidly neutralized by the minerals in the oil and gas formation near the wellbore.
Regulation and Oversight
The State of California has been effectively monitoring well stimulation for decades as part of itscomprehensive rules that address all aspects of oil and gas development. In 2013, California's Legislature enacted Senate Bill 4 (SB-4), the most stringent law governing well stimulation of any oil and gas producing state or country. SB-4 created a new well stimulation permit program and required the state to prepare an independent scientific study and an environmental impact report regarding well stimulation. Under SB-4, CalGEM reviews permit applications
submitted by CRC and other operators that provide detailed information about the well, the stimulation job, and the presence or quality of local ground water. Operators are also required
to make detailed disclosures to multiple agencies and nearby property owners, prepare water management and groundwater monitoring plans and conduct ground water and air monitoring of certain well stimulation jobs under the supervision of state agencies including the State Water Board and CARB.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 38 |
ENVIRONMENT | PUBLIC DISCLOSURE |
Public Disclosure
CRC is committed to public disclosure about our hydraulic fracturing and well stimulation practices. In 2011, CRC's predecessor was an early participant in FracFocus®, a website created by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission to provide for well-specific voluntary disclosure of hydraulic fracturing operations, including the ingredients used
in hydraulic fracturing fluids. In addition to providing a national registry, the website provides factual information about hydraulic fracturing and groundwater protection.
CalGEM's website also provides details about CRC's well stimulation operations, permits and other documents required under SB-4 and the statewide environmental impact report on well stimulation. In 2019, CRC conducted 13 well stimulations, all using hydraulic fracturing, on less than 5% of the gross wells we drilled during the year.
CRC prepares water management plans for all well stimulation jobs and submits data about water sources and quantities used to CalGEM. These treatments used an average of less than
1.4 acre-feet of non-potable fresh water, or
about two-thirds of an Olympic swimming pool, for a total water use of 18 acre-feet.
Importantly, CRC used no potable water for well stimulation in 2019.
After conducting well stimulation, the produced fluid is captured and processed within a closed system. The produced water is typically reinjected into oil bearing formations in the field for improved oil recovery.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT
ENVIRONMENT | PLUGGING AND ABANDONMENT |
Groundwater Monitoring
CRC actively implements detailed groundwater monitoring plans approved by the State Water Board for well stimulation in areas with protected groundwater. Those plans include both pre-stimulation sampling for baseline groundwater quality and periodic post-stimulation sampling and analysis for more than 100 compounds. CRC's groundwater monitoring plans and sample results can be reviewed on the State Water Board's GeoTracker website. CRC has not experienced any spills or incidents during our well stimulation activities under SB-4, and groundwater monitoring has not shown any effect on water quality from CRC's well stimulation activities.
Plugging and Abandonment of Idle Wells
In California, an idle well is defined as a well that has not been used for two years or more and has not yet been plugged and abandoned. Plugging and abandonment involves permanently sealing the well to isolate the subsurface hydrocarbon-bearing formation, so oil and gas can no longer be produced through the well bore. Retaining a well in idle status for future reactivation in oil and gas production, subsidence control or geologic energy storage, instead of plugging and abandoning it, enables safe
and efficient access to subsurface formations without the need to drill and complete a new well.
California law provides operators with a choice of either scheduling idle wells for plugging and abandonment at a defined time in an idle well
management plan or performing additional testing and paying fees to retain the flexibility to return the idle wells to service in the future. Because of the diversity of CRC's portfolio and our life-of-field plans, certain of our subsidiaries conduct additional testing and pay additional fees to retain the right to use idle wells, rather than submitting idle well management plans that require the abandonment of their idle wells at a specified future date.
Regardless of which idle well management approach our subsidiaries follow, we take our duties for future plugging and abandonment seriously. CRC regularly inspects our idle
wells to ensure the equipment is maintained in a safe condition. CRC pays significant taxes and fees to the state, including idle well fees,
to fund the state's direct oversight of plugging and abandonment. For decades, the state has also required CRC and other operators to provide indemnity bonds for plugging and abandonment. In 2019, Governor Newsom signed legislation that requires state agencies to review plugging and abandonment costs and associated bond amounts. As a public company, our asset retirement obligations, including for plugging and abandonment, are reported pursuant to accounting standards. The scale of CRC's property ownership, oil and natural gas resources, project inventory and integrated infrastructure provides substantial cash flow and enduring value for ongoing operations, full-field development and ultimate field abandonment.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 40 |
ENVIRONMENT | CRC ENERGY LEADERSHIP |
CRC Energy Leadership
CRC's operations comprise tens of billions of dollars of private investment in our state over 20 years to meet Californians' energy needs by acquiring and modernizing oil and natural gas fields with substantial resources and integrating these fields with electricity generation and infrastructure. These investments enable us to serve Californians both as the state's largest oil and natural gas operator and as a net supplier of reliable electricity that is vital to California's grid.
The advanced natural gas processing and electric generating plants at Elk Hills and in Long Beach are highly efficient, utilizing locally produced natural gas to generate electricity that powers our operations. The Elk Hills Power Plant also supplies surplus electricity to power over 350,000 homes in the surrounding region.
In fact, in 2019 CRC produced more than twice the total amount of electricity we purchased for our statewide operations, and once again served as a net electricity supplier. CRC's integrated gas processing and power plants have also enabled us to significantly expand our use
of electric-powered equipment to increase efficiency and reduce air emissions. For example, CRC's THUMS subsidiary is one of the world's leading users of electrical submersible pumps to produce oil from the Wilmington Field in Long Beach.
In 2019, the power plants at our Elk Hills and Wilmington Fields used local natural gas to generate 4.2 million
megawatt hours (MWh) of electricity, 58% of which (nearly 2.5 million MWh) was supplied from the Elk Hills Power Plant to a utility or the power grid.
We consumed 2.88 million MWh of electricity in our operations in 2019, meaning that we produced 45% more electricity than we consumed. Our investments in electricity generation demonstrate CRC's commitment
to making California's electricity grid more resilient, and ensure that our operations increase affordable and reliable energy supplies for the communities where we live and work.
In 2019, we purchased 1.2 million MWh for our operations primarily from Southern California Edison and Pacific Gas and Electric Company. Approximately 0.38 million MWh, or 31.7% of our purchased electricity, comes from renewable sources. Although we primarily self-generate electricity using local natural gas, renewable sources comprised 7% of our total electricity consumption in 2019. The estimated 2019 breakdown of our purchased renewable electricity is as follows:
Our Sources of Renewable Energy
Solar | 38.7% |
Wind | 32.1% |
Geothermal | 15.0% |
Biomass | 7.7% |
Small Hydro | 6.4% |
Source: California Energy Commission at energy.ca.gov
CRC's energy leadership extends well beyond our service as the state's largest producer of oil and natural gas and a net electricity and water supplier to Californians. Our 2030 Sustainability Goals for Carbon, Methane, Water and Renewables all relate directly to energy production at our oil and gas fields. In particular, CRC is working on the design of the pioneering CalCapture CCS project at the Elk Hills Field as our 2030 Carbon Sustainability Goal. CRC has a dedicated CCS team that is designing the system to collect CO2 from the Elk Hills Power Plant and inject it into underground oil and natural gas formations at Elk Hills for enhanced oil recovery and long-term carbon sequestration. Several oil and gas formations at Elk Hills have already been identified as ideal candidates for CO2 enhanced oil recovery. Under this process, the CO2 sweeps oil from the pore space in the formation to producing wells, permanently trapping a significant quantity of the injected CO2 in the pore space. At the surface, the remaining CO2 is separated from the oil and recycled for injection in
a closed loop, supplemented by additional CO2 from the power plant. This project, if permitted, funded and installed, would put the Elk Hills Power Plant on a path to become a carbon- neutral source of base-load power and significantly advance the state's long-term greenhouse gas reduction goals while reducing CRC's statewide GHG emissions by 30% against a 2013 baseline.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 41 |
Social
Our Role in Society Prioritizing Community Investing in Our Workforce
Transparent Supply Chain Strengthening Diverse Communities Empowering California Community Stakeholders Our Commitment to Our Neighbors
Powering California Awards and Recognitions
SOCIAL | OUR ROLE IN SOCIETY |
OUR ROLE IN SOCIETY
At a time when uncertainty has spread through every aspect of life, people are searching for sources of stability and places that demonstrate shared values. At CRC, we remain steadfast in our core values of Character, Responsibility and Commitment by prioritizing the health and safety of our workforce, their families and the communities where we live and work.
The dedicated men and women in CRC's workforce operate critical and essential infrastructure in the State of California. Californians are focused on progressive policies to reduce income inequality, and our operations provide the careers and products that enable upward economic mobility. CRC provides affordable and reliable oil, natural gas, natural gas liquids like propane, and electricity that Californians
need for stability in the energy supply and to promote our collective public health, safety and welfare. As a 100% California company, we are committed to helping our state and our diverse communities achieve and sustain a vibrant and inclusive future for generations to come.
As California's largest oil and natural gas producer, we take our leadership position seriously by operating at the forefront of issues that positively impact quality of life so the state can reliably meet residents' energy consumption needs at a reasonable cost. Our purpose is to affordably and sustainably provide the energy Californians need and support working families in careers that provide upward economic mobility and stability. That means we:
Safeguard people and the environment and promote our diverse communities as our top priorities while operating under the world's most stringent regulations.
Support an "All-of-the-Above" approach to provide energy that is affordable, reliable and resilient for our local economy and our state.
Share and endorse the state's commitment to conserve our natural resources, protect our environment and mitigate climate change by providing local solutions for our future energy needs.
Serve as an economic engine in California by providing high-wage jobs and economic mobility through a diverse and empowered workforce.
CRC has an unwavering commitment to helping all residents across our operating areas succeed and improve their quality of life. We are delivering on that commitment by producing affordable energy for Californians and providing good-paying,high-quality jobs and a path to the middle class for men and women of all backgrounds.
For CRC, being socially conscious means recognizing the needs of our diverse communities because if Californians
succeed, CRC succeeds.
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SOCIAL | INVESTING IN OUR WORKFORCE |
INVESTING IN OUR HIGH-QUALITY WORKFORCE
Our combined workforce including the employees and subcontractors of our suppliers and vendors at our plants, fields and rigs achieved a recordable incident rate of 0.34 in 2019, the best ever in the long history of our operations and safer than office-based occupations like radio broadcasters, stockbrokers and insurance adjusters. We join our fellow Californians in placing a premium on safeguards for workers and communities. CRC's workplace is built on an unwavering commitment to promoting health and safety throughout our operations, providing upward economic mobility for employees across the educational spectrum, offering ample career advancement and championing strength through diversity.
At CRC, health and safety lead everything we do. Earlier in this report, we described the actions we have taken to address the COVID-19 pandemic. While the pandemic presents novel challenges, the way we prioritize worker and community health and safety applies to all aspects of our business, our operations, and our community engagement. We work actively to enhance protocols in our operations by setting consistent expectations in job planning and contractor selection, empowering and training our workforce as safety leaders, and supporting them with safe work practices, technology and rigorous maintenance and asset integrity programs. CRC was the first oil and gas company in California's 140-year production history to
enter into a statewide Project Labor
Agreement with the California State Building and Construction Trades Council and its 300 unions to ensure that our integrated infrastructure, including drill sites, pipelines, production facilities and gas processing and power plants, are built and maintained by a highly skilled workforce who consistently focuses on safety and quality. Our dedicated drilling and well servicing crews and our experienced operators, who include highly qualified members of the United Steelworkers, utilize this infrastructure to safely produce the energy and products on which Californians depend every day. Importantly, CRC empowers all employees, suppliers and vendors with Stop Work Authority to cease any activity - without repercussions - to prevent a safety or environmental incident.
CRC'S SAFETY RECORD
Workforce Safety | 2019 | 2018 | 2017 | |
Fatalities - workforce (employees + contractors) | # | 0 | 0 | 0 |
Hours worked - workforce | Hours | 9,337,897 | 10,100,148 | 8,348,295 |
Employee total recordable incident rate | Per 200,000 hours worked | 0.00 | 0.39 | 0.45 |
Contractor total recordable incident rate | Per 200,000 hours worked | 0.52 | 0.56 | 0.72 |
Workforce total recordable incident rate | Per 200,000 hours worked | 0.34 | 0.50 | 0.62 |
Employee lost time incident rate | Per 200,000 hours worked | 0.00 | 0.13 | 0.13 |
Contractor lost time incident rate | Per 200,000 hours worked | 0.13 | 0.17 | 0.19 |
Workforce lost time incident rate | Per 200,000 hours worked | 0.08 | 0.15 | 0.17 |
Our health and safety goal is to sustain our exemplary | basis, including contractors, we had an impressive IIR | ||
performance by reducing recordable injuries and illnesses. | of 0.34, a new company record, and better than safety | ||
Each year, CRC sets a threshold injury and illness incidence | statistics in the insurance and finance sectors according | ||
rate (IIR) as a quantitative metric that directly impacts | to the latest data available from the U.S. Bureau of Labor | ||
incentive compensation and promotes continuous | Statistics. For further comparison, the incident rate of 0.9 | ||
improvement. Creating this culture of accountability has led | for the crude oil and natural gas extraction sector as a whole | ||
to our California workforce achieving a progressive company | is over 2.5 times higher than CRC's IIR, and the rate for all | ||
health and safety record: zero recordable employee | U.S. employers of 3.1 is over nine times higher than CRC's. | ||
workplace injuries or illnesses in 2019. On a combined | |||
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SOCIAL | INVESTING IN OUR WORKFORCE |
CRC TOTAL RECORDABLE INCIDENT RATE | |||
Workers) | 0.70 | ||
0.62 | |||
Rate | |||
0.60 | |||
Incident | 0.50 | 0.50 | |
forAll | |||
0.40 | |||
Hours | 0.34 | ||
0.30 | |||
Recordable | 0.20 | ||
200,000 | |||
Total | 0.10 | ||
(Per | |||
0.00 | |||
2017 | 2018 | 2019 |
CRC TOTAL LOST TIME INCIDENT RATE | ||||
0.18 | 0.17 | |||
Rate | 0.16 | 0.15 | ||
0.14 | ||||
Hours) | ||||
Incident | 0.12 | |||
200,000 | 0.10 | |||
Time | 0.08 | |||
0.08 | ||||
Lost | ||||
0.06 | ||||
(Per | ||||
Total | 0.04 | |||
0.02 | ||||
0.00 | ||||
2017 | 2018 | 2019 |
In addition, our employees received 24 National Safety Achievement Awards from the National Safety Council recognizing CRC's exceptional 2019 safety performance in each of our operating areas and companywide. We have received National Safety Council awards every year since our formation in 2014, including 22 safety awards for our 2018 performance.
CRC is proud to be part of an industry that provides high wages and benefits for working families regardless of educational background and reflects the ethnic diversity of the state that is unmatched by other industries. California's oil and natural gas industry supports more than 365,000 jobs throughout the state with an average annual wage of over $80,000 according to a recent study by the Los Angeles Economic Development Corporation. This wage level is
more than 20% above the average California wage and provides a path to the middle class for a diverse workforce with a range of industrial jobs that do not require a college degree, as well as a fresh start for those who need a second chance. CRC employees receive a range of benefits that promote financial stability and healthy lifestyles, including health, life and disability insurance plans, 401(k) savings with CRC matching and retirement contributions, employee assistance programs and wellness benefits, among others, and many of the contractors we work with provide similar benefits. Our industry also reflects California's diversity with a labor force that is 28% Latino, 10% Asian and 6% Black. At a time when poverty and income inequality are growing problems in California, CRC is proud to provide careers that provide financial stability to live in the Golden State.
CRC'S DIVERSITY | ||||
Workforce Diversity | 2019 | 2018 | 2017 | |
Number of permanent employees | # | 1,251 | 1,502 | 1,448 |
Part-time employees | % | 0.24% | 0.00% | 0.00% |
Full-time employees | % | 99.76% | 100.00% | 100.00% |
Female employees | % | 20.46% | 19.57% | 19.20% |
Ethnically diverse employees | % | 35.49% | 33.75% | 32.73% |
Female senior managers | % | 24.14% | 17.86% | 18.18% |
Ethnically diverse senior managers | % | 24.14% | 14.29% | 15.15% |
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SOCIAL | INVESTING IN OUR WORKFORCE |
CRC ETHNIC DIVERSITY
40%
35%
30%
35.5%
25% | 24.1% | ||
20%
15%
10%
5%
0%
2017 | 2018 | 2019 | |
Ethnically diverse employees | Ethnically diverse senior managers | ||
CRC GENDER DIVERSITY
25%
24%
23%
22%
24.1%
21% | |
20.5% | |
20% | |
19%
18%
17%
16%
15%
2017 | 2018 | 2019 | |||
Female employees | Female senior managers | ||||
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SOCIAL | INVESTING IN OUR WORKFORCE |
Employee Training | |
Employee training opportunities are provided to enhance leadership development and expand career | |
opportunities. A copy of CRC policies is provided to all employees, who also undergo mandatory | |
annual training on the policies. CRC's training reinforces our company-wide commitment to operate | |
in accordance with all applicable laws, rules and regulations and to sustain a diverse and empowered | |
workforce comprising our employees and those of our suppliers, vendors and joint ventures. | |
In 2019, CRC employees on average attended almost 50 hours of training and development | |
activities. These activities include, but are not limited to: | |
• Development Initiatives | |
o Future Leaders Development Program with UCLA Anderson School | |
o Intrepid Women's Program - A program of coaching and developing circles for women | |
o Educational Assistance Program | |
o ELEVATE - Manager workshops on communication styles and culture changing | |
behaviors | |
• Employee Resource Groups | |
o WIN - Women's Interest Network | |
o ECN - Early Career Network | |
o VET - Veterans' Interest Network | |
• Formal Training Through our Online Portal | |
CRC also prioritizes empowering employees to be advocates for their communities and public | |
policies that will help Californians thrive. Besides extensive internal training opportunities, CRC | |
invests in partnerships with external groups who provide leadership development opportunities to | |
further hone skills so employees can better engage and collaborate to reach their goals. Since our | |
formation in 2014, over 75 employees have pursued further education with local universities and | |
community leadership training programs, with a focus on promoting diversity and inclusion in our | |
workforce. In 2019 alone, CRC sponsored: | |
• 3 employees to participate in an intensive, months-long leadership training with CORO of | |
Southern California | |
• 2 employees to participate in the Hispanas Organized for Political Equality Leadership | |
Institute | |
• 1 employee who earned an MBA from the USC program for veterans |
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SOCIAL | SUPPLY CHAIN |
OPERATING A TRANSPARENT SUPPLY CHAIN
CRC is fully invested in California's future. CRC operates exclusively in the state. All of our workers, properties, facilities and investments are located in California and all of our production of oil, natural gas, natural gas liquids and electricity comes from California. Working exclusively in the Golden State means that all our operations are subject to California's world-leading safety, labor, human rights and environmental standards. In particular, our operations are governed by comprehensive laws, regulations and company policies that recognize and value the diversity of our workforce, require fair labor standards and protect against forced or compulsory labor, child labor, human trafficking, discrimination and harassment. Similarly, CRC does not have any operations in locations deemed susceptible
to corruption. Although we don't believe that CRC is a manufacturer as defined in the California Transparency in Supply Chains Act of 2010 (SB 657), which requires manufacturers that do business in California to disclose their efforts to eradicate slavery and human trafficking from their supply chains, we endorse the state's efforts to end the scourge of slavery and human trafficking that decimates so many families around the globe who aren't afforded California's legal protections. Sadly, countries that California increasingly depends on for imported oil and for raw materials and component parts used in renewable and alternative energy or battery storage have poor human rights and environmental records, rampant corruption and
a lack of gender equality, political freedom and even basic worker protection. The state can and should do more to uphold Californians' values by ensuring that imported energy and goods being marketed and sold in the Golden State, wherever their origin, are produced under California leading standards.
CRC seeks to build relationships with suppliers and vendors that are committed to compliance with CRC's policies, including those relating to human rights, fair labor standards and ethical business conduct. We expect - and our standard contracts require - suppliers and vendors to operate ethically and to comply with all contract terms, laws and CRC's policies. We have a statewide Project Labor Agreement with the California State Building and Construction Trades Council, which ensures that our construction and maintenance contractors hire a highly qualified California workforce. Our drilling and well servicing is typically performed by dedicated contractor crews based in California whose work on our sites is reviewed or overseen by CRC employees. The equipment and materials we purchase are typically manufactured by specialized companies to detailed engineering specifications. Accordingly, we believe there is no risk of slavery or human trafficking in our supply chain. We nonetheless have a variety of mechanisms in place to assess and reduce risks in our supply chain, including:
CRC'S BUSINESS ETHICS AND CORPORATE POLICIES
CRC has a number of policies and systems in place that are designed to ensure our business practices are consistently effective and highly principled. Our Business Ethics and Corporate Policies underscore our commitment to promoting compliance with all applicable laws, rules and regulations, which include, among others, those:
- prohibiting forced or compulsory labor, child labor, human trafficking, discrimination and harassment
- requiring fair labor standards and equal employment opportunity
- protecting health, safety and the environment
- requiring compliance with antitrust and securities laws
- prohibiting bribery, corruption and conflicts of interest
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SOCIAL | SUPPLY CHAIN |
EXPECTATIONS FOR SUPPLIERS AND VENDORS
ACCOUNTABILITY
VERIFICATION AND SUPPLIER AUDITS
CRC's standard purchasing terms require suppliers to comply with all applicable laws, rules and regulations, which include laws governing human rights, labor and employment, and with CRC's policies. Suppliers and vendors providing goods or services to CRC are provided with a copy of our policies and are required to comply with their terms.
CRC's standard supplier agreements require our suppliers and vendors to commit that they will comply with all applicable laws, rules and regulations, which include laws governing human rights, labor and employment, protection of health, safety and the environment, and ethical business practices. A supplier's or vendor's failure to comply with this provision would constitute a breach of contract and may be subject to appropriate remedies, including termination of the supplier relationship. Employees who fail to comply with the Policies are subject to disciplinary action, up to and including termination of employment.
CRC's standard supplier contracts allow us to conduct compliance audits. We apply a risk-based approach to determine which suppliers are subject to audit by our internal procurement or audit resources. We regularly evaluate our risk profile and adjust the audit requirements to reflect perceived changes in the level of risk. As previously noted, we believe there is no risk of slavery or human trafficking, given that we operate exclusively in California under the state's world-leading standards. California's protection of human rights stands in stark contrast to the major sources of California's imported energy, which routinely rank among the worst countries for human rights, gender equality, worker protection and political freedom.
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SOCIAL | PRIORITIZING COMMUNITY |
STRENGTHENING DIVERSE COMMUNITIES
CRC has a strong dedication to the local communities where we live and work. Our families live here, our children are growing up here and our work is focused exclusively on California. From supporting Science, Technology, Engineering and Mathematics (STEM) education and job training programs to civic empowerment, we are
an active and supportive community partner through impactful corporate and employee matching donations and volunteerism. As a proud California company, CRC is dedicated to ensuring that diverse communities across our state have a vibrant and sustainable future by all measures
- environmental, economic and social.
The Golden State has among the highest energy prices in the U.S. and the highest poverty rate with about 1 in
5 Californians living in or near poverty. 18.2% of African American, 15.9% of Asian American and 12.8% of White households live below the poverty level. The disparity is even more stark in Latinx communities where the poverty rate is 22.9% - nearly double the rate for Whites - with the Latinx median household income about 35% lower than the median household income for all Californians. According to American Community Data from the U.S. Census Bureau, Blacks also face a wide range of institutional obstacles that make earning a steady, livable income, as well as the possibility of escaping poverty, extremely difficult. Black Americans are more than twice as likely as White or Asian Americans to live in poverty. In addition, in California, the opportunity to earn a solid paycheck without a four-year degree is being marginalized, a harsh reality given that less than one-third of California adults hold a bachelor's degree.
In California, being employed does not avoid poverty; the majority of families living in poverty are in the workforce. Seventy-nine percent of poor Californians live in families with at least one working adult, highlighting the gap between having a job and actually earning what it takes to live in
the state. In California, Latinxs make up nearly 40% of our population - that's more than 15 million people - over a quarter of the entire Latinx population in the country. And even though Latinxs have the highest labor participation rate, the community suffers from the highest poverty rate in the state.
That's why CRC has focused our outreach efforts supporting California's diverse communities through varied outreach and engagement that supports upward financial mobility and opportunity. We seek to partner with many non-profit organizations throughout California to help make long-term, positive impacts on working families and businesses across the state.
From 2017 through 2019, CRC provided over $9 million in charitable and community sponsorships to more than 500 organizations. Our charitable contributions support CRC's five community pillars. Further, CRC's workforce once again demonstrated our deep commitment to address community needs, serving nearly 4,300 volunteer hours at more than
220 employee-driven charitable and community events in 2019, in addition to CRC's direct support of more than 250 charitable and community sponsorships.
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URBAN/RURAL | HOUSING | ||
0-19 | 27% |
AGE
POVERTY RATE BY RACE/ETHNICITY
AFRICAN
AMERICAN
ASIAN AMERICAN /PACIFIC ISLANDER
LATINX
WHITE
18.2%
15.9%
22.9%
12.8%
EMPLOYMENT
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SOCIAL | PRIORITIZING COMMUNITY |
Our charitable contributions support CRC's five community pillars.
Some examples of our activity in each area include:
Education and Job Training - CRC champions education programs that enable students of all ages from diverse communities to learn about STEM, skills which are important in California's cutting-edge industries such as oil and natural gas production. We also partner with union apprenticeship programs, universities and non-profits to provide paid internships, scholarships and workforce training, focusing on those from disadvantaged communities.
CRC proudly partners with the California State Building & Construction Trades Council to host a unique field training internship program with the Los Angeles Trade-TechnicalCollege that provides students with real-world job training and a pathway for attaining high-paying jobs in the construction and energy industries. We also support Helmets to Hardhats, a national nonprofit program that provides transitioning military service members with quality careers in the Building and Construction Trades.
CRC is a steadfast supporter of Concerned Citizens of South Central Los Angeles (CCSCLA), a nonprofit whose mission is to work for social change, economic empowerment, environmental justice, social equity, educational advancement, and principled prison reform within the South Central Los Angeles community and beyond. CRC partners with CCSCLA for their economic development and job training program that prepares members of the community for good paying, quality jobs and economic mobility. CRC has hired two CCSCLA program participants in recent years to work as a Production Technician at our THUMS Islands and in Administrative Services in our Long Beach office.
"Through our partnership with California Resources Corporation, we've developed an internship program that guides ethnic minority students in the advertising, marketing and public relations fields within the energy industry. These internships provide students with hands-on communications experience while exposing them to the technology and exploration behind California's energy. The work that CRC performs is very important and it's imperative that we encourage future generations to take an interest in energy. We look forward to continue partnering with CRC in providing these great opportunities for minority college students year-round and give them the experience that will help guide them in their careers."
- Kim L. Hunter, Chairman and CEO, The LAGRANT Foundation
Through CRC's partnership with The LAGRANT Foundation, we developed a paid internship program for college students from multicultural, diverse backgrounds throughout the state.
"After I was hired, I had a lot of people who mentored me and helped me when I had questions. The biggest thing I have learned is how to maneuver through a desktop - my boss Sam encouraged me to take computer classes which CRC paid for so I could develop the skills I needed. I used to be afraid to do tasks on the computer, but now I have the skills I need to do them effectively. When you work for a company like CRC that looks out for you and invests in you, you feel inspired to learn more and believe in yourself. I thank CRC and Concerned Citizens for helping me get to where I am today."
- Crystal West, Administrative Clerk, Long Beach Operations.
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SOCIAL | PRIORITIZING COMMUNITY |
Public Health and Safety - CRC champions and develops programs that promote community health, safety and well-being, focusing on children's health and wellness in underprivileged communities and our dedicated public safety servants who keep California's residents safe.
CRC partners with the Herman Ostrow School of Dentistry of USC, Los Angeles Unified School District (LAUSD), United Teachers Los Angeles (UTLA) and DentalCare for Learning to host Free Mobile Dental Clinics that provide much-needed dental services to low-income middle school and elementary students in Taft and Bakersfield in Kern County and South Los Angeles. At these annual dental clinics, USC student dentists conduct screenings, cleanings and critical dental services for students and their families in specially equipped, state-of-the-art dental vans. To date, this partnership has provided more than 7,000 free dental procedures for students and family members throughout California setting up students for success, in the classroom and beyond.
CRC has a long-standing relationship with the American Red Cross and their chapters throughout the state, such as in the Southern California and Central California regions. For example, we joined forces with the Long Beach, Rio Hondo and South Bay chapter in support of the annual "Sound the Alarm - Save a Life" program. Aimed at reducing the number of deaths from home fires by installing smoke detectors in the homes of local
residents, the program offers lifesaving services to at-risk communities, helping protect families through home fire safety education and preparedness. CRC employees joined more than 400 volunteers visiting 300+ homes in the greater Long Beach area for smoke detector installations. More than 800 fire alarms were installed throughout the community, helping to protect nearly 1,200 local residents with effective early warning devices in the case of a fire in their home.
CRC proudly supports the Yuba-Sutter Children's Type 1 Diabetes Support Group & Resource Center's "Bike Around the Buttes" charity ride in Sutter, California. During this worthwhile and fun-filledevent, participants embark on a 20- or 40-miletrek to help raise funds for the Center, which provides resources for children who have been diagnosed with the disease and their families.
"The Yuba-Sutter Diabetes Support & Resource Center is grateful for California's Resource Corporation's continual support over the years. Supporting our efforts to help children and adults with the chaos at initial diagnosis in crucial. Emotional well-being, staying healthy, education, and knowing others that understand is all part of the equation. Without CRC, we couldn't accomplish our mission statement or goals! Thank you for always being there for our citizens who live with diabetes in our community!"
- Ouida Wakefield - Executive Director/Founder,
Yuba-Sutter Children's Type 1 Diabetes Support Group & Resource Center
"Commitment, inspiration and motivation describe my workday as a Lease Operator at CRC's Pier J in Long Beach. My group is strong and close knit and we are in constant daily communication with each other to achieve controlled results for all of our operations systems. We encourage each other to succeed in our daily activities. In my 28 years in the oil and gas industry I've see a lot of change, and through it all we remain focused on safety, efficiency and protecting the environment. I have taken these values to heart and to my home and family where we live it every day."
- Steve Mock, Pier J Production Tech., Long Beach Operations
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SOCIAL | PRIORITIZING COMMUNITY |
Military and Veterans - CRC recognition of their service to our
is a strong supporter of active military and veterans organizations throughout the state in country and as valued members of our workforce.
CRC supports the American Red Cross, Central Region's "Operation: Ride for the Red" program which benefits the Services to Armed Forces (SAF) program in Ventura County. Serving more than 1 million military families in the years since the September 11th attacks, the SAF program helps members of the military, veterans and their families prepare for, cope with and respond to the challenges of military service. The Red Cross is the only military services organization that supports military families in this manner
- from the day they enlist through their time as a veteran.
CRC donated a Chevy Silverado truck to the Gold Coast Veterans Foundation in Ventura County and sponsored their annual fundraiser. The truck will provide transportation for the Foundation's Mobile Veteran Outreach program that delivers a range of services to at-risk veterans in difficult-to-access locations such as homeless encampments and freeway overpasses.
"CRC is a valued partner whose continued title sponsorship has allowed this event to grow stronger every year, while bringing increased attention to the life-changing SAF program. We are proud to say that 100% of CRC's donation, as well as the profits from this worth-while and impactful charity ride, go directly to sustain the SAF program in their mission to uplift our active military, veterans and their families who sacrifice so much for our country."
- Diane Krehbiel-Delson,Co-founder, Operation: Ride for the Red
CRC veterans and employees participate in serving breakfast to the Veterans of Honor Flight Kern County, a non-profit with a mission to honor and send America's veterans to Washington D.C. to see the memorials built in their honor for their service to our country - at no cost to the veteran. CRC employees also serve meals to veterans and their families at the U.S. Department of Veterans Affairs Center in Bakersfield, which provides critical outreach, counseling, and benefits assistance for veterans in the area. In Long Beach, CRC hosts a charity fundraiser for the local branch of Fisher House, a foundation that builds comfort homes where military and veterans families can stay free of charge when their family member is in the hospital.
"As a war veteran, I came out of the military with specific skills that did not apply to many jobs, so I was hesitant about my career choices because I wasn't sure where my skills would be seen as valuable. As a single mom, I was looking for the best possible career path to provide for my son and daughter. The oil and natural gas industry was the perfect path for me as I was able to start right away and receive on-the-job training. Working for CRC has allowed me to become a homeowner, earn a bachelor's degree, and be a role model for my kids."
- Maira Castro, Well Analyst, Ventura Operations
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SOCIAL | PRIORITIZING COMMUNITY |
Environmental Stewardship and Water Conservation - CRC's workforce values the sensitive ecosystems of the Golden State and enthusiastically contributes to solving challenges. In addition to ongoing employee volunteerism, CRC dedicates resources to habitat conservation and biodiversity and partners with water districts and non-profit organizations to help alleviate the impact of California's drought on farmers and rural communities. In fact, one of CRC's 2030 Sustainability Goals is to significantly increase the volume of produced water we reuse, recycle or reclaim by 30 percent against a 2013 baseline.
CRC has served as a net water supplier to agriculture for every year since our formation in 2014. We have invested over $20 million in water treatment and conveyance systems to alleviate drought conditions in the Central Valley by reclaiming our high-quality produced water from Kern Front steamflood operations. In 2019, we delivered over 5.35 billion gallons of reclaimed
water, a company record, to agricultural water districts who blend it with water from their other sources for use in irrigation and groundwater recharge, supporting over 5,000 acres of productive farmland and farmworker jobs in Kern County. For every gallon of fresh water we purchase, we deliver three gallons of reclaimed water.
CRC's operations in Long Beach and Huntington Beach are located in unique coastal ecosystems. Our longstanding habitat conservation programs at the Bolsa Chica Ecological Reserve in the Huntington Beach Field and THUMS Islands in the Wilmington Field are certified by the Wildlife Habitat Council, and we also partner with local environmental organizations, schools and government agencies to preserve and protect these coastal resources. In partnership with the Bolsa Chica Conservancy in 2019, CRC employees, family and friends
volunteered for a 10-acre habitat restoration project at the Harriett M. Wieder Regional Park adjacent to the Bolsa Chica Ecological Reserve to help remove invasive plant species that keep native plants from establishing roots and flourishing. By restoring this upland habitat, we are providing a better connection and buffer for an array of wildlife and local plants to thrive between the Reserve and the Huntington Beach mesa.
"California Resources Corporation has been a huge supporter of the Bolsa Chica Conservancy in helping to develop and inspire our youth and community into the future. The partnership between CRC and the Bolsa Chica Conservancy is vital in maintaining the healthy habitat on the Bolsa Chica Ecological Reserve, while developing the next generation of scientists and community leaders. We thank CRC for their continued support of the Conservancy's Education and Restoration program in helping to advance our mission year after year. "
- Eric Paquette, Operations Manager, Bolsa Chica Conservancy
CRC is a strong partner of the Rancho Ventura Conservation Trust, a nonprofit dedicated to permanently conserving and enhancing the foothills above the City of Ventura by protecting the natural diversity, scenic open space, and agricultural vitality of the ranch and coastal areas. CRC employee volunteers participate in Earth Day activities hosted by the organization, including planting oak woodland trees in Barlow Canyon.
CRC supports the Tree Foundation of Kern County, a community group dedicated to the advancement of a sustainable urban and community forestry plan in Kern County through active tree plantings. In 2019, CRC employees, family members and friends planted trees to enhance the beauty of two local parks in the Lamont area of Kern County. Planted in Bear Mountain Park and Weed Patch Park, the trees will provide plenty of shade for Lamont residents for years to come, while helping to advance sustainable urban and community forestry.
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SOCIAL | PRIORITIZING COMMUNITY |
"I love working for CRC because of the wonderful, intelligent people I get to work alongside every day. The culture of this company amazes me all the time, always seeking innovation and accepting new ways of thinking. This industry is challenging and CRC supports new and better ways to execute our daily tasks. That is what keeps me coming back to work with a smile on my face, the opportunity to be myself and think outside the box on a daily basis."
- Mandy Kroetsch, Surface Manager, Sacramento Operations
Community Empowerment - CRC actively supports a wide range of organizations and community programs that strengthen the vibrant neighborhoods that represent California's diversity and address the local priorities that make each distinct. CRC prioritizes providing empowerment, advocacy and leadership tools and resources to communities in need to expand opportunities for an improved and sustainable quality of life.
CRC champions women's advocacy and empowerment by supporting programs that provide specialized career development for female professionals, ranging from our employees to members of diverse communities, and provide educational tools and resources that promote advocacy of women's issues. CRC creates programs in partnership with groups like Hispanas Organized for Political Equality (HOPE) to ensure political and economic parity for Latinas through leadership, advocacy, and education, and the California Latino Leadership Institute to host annual women's empowerment summits in Bakersfield and Fresno for community, business and student leaders.
"California Resources Corporation (CRC) has been a longtime supporter of the work we do at Hispanas Organized for Political Equality (HOPE) to ensure political and economic parity for Latinas. Through our partnership, CRC has helped inform and engage more than 1,400 Latina leaders about the energy challenges California faces in the 21st Century. CRC has supported HOPE in bringing innovative educational programming to women across our state. Together we are working to ensure Latinas are stepping up, leading and representing the voices of their communities on energy issues."
- Helen Iris Torres, Chief Executive Officer, Hispanas Organized for Political Equality
CRC prioritizes the multi-cultural and diverse communities where our employees live and work and supports programming that provides opportunities for civic empowerment. For example, CRC supports the Greater Los Angeles African American Chamber of Commerce's Education Fund which seeks to enhance students' individual and social successes by providing them with supplemental educational enrichment and business networking opportunities, in particular for those from disadvantaged communities. CRC has supported the African American Voter Registration, Education, and Participation project every year since our formation to promote inclusion in the political process. In addition, CRC is an avid supporter of the League of United Latin American Citizens and partners with them in Kern County and Ventura County to advance the economic prosperity, educational achievement, health, and civic engagement of Latino communities.
"I'm a man of color working in an industry that's very diverse, and actually provides a lot of opportunities to people who typically don't get opportunities in our modern society. I can say it means a ton to me. Providing energy for people is what allows us to live the lives that we live. But, in addition, you're able to make a really good living. You can provide for your family, buy a home, send your kids to school, do all those things that are the American Dream-but we make that accessible to anyone, not just the people who went to the elite Ivy League schools."
- Michael Williams, Lead Mechanical Integrity Engineer, Southern California Operations
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 56 |
SOCIAL | PRIORITIZING COMMUNITY |
EMPOWERING CALIFORNIA COMMUNITY STAKEHOLDERS
At CRC, we are dedicated to informing all our stakeholders about balanced energy policies that deliver a better quality of life. Engaging with key stakeholders and listening to their feedback underlies CRC's commitment to making a positive difference in our diverse communities while we produce local, affordable, safe, and reliable energy under the world's most stringent standards.
Employee Engagement
We champion employee engagement at CRC and lead our industry in strengthening community relations and stakeholder engagement in ways that reflect our values of Character, Responsibility and Commitment. Employees are the heart and soul of the company and they are CRC's best representatives.
In 2019, we launched the CRC Ambassador Program to provide a platform for employees to be able to express their support for the energy industry and their unique perspective as valuable members of the energy community. Comprised of employees throughout the state, Ambassadors are equipped with training and educational resources so
they can have science-based dialogue about the benefits of energy careers, the impacts of energy policy and the importance we place on health, safety and the environment. Through the Ambassador Program, employees have the opportunity to participate in events, public hearings and advocacy initiatives that help CRC and our communities achieve our shared economic and environmental goals.
Energy Literacy Coalitions
In 2019, CRC launched two energy literacy coalitions for community leaders. Through these coalitions, we hold stakeholder listening meetings in communities across the state to discuss the importance of energy literacy and advocacy on energy policies. We also maintain a robust communication program to provide community leaders and organizations with information and access to educational energy and policy resources, including PoweringCalifornia.com.
In the Los Angeles Basin, we launched the Powering California Network (PCN) coalition comprising residents across Southern California. In the Central Valley region, we launched the Central Valley Energy Coalition (CVEC) representing residents in Kern, Kings and San Joaquin counties.
www.poweringcalifornianetwork.com
www.energyforourvalley.com
COMMITMENT TO OUR NEIGHBORS
In addition to our dedication to strengthening diverse communities across our state to promote a vibrant and sustainable future, CRC also takes extra precautions to ensure we are a good neighbor. Operators at all CRC locations provide the 24-hour phone number to their local operating office so that any questions or concerns can be reported. We also have a statewide CRC Dispatch telephone number for 24-hour reporting: 844-4CALRES.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 57 |
SOCIAL | PRIORITIZING COMMUNITY |
POWERING CALIFORNIA
Reaching beyond our local energy production and the economic, social and environmental benefits we provide, California is our home. Our core values of Character, Responsibility and Commitment direct how we conduct our business, contribute to our communities, support local economies, and interact daily with our stakeholders.
As the world's fifth-largest economy, California needs a safe and reliable supply of affordable energy to fuel our daily lives. Careers in our industry provide financial security for our workforce and their families. And, producing needed energy affordably under the world's most stringent safety, labor, human rights and environmental protections aligns with Californians' values. It is important for CRC and the oil
and natural gas industry to champion our communities, to help provide upward economic mobility and build bridges that connect our industry to the millions of working families, small business owners, and energy users across California so we can all live the California Dream.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 58 |
SOCIAL | AWARDS AND RECOGNITIONS |
AWARDS AND RECOGNITIONS
CRC received 31 awards and recognitions for our 2019 performance in operational excellence, dedication to health, safety and environmental stewardship, and community outreach efforts. Here are some highlights:
- Received 24 National Safety Council awards for our health and safety performance in 2019 across our operations, which was better than non-industrial occupations like radio broadcasters
- Received an "A-" from CDP, scoring at CDP's Leadership Level and earning the highest ranking among all U.S. oil and natural gas companies along with one U.S.-based E&P company with global operations
- Recognized as the 2019 Company of the Year by the Greater Los Angeles African American Chamber of Commerce
- Received the Centro CHA Nuestra Imagen Award for Excellence in Corporate Responsibility
- Named the Corporate Citizen of the Year Award by the Shafter Chamber of Commerce in Kern County
- Inducted into the 2019 San Fernando Valley Business Hall of Fame by the Valley Industry and Commerce Association
- Maintained certified conservation programs at Elk Hills, THUMS and Huntington Beach from the Wildlife Habitat Council
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT
Governance
Our Board of Directors Sustainability Committee
ESG Alignment with Compensation Regulatory Compliance
GOVERNANCE | BOARD OF DIRECTORS | ||||||||||||||||||
2019 Board of Directors | 90% | +90 | 80% | ||||||||||||||||
CRC's senior management | CRC's Board, which exhibits | robust compliance program, | |||||||||||||||||
strong independence and | promotion of diversity of thought, | ||||||||||||||||||
team and Board of Directors | a breadth of managerial, | and alignment with the evolving | |||||||||||||||||
are committed to effective and | operational, financial, and | demands of our business. In | |||||||||||||||||
ethical corporate governance | HSE expertise, includes eight | addition to internal reviews, | |||||||||||||||||
as well as CRC's values of | independent directors. The | the Board frequently receives | |||||||||||||||||
Character, Responsibility | Board and its committees | company-wide employee | |||||||||||||||||
and Commitment, which we | regularly review the Company's | feedback that aids in providing | |||||||||||||||||
governance practices that | insight into the company's | ||||||||||||||||||
believe sustain and enhance | |||||||||||||||||||
foster a proactive safety culture, | culture, managerial effectiveness | ||||||||||||||||||
stakeholder value. | |||||||||||||||||||
ethical business conduct, a | and diversity. | ||||||||||||||||||
10 | |||||||||||||||||||
INDEPENDENCE | GENDER | AGE | |||||||||||||||||
10% | 20% | 10% | |||||||||||||||||
40% | 50% | ||||||||||||||||||
80 | +2050 | 40+10 | |||||||||||||||||
independent | 50s | ||||||||||||||||||
male | |||||||||||||||||||
non-independent | female | 60s | |||||||||||||||||
70s | |||||||||||||||||||
William E. Albrecht | Justin A. Gannon | Harry T. McMahon | Richard W. Moncrief |
Chairman | Chairman of the Audit | Mem. of the Committee | Chairman of the Sustainability |
Director since: 2014 | Committee and mem. of the | Memberships | com and mem. of the Audit |
Compensation committee | Director since: 2017 | committee | |
Director since: 2014 | Director since: 2014 |
Harold M. Korell
Mem. of the Nominating, Governance and Sustainability committees
Lead Independent Director Director since: 2014
Avedick B. Poladian | Anita M. Powers | Laurie A. Siegel | Robert V. Sinnott |
Mem. of the Nominating, | Mem. of the Sustainability | Mem. of the Compensation | Chairman of the Nominating |
Governance and | committee | and Audit committees | and Governance committees |
Compensation committees | Director since: 2017 | Director since: 2018 | Director since: 2014 |
Director since: 2014 |
Todd A. Stevens President and CEO Director since: 2014
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 61 |
GOVERNANCE | BOARD OF DIRECTORS |
Experienced Board with Multiple Skills and Qualifications
CEO Experience | • | • | • | • | 4 of 10 | ||||||||||
Corporate Governance Expertise | • | • | • | • | • | • | • | 7 of 10 | |||||||
Engineering/Geological Background | • | • | • | • | • | 5 of 10 | |||||||||
Financial/Capital Markets Expertise | • | • | • | • | • | 5 of 10 | |||||||||
Oil and Gas Industry Experience | • | • | • | • | • | • | • | 7 of 10 | |||||||
Risk Management Expertise | • | • | • | • | • | 5 of 10 | |||||||||
Ethical Business Conduct
The Company's comprehensive business and ethical conduct policies are available in our Governance section on CRC.com. These policies apply to all directors, officers and employees, each of whom personally commits to following our code and our corporate policies, as well as to suppliers and vendors working in our operations. Our position is that no business goal is worth our employees compromising their integrity or our shared values.
Character
- Be honest, transparent and fair in all business activities and relationships.
- Do not try to accomplish indirectly what is prohibited directly.
- Avoid all conflicts of interest between work and personal affairs.
Responsibility
- Always obey the laws, rules and regulations that govern our business conduct regardless of potentially conflicting business considerations.
- Intervene if you see a potentially unsafe act or condition. You have the authority and the responsibility to stop any work or action to prevent an accident or environmental incident.
- Protect our communities, co-workers, assets and the environment.
- Obtain appropriate authority to use our assets for Company business.
- Accurately represent your authority within the Company and your authority to speak for us.
Commitment
- Help create an environment where everyone feels accepted and safe to work.
- Live our Code of Ethics every day.
- Engage proactively with our neighbors, regulators and other stakeholders to serve as an active and supportive community partner.
Board Review Process
Our Board believes that a robust annual evaluation process is an important part of its governance practices. For this reason, the Nominating and Governance Committee oversees an annual evaluation of the performance of the Board. The committee distributes written evaluation surveys to each director, and the Chairman of the Board discusses the results of these written surveys with the individual directors. In addition, the Chairman shares the results of the surveys and interviews with the full Board for consideration with respect to director nominees, and Board and committee structure, composition and effectiveness.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 62 |
GOVERNANCE | SUSTAINABILITY COMMITTEE |
Sustainability Committee
The highest responsibility for climate-related issues lies with the Sustainability - Health, Safety, Environment and Community Committee of the Board of Directors. The Sustainability Committee is composed of independent directors of the Board who provide direction and oversight of the company's health, safety and environmental (HSE), sustainability and community outreach policies and programs. The members of the Sustainability Committee and its Chairperson are selected annually by the Board. Board-level oversight has been assigned to the highest level within the organization to ensure that the company decision-makers evaluate and advance business strategies and investments that reflect the importance of climate change to CRC's operations,
California's Global Warming Solutions Act, and CRC's risks and opportunities. For example, applying the state's reserve price for GHG allowances in 2019 ($15.62/MT) to the number of allowances required for compliance, CRC generated $41.5 million to
fund the state's climate and GHG mitigation programs. The Committee reports to the full Board regarding developments on climate-related regulations, policies and projects and recommends Sustainability Metrics to the Compensation Committee and the Board that are used to determine incentive compensation for the management team and all employees, including annual HSE metrics for health and safety, oil spill prevention, and our water conservation ratio reflecting our net water supply to agriculture as
well as annual Sustainability Project Milestones for the company. In 2019, CRC's Sustainability Committee made the substantial decision to approve CRC's Sustainability Project Milestones for 2020 which include:
Carbon: Complete Front-End Engineering Design Study for Elk Hills carbon capture system
Methane: Design statewide methane capture strategy for gas-operated pneumatic valves
Water Recycling: Design and permit Elk Hills water recycling pipeline expansion
Renewables: Integrate renewables into oil and gas operations by adding 10 MW from renewable sources
The Sustainability Committee is responsible for reviewing and discussing the status of HSE, sustainability and community outreach objectives, issues, laws and regulations with management; reviewing the Corporation's policies and programs to ensure compliance with applicable HSE laws and regulations (including those with respect
to GHG emissions and climate change), participating in conservation of natural resources and community engagement; reporting periodically to the Board of Directors with respect to HSE matters, sustainability and community outreach; and acting in such other matters as the Board of Directors may direct. Climate related issues are reviewed by the Sustainability Committee during quarterly meetings with CRC's senior management team. At these meetings, the senior management team, which includes the CEO, presents to the Sustainability Committee key strategies to
address climate-related business risks and opportunities affecting both short term plans (annual sustainability project milestones and budgets and California's 3-yearCap-and- Trade compliance period) and long-term plans (life-of-field planning and implementation, major capital projects such as the CalCapture carbon capture and sequestration project at Elk Hills, acquisitions and divestitures). The Committee and the full Board approve strategies and performance objectives, including those published in CRC's 2030 Sustainability Goals focusing on four critical areas: carbon capture and sequestration, methane emission reduction, renewables integration, and water recycling. Performance is reviewed at each meeting, with metrics reported against objectives on an annual basis that determine incentive compensation for the management team and all employees.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 63 |
GOVERNANCE | ESG ALIGNMENT WITH COMPENSATION |
ESG Alignment with Compensation
HSE and ESG have become an integral part of CRC's compensation policies and are included in management's strategic priorities. For 2019, management was aligned to promote workplace diversity and maintain exemplary health and safety, environmental and sustainability practices and associated community engagement. Over the course of the year, CRC made these accomplishments towards achieving this strategy:
- Achieved record safety performance in our operations with zero recordable employee workplace injuries and received 24 National Safety Council awards. Our 2019 injury and illness incidence rate (IIR) of 0.34 per 200,000 employee and contractor hours set a new CRC record and was 62% better than the crude oil and natural gas extraction sector's average of 0.9 for 2018.
- Attained CDP's highest 2019 climate disclosure ranking among all U.S. oil and gas companies with an A-, tying for first with one other U.S.-based E&P.
- Supplied a CRC record 5.35 billion gallons of reclaimed water to agricultural water districts, upholding our important role as a net water supplier in California.
- Achieved our 2019 quantitative health, safety and environmental HSE metrics and continued to advance specific projects that position us to meet our 2030 Sustainability Goals, including surpassing our 2030 methane emission reduction goal and making significant progress on water recycling, renewables integration and carbon capture and sequestration goals.
- Launched CRC's Intrepid Women's Leadership Program to promote women's professional development and leadership. Sponsored a variety of scholarship, internship and training programs and developed targeted programs to diversify and expand our current workforce and future candidates, including students from disadvantaged communities.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 64 |
GOVERNANCE | ESG ALIGNMENT WITH COMPENSATION |
In addition to these achievements, CRC has set performance measures based on IIR, spill prevention rate, net water supplied to agriculture and sustainability project milestones for 2020 which collectively account for 10% of performance-based compensation for management and our entire workforce. This action aligns compensation practices with our annual and 2030 Sustainability Goals.
Also in 2019, the Board updated the name and scope of the Sustainability Committee to underscore our commitments to serve as a responsible steward of California's natural resources, to integrate sustainability, HSE and community engagement into our life-of-field planning, and to advance California's long-term goals. Importantly, by helping to safely and responsibly increase local production of oil, natural gas and electricity, we also:
Sustain careers for working Californians from diverse backgrounds, including union workers who build and maintain our facilities;
Generate government revenues that fund essential public services;
Make our energy supply more secure, affordable and reliable for Californians;
Reduce reliance on energy imports from distant states and across the globe that do not apply California's safety, labor, human rights or environmental standards; and
Strengthen our economy and society by making California more resilient and self-sufficient.
We view our workforce as our most important asset and the Board provides oversight over significant aspects of our human capital. Management provides regular updates to and receives guidance from the Board with respect to employee engagement, diversity and career development initiatives.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT
GOVERNANCE | REGULATORY COMPLIANCE |
Regulatory Compliance and Participation in Development of Legislation and Regulation
CRC is an active and constructive participant in California's development of legislation, regulation and energy policy, often in conjunction with trade associations and coalitions
of stakeholders from the business, agricultural, labor and non-profit sectors. We also inform our community coalitions, our CRC Ambassadors and our workforce generally about pending legislation and regulations. Our operations are governed by
tens of thousands of regulatory and permit requirements, and we have
a demonstrated commitment to regulatory compliance. As regulations are proposed or implemented, we offer constructive suggestions on how to meet the objectives in the most efficient manner possible.
During 2019, we reviewed energy- related regulatory proposals, planning documents and similar matters by, and legislative bills affecting, state agencies including CARB and certain regional Air Quality Management
or Air Pollution Control Districts,
the California Energy Commission, California Department of Fish and Wildlife, CalGEM, the Office of the State Fire Marshal, the California Public Utilities Commission, the State Water Board and certain Regional Water Boards. We also reviewed the local land use, oil and gas, climate action and sustainability planning documents, ordinances and associated environmental analyses in various cities and counties where we operate.
CRC's contact with government representatives is subject to applicable federal, state and local laws and company policies administered by the Vice President of Government Affairs.
Political Contributions
CRC contributes to state and local candidates and political organizations that we believe share our interest in promoting a self-sufficient, sustainable society with greater economic and energy equality for California's diverse communities.
During 2019, we made less than $1.2 million in political contributions to committees for state and local candidates, ballot measure or issues.
Such contributions are subject to applicable federal, state and local laws, as well as company policies administered by the Vice President of Government Affairs. Specific information on campaign finance and lobbying activities is available through the California Secretary of State's website at www.sos.ca.gov/campaign-lobbying. CRC does not have a federal or state political action committee.
Memberships in Associations, and Statewide or National Advocacy Organizations
In 2019, CRC was a member of the following statewide California or national trade associations and advocacy organizations:
- California Business Roundtable
- California Chamber of Commerce
- California Independent Petroleum Association
- California Manufacturers and Technology Association
- California Natural Gas Producers Association
- California Taxpayers Association
- Independent Petroleum Association of America
- National Safety Council
- The Environmental Partnership
- U.S. Chamber of Commerce
- Western States Petroleum Association
- Wildlife Habitat Council
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 66 |
Closing Remarks
About this Report Assurances Additional Resources
Performance Data Tables SASB Index
GRI Index
Risk Management Process Water Definition Applied by CRC Forward Looking Statements
CLOSING REMARKS ABOUT THIS REPORT | ASSURANCES
Closing Remarks
We are pleased with the progress that we made over 2019 and the past five years. Our environmental stewardship, company culture, values of Character, Responsibility and Commitment and community outreach efforts have led us to deliver solutions that help to meet the needs of Californians in the communities where we live and work.
As we move forward and get past these unprecedented times, we will continue to develop and maintain our commitment to sustainability practices, focus on health and safety, environmental stewardship, our 2030 Goals, community outreach and diversifying our workforce. CRC will move forward and pursue Environmental, Social and Governance attributes that align well with the State of California, our workforce, community leaders and investors, and we look forward to providing future updates as we make progress on these initiatives.
About this Report
This report primarily covers the period of January 1, and 2019 to December 31, 2019. This report reflects the guidelines of the Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI). For 2019, we have provided additional disclosures and metrics based on these guidelines, as well as indexed our disclosures to both the SASB and GRI guidelines. In conjunction with the rest of our corporate sustainability disclosures, this report is further enhanced by aligning with the four core elements of the Task Force on Climate-related Financial Disclosures' (TCFD) framework: Governance, Strategy, Risk Management, and Metrics and Targets. The purpose is to detail the company's Board and managerial oversight of climate-related risks and opportunities, demonstrate our present and long-term resilience to these risks, strategic capitalization of opportunities, and which business objectives contribute to achieving global and state environmental goals. We also highlight current processes and procedures in managing these risks and the metrics and targets we utilize to mitigate risk, integrate in life-of-field planning, and evaluate corporate performance.
The conduct and results of our activities, including the development, implementation or continuation of any program, policy or initiative discussed or forecasted in this report, may differ materially in the future. As with any projections or estimates, actual results or numbers may vary, sometimes significantly. Many of the standards and metrics used in preparing this report continue to evolve and are based on management assumptions believed to be reasonable at the time of preparation. Such assumptions, however, are subject to change by management due to new information or changes in financial position, liquidity, legal requirements and business strategy.
Assurances
This report includes estimates and measured data compiled by the company, as well as data provided by third-party sources. The quality of the company data in this report is
a high priority at CRC. We have systems in place to review our data quality, including the methodology, bases and assumptions underlying our data collection and estimates, and we believe those are reasonable, representative and have been applied in good faith. We also believe third-party statements we cite are accurate but have not independently verified them. This report has been reviewed by our sustainability team and executive management. We have not had this report assured by any external party, although GHG emissions reports undergo third-party verification by independent, state-approved experts.
Additional Resources
Business Ethics and Corporate Policies
CRC Sustainability
CRC Community Outreach
CRC Governance
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 68 |
ADDITIONAL RESOURCES | PERFORMANCE DATA TABLES |
2019 Sustainability Report Performance Summary
These tables contain a subset of our publicly reported performance data. Our annual report, U.S. Securities and Exchange Commission (SEC) Form 10-K filing and proxy statement, which can be found at investors.crc.com, provide more detail on our financial and governance information.
For footnotes on 2019 Sustainability Report Performance Summary see page 82.
UNITS | 2019 | 2018 | 2017 | Footnote* | |
Exploration and Production | |||||
Total net hydrocarbons produced | Thousand BOE/D | 128 | 132 | 129 | |
Total gross hydrocarbons produced | Thousand BOE/D | 144 | 152 | 163 | |
Proved reserves (total) | Million BOE | 644 | 712 | 618 | |
Liquids (crude oil, condensate & NGLs) | % | 83% | 83% | 81% | |
Natural Gas | % | 17% | 17% | 19% | |
Reserve life | Years | 14 | 15 | 13 | |
Organic reserve replacement ratio | % | 111% | 127% | 119% | (g) |
Workforce Diversity | |||||
Number of permanent employees | # | 1,251 | 1,502 | 1,448 | |
Part-time employees | % | 0.24% | 0.00% | 0.00% | |
Full-time employees | % | 99.76% | 100.00% | 100.00% | |
Female employees | % | 20.46% | 19.57% | 19.20% | |
Ethnically diverse employees | % | 35.49% | 33.75% | 32.73% | |
Female senior managers | % | 24.14% | 17.86% | 18.18% | |
Ethnically diverse senior managers | % | 24.14% | 14.29% | 15.15% | |
Workforce Safety | |||||
Fatalities - workforce (employees + contractors) | # | 0 | 0 | 0 | |
Hours worked - workforce | Hours | 9,337,897 | 10,100,148 | 8,348,295 | |
Employee total recordable incident rate | Per 200,000 hours worked | 0.00 | 0.39 | 0.45 | |
Contractor total recordable incident rate | Per 200,000 hours worked | 0.52 | 0.56 | 0.72 | |
Workforce total recordable incident rate | Per 200,000 hours worked | 0.34 | 0.50 | 0.62 | |
Employee lost time incident rate | Per 200,000 hours worked | 0.00 | 0.13 | 0.13 | |
Contractor lost time incident rate | Per 200,000 hours worked | 0.13 | 0.17 | 0.19 | |
Workforce lost time incident rate | Per 200,000 hours worked | 0.08 | 0.15 | 0.17 | |
Social Investment | |||||
Total social investment | $ Million | $4.3 | $3.1 | $1.7 | |
Civic Empowerment | % | 35% | 30% | 43% | |
Public Health, Safety & Environmental | % | 18% | 24% | 18% | |
Stewardship | |||||
Education and Job Training | % | 13% | 17% | 27% | |
Military and Veterans Recognition | % | 35% | 29% | 11% | |
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 69 |
ADDITIONAL RESOURCES | PERFORMANCE DATA TABLES |
UNITS | 2019 | 2018 | 2017 | Footnote* | |
2019 Board of Directors | |||||
Number of Independent Directors | # | 9 | 8 | 8 | |
Percent Independent | % | 90% | 80% | 80% | |
Independent Chair | Y/N | Y | N | N | |
Number of Female Directors | # | 2 | 1 | 1 | |
Percent Female Directors | % | 20% | 10% | 10% | |
Annual Election of all Directors | Y/N | Y | Y | Y | |
Annual Board performance reviews | Y/N | Y | Y | Y | |
Compensation | |||||
Total compensation of median employee (excl.CEO) | $ | $154,051 | $145,578 | $142,136 | |
Percent of CEO annual incentive compensation | % | 10% | 10% | 5% | |
related to HSE targets | |||||
Annual advisory say on pay support | % | 97% | 97% | 85% | |
Greenhouse Gas Emissions | |||||
Percent of production subject to carbon tax | % | 100% | 100% | 96% | |
Operated upstream direct emissions by source | Million tonnes CO2e | 1.2 | 1.5 | 1.5 | (a) |
CO2 | Million tonnes CO2e | 1.1 | 1.4 | 1.4 | (a) |
CH₄ | Thousand tonnes CO2e | 99.1 | 98.0 | 165.7 | (a) |
N2O | Thousand tonnes CO2e | 0.9 | 1.1 | 0.8 | (a) |
Operated upstream & midstream direct | (a), (b) | ||||
emissions by source | |||||
Flaring/venting | % | 5.4% | 5.5% | 5.1% | (a), (b) |
Fuel combustion | % | 94.3% | 94.3% | 93.0% | (a), (b) |
Other | % | 0.3% | 0.2% | 1.9% | (a), (b) |
Operated midstream emissions | Million tonnes CO2e | 2.0 | 2.0 | 2.1 | (b) |
gas processing + elec production | |||||
CO2 | Million tonnes CO2e | 2.0 | 2.0 | 2.0 | (b) |
CH₄ | Thousand tonnes CO2e | 7.5 | 12.9 | 4.9 | (b) |
N2O | Thousand tonnes CO2e | 1.0 | 0.9 | 1.1 | (b) |
Upstream greenhouse gas emission intensity | Tonnes CO2e/thousand BOE | 22.2 | 26.5 | 25.9 | (a) |
Total GHG emissions from upstream and | Million tonnes CO2e | 3.2 | 3.5 | 3.6 | (a), (b) |
midstream operations | |||||
Volume of flared and vented hydrocarbons | MMSCF | 1,219.4 | 1,519.5 | 1,280.7 | |
Flaring intensity | SCF/BOE | 23.2 | 27.4 | 21.5 | |
Upstream Energy Intensity | |||||
Production energy intensity | Gigajoules/BOE | 0.58 | 0.67 | 0.62 | (c) |
Energy extracted (GJ) per energy used (GJ) | Unitless | 10.5 | 9.2 | 9.9 | (c) |
For footnotes on 2019 Sustainability Report Performance Summary see page 82.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 70 |
ADDITIONAL RESOURCES | PERFORMANCE DATA TABLES |
UNITS | 2019 | 2018 | 2017 | Footnote* | |
Upstream Energy Use | |||||
Operated direct energy use for oil and gas | Thousand gigajoules | 30,479 | 36,948 | 36,768 | (c) |
production | |||||
Operated indirect energy use (electricty | Thousand gigajoules | 4,270 | 4,144 | 4,216 | (c) |
purchase) | |||||
Renewable energy used | Thousand MWh | 376 | 361 | 339 | (c) |
Net purchased electricity | Thousand MWh | 1,186 | 1,151 | 1,171 | (c) |
Renewable purchased electricity | Thousand MWh | 376 | 361 | 339 | (c) |
Renewable % of purchased electricity | Thousand MWh% | 32% | 31% | 29% | |
Water Conservation | |||||
Fresh water withdrawn from all operations | Gal/BOE | 33.7 | 34.5 | 28.5 | |
Net fresh water used/(supplied) from all operations | Gal/BOE | (68) | (61) | (54) | |
Potable water purchased | Acre-Feet | 481 | 619 | 412 | |
Non-potable water purchased | Acre-Feet | 4,960 | 5,262 | 4,795 | |
Total fresh water purchased | Acre-Feet | 5,441 | 5,881 | 5,207 | |
Reclaimed water delivered to agriculture | Acre-Feet | 16,405 | 16,214 | 15,035 | |
CRC water conservation ratio metric (reclaimed | % | 302% | 276% | 289% | |
water to agriculture over purchased fresh water) | |||||
Produced water reused/recycled/reclaimed | % | 90% | 89% | 89% | |
Spills | |||||
Number of reportable releases | # | 23 | 9 | 17 | (d) |
Net oil released | Barrels | 134 | 192 | 46 | (d) |
Oil spill prevention rate | % | 99.9997% | 99.9996% | 99.9999% | |
Air Emissions | |||||
Sulfur dioxide (SO2) | Tonnes | 30 | 29 | 30 | (a) |
SO2 intensity | Tonnes/Million BOE | 0.57 | 0.52 | 0.50 | (a) |
NOx | Tonnes | 271 | 363 | 428 | (a) |
NOx intensity | Tonnes/Million BOE | 5.16 | 6.54 | 7.19 | (a) |
Volatile organic compounds (VOC) | Tonnes | 399 | 457 | 445 | (a) |
VOC intensity | Tonnes/Million BOE | 7.59 | 8.24 | 7.48 | (a) |
Other Economic Indicators | |||||
Environmental fines and penalties - operated | $ Million | $0.6 | $0.2 | $0.8 | |
Environmental expenditures - remediation | $ Million | $1.3 | $3.2 | $1.0 | |
Environmental expenditures - demolition and | $ Million | $3.5 | $6.4 | $2.3 | |
remediation | |||||
Percent of production and reserves on federal land | % | 4.80% | 4.46% | 4.20% | |
Taxes paid to CA state and local govt. | $ Million | $150 | $166 | $143 | (e) |
Royalties paid to individuals, small businesses | $ Million | $222 | $208 | $127 | (f) |
and non-profits | |||||
For footnotes on 2019 Sustainability Report Performance Summary see page 82.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 71 |
ADDITIONAL RESOURCES | SASB INDEX |
SASB Index
The following index identifies sector-specific Sustainability Accounting Standards Board (SASB) guidelines that we find to be most important and relevant to our stakeholders and where those items are disclosed:
Category | Code | Metric | Location/Link or Disclosure |
Greenhouse Gas Emissions | |||
Gross global Scope 1 emissions, percentage | 2019 Sustainability Report (SR) pages | ||
EM-EP-110a.1 | methane, percentage covered under emis- | ||
70-71 | |||
sions-limiting regulations | |||
Amount of gross global Scope 1 emissions | |||
EM-EP-110a.2 | from: (1) flared hydrocarbons, (2) other | 2019 SR pages 70-71 | |
combustion, (3) process emissions, (4) other | |||
vented emissions, and (5) fugitive emissions | |||
Discussion of long-term and short-term strat- | |||
EM-EP-110a.3 | egy or plan to manage Scope 1 emissions, | 2019 SR pages 17-18,21-22,32-34 | |
emissions reduction targets, and an analysis | |||
of performance against those targets | |||
Air Quality | |||
Air emissions of the following pollutants: (1) | |||
EM-EP-120a.1 | NOx (excluding N2O), (2) SOx, (3) volatile or- | 2019 SR page 33, 71 | |
ganic compounds (VOCs), and (4) particulate | |||
matter (PM10) | |||
Water Management | |||
(1) Total fresh water withdrawn, (2) total | |||
EM-EP-140a.1 | fresh water consumed, percentage of each in | 2019 SR pages 28-30, 71 | |
regions with High or Extremely High Baseline | |||
Water Stress | |||
Volume of produced water and flowback | |||
EM-EP-140a.2 | generated; percentage (1) discharged, (2) | 2019 SR pages 28-30, 71 | |
injected, (3) recycled; hydrocarbon content in | |||
discharged water | |||
Percentage of hydraulically fractured wells for | |||
EM-EP-140a.3 | which there is public disclosure of all fractur- | Reported to CalGEM | |
ing fluid chemicals used | |||
Biodiversity Impacts | |||
EM-EP-160a.1 | Description of environmental management | 2019 SR pages 27-28 | |
policies and practices for active sites | |||
Number and aggregate volume of hydrocar- | |||
EM-EP-160a.2 | bon spills, volume in Arctic, volume impacting | 2019 SR page 31, 71 | |
shorelines with ESI rankings 8-10, and | |||
volume recovered | |||
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 72 |
ADDITIONAL RESOURCES | SASB INDEX |
Category | Code | Metric | Location/Link or Disclosure |
Security, Human Rights | |||
& Rights of Indigenous | |||
Peoples | |||
EM-EP-210a.1 | Percentage of (1) proved and (2) probable | 0% | |
reserves in or near areas of conflict | |||
EM-EP-210a.2 | Percentage of (1) proved and (2) probable | 0% | |
reserves in or near indigenous land | |||
Community Relations | |||
Discussion of process to manage risks and | |||
EM-EP-210b.1 | opportunities associated with community | 2019 SR page 17-19, 43, 53, 79-81 | |
rights and interests | |||
EM-EP-210b.2 | Number and duration of non-technical delays | 0 | |
Workforce Health & Safety | |||
(1) Total recordable incident rate (TRIR), (2) | |||
fatality rate, (3) near miss frequency rate | |||
EM-EP-320a.1 | (NMFR), and (4) average hours of health, safe- | 2019 SR pages 43-45,48-49, 69 | |
ty, and emergency response training for (a) | |||
full-time employees, (b) contract employees, | |||
and (c) short-service employees | |||
Discussion of management systems used to | |||
EM-EP-320a.2 | integrate a culture of safety throughout the | 2019 SR pages 43-45,48-49 | |
exploration and production lifecycle | |||
Business Ethics & Trans- | |||
parency | |||
Percentage of (1) proved and (2) probable | |||
EM-EP-510a.1 | reserves in countries that have the 20 lowest | 0% | |
rankings in Transparency International's | |||
Corruption Perception Index | |||
Description of the management system for | |||
EM-EP-510a.2 | prevention of corruption and bribery through- | 2019 SR pages 48-49 | |
out the value chain | |||
Activity Metrics | |||
EM-EP-000.A | Production of: (1) oil, (2) natural gas, (3) | Annual Report page 56 | |
synthetic oil, and (4) synthetic gas | |||
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 73 |
ADDITIONAL RESOURCES | GRI INDEX |
GRI Index
The following index identifies Global Reporting Initiative (GRI) Core Option standards that we find to be most important and relevant to all stakeholders and where those items are disclosed:
Indicator | Disclosure | Description | Disclosure Location |
Number | |||
General Disclosure | |||
GRI 102 | 102-1 | Name of the organization | 2019 Sustainability Report (SR) Cover |
GRI 102 | 102-2 | Activities, brands, products and services | Annual Report pages 4-29 |
GRI 102 | 102-3 | Location of headquarters | Annual Report page 1 |
GRI 102 | 102-4 | Location operations | 2019 SR page 3 |
GRI 102 | 102-5 | Ownersip and legal form | Annual Report |
GRI 102 | 102-6 | Markets served | 2019 SR pages 3-4 |
GRI 102 | 102-7 | Scale of the organization | 2019 SR pages 3-4 |
GRI 102 | 102-8 | Information on employees and other workers | 2019 SR page 7, 44-47 |
GRI 102 | 102-9 | Supply Chain | 2019 SR pages 48-49 |
GRI 102 | 102-10 | Significant changes to the organization and its | Annual Report |
supply chain | |||
GRI 102 | 102-11 | Precautionary Principle or approach | 2019 SR pages 18-19,79-81 |
GRI 102 | 102-12 | External initiatives | 2019 SR page 18 |
GRI 102 | 102-13 | Membership of associations | 2019 SR page 66 |
GRI 102 | 102-14 | Statement from senior decision-maker | 2019 SR pages 1-2 |
GRI 102 | 102-15 | Key impacts, risks, and opportunities | 2019 SR pages 79-81;also see Annual |
Report pages 38-51 | |||
GRI 102 | 102-16 | Values, principles, standards, and norms of | 2019 SR page 6; also see Code of Business |
behavior | Conduct and Ethics | ||
GRI 102 | 102-17 | Mechanisms for advice and concerns about | Code of Business Conduct and Ethics |
ethics | |||
GRI 102 | 102-18 | Governance structure | 2019 SR page 61; also see 2020 Proxy |
pages 17-19 | |||
GRI 102 | 102-19 | Delegating Authority | 2019 SR pages 61-63;also see 2020 Proxy |
GRI 102 | 102-20 | Executive-level responsibility for economic, | 2019 SR pages 61-63; also see 2020 Proxy |
environmental, and social topics | page 19 | ||
GRI 102 | 102-21 | Consulting stakeholders on economic, | 2019 SR pages 8-9,61-63; also see 2020 |
environmental, and social topics | Proxy page 23 | ||
GRI 102 | 102-22 | Composition of the highest governance body and | 2020 Proxy pages 17-19 |
its committees | |||
GRI 102 | 102-23 | Chair of the highest governance body | 2019 SR page 61; also see 2020 Proxy |
page 8 | |||
GRI 102 | 102-24 | Nominating and selecting the highest governance | 2020 Proxy pages 15-16 |
body | |||
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 74 |
ADDITIONAL RESOURCES | GRI INDEX |
Indicator | Disclosure | Description | Disclosure Location |
Number | |||
GRI 102 | 102-25 | Conflicts of interest | 2020 Proxy pages 21-22 |
GRI 102 | 102-26 | Role of highest governance body in setting | 2020 Proxy pages 18-20 |
purpose, values, and strategy | |||
GRI 102 | 102-27 | Collective knowledge of highest governance body | 2019 SR page 62; also see 2020 Proxy |
page 7 | |||
GRI 102 | 102-28 | Evaluating the highest governance body's | 2019 SR page 62 |
performance | |||
GRI 102 | 102-29 | Identifying and managing economic, | 2019 SR pages 8-9; also see 2020 Proxy |
environmental, and social impacts | pages 19 -20 | ||
GRI 102 | 102-30 | Effectiveness of risk management processes | 2020 Proxy page 20, 42-43, 55 |
GRI 102 | 102-31 | Review of economic, environmental, and social | 2020 Proxy page 19 |
topics | |||
GRI 102 | 102-32 | Highest governance body's role in sustainability | 2019 SR pages 61-65, 8 |
reporting | |||
GRI 102 | 102-33 | Communicating critical concerns | 2020 Proxy page 21 |
GRI 102 | 102-35 | Remuneration policies | 2020 Proxy pages 26-67 |
GRI 102 | 102-36 | Process for determining remuneration | 2020 Proxy pages 26-67 |
GRI 102 | 102-37 | Stakeholders' involvement in remuneration | 2019 SR page 8-9;also see 2020 Proxy |
page 33 | |||
GRI 102 | 102-38 | Annual total compensation ratio | 2020 Proxy page 63 |
GRI 102 | 102-40 | List of stakeholder groups | 2019 SR pages 8-9 |
GRI 102 | 102-42 | Identifying and selecting stakeholders | 2019 SR pages 8-9 |
GRI 102 | 102-43 | Approach to stakeholder engagement | 2019 SR pages 8-9 |
GRI 102 | 102-44 | Key topics and concerns raised | 2019 SR pages 8-9 |
GRI 102 | 102-45 | Entities included in the consolidated financial | Annual Report page 7-8 |
statements | |||
GRI 102 | 102-46 | Defining report content and topic Boundaries | 2019 SR page 8, 68 |
GRI 102 | 102-47 | List of material topics | 2019 SR page 8, 79-81 |
GRI 102 | 102-48 | Restatements of information | 2019 SR page 68 |
GRI 102 | 102-49 | Change in reporting | 2019 SR page 68 |
GRI 102 | 102-50 | Reporting period | 2019 SR page 68 |
GRI 102 | 102-51 | Date of most recent report | 2019 SR page 68 |
GRI 102 | 102-52 | Reporting cycle | 2019 SR page 68 |
GRI 102 | 102-53 | Contact point for questions regarding the report | 2019 SR page 83 |
GRI 102 | 102-54 | Claims of reporting in accordance with the GRI | 2019 SR page 8, 74-78 |
Standards | |||
GRI 102 | 102-55 | GRI content index | 2019 SR pages 74-78 |
GRI 102 | 102-56 | External assurance | 2019 SR page 68 |
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 75 |
ADDITIONAL RESOURCES | GRI INDEX |
Indicator | Disclosure | Description | Disclosure Location |
Number | |||
Management Approach | |||
GRI 103 | 103-1 | Explanation of the material topic and its | Identified throughout SR for each major |
Boundary | metric | ||
GRI 103 | 103-2 | The management approach and its components | Identified throughout SR for each major |
metric | |||
GRI 103 | 103-3 | Evaluation of the management approach | Identified throughout SR for each major |
metric | |||
Economic Performance | |||
GRI 201 | 201-1 | Direct economic value generated and distributed | 2019 SR pages 3-4,11; also see Annual |
Report page 89 | |||
GRI 201 | 201-2 | Financial implications and other risks and | 2019 SR page 11, 79-81 |
opportunities due to climate change | |||
GRI 201 | 201-3 | Defined benefit plan obligations and other | 2019 SR page 46; also see 2020 Proxy |
retirement plans | pages 48-49 | ||
Indirect Economic | |||
Impacts | |||
GRI 203 | 203-1 | Infrastructure investments and services | 2019 SR page 36-37, 55 |
supported | |||
GRI 203 | 203-2 | Significant indirect economic impacts | 2019 SR page 36, 41, 50-52, 55 |
Anti-Corruption | |||
GRI 206 | 206-1 | Legal actions for anti-competitive behavior, | Code of Business Conduct and Ethics |
antitrust, and monopoly practices | |||
Anti-Competitive | |||
Behavior | |||
GRI 206 | 206-1 | Legal actions for anti-competitive behavior, | Code of Business Conduct and Ethics |
antitrust, and monopoly practices | |||
Tax | |||
GRI 207 | 207-1 | Approach to Tax | Annual Report page 62; also see 2020 Proxy |
page 55 | |||
GRI 207 | 207-2 | Tax governance, control and risk management | Annual Report page 62; also see 2020 Proxy |
page 55 | |||
GRI 207 | 207-3 | Stakeholder engagement and management of | Annual Report page 62; also see 2020 Proxy |
concerns related to tax | page 55 | ||
Energy | |||
GRI 302 | 302-1 | Energy consumption within the organization | 2019 SR pages 70-71 |
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 76 |
ADDITIONAL RESOURCES | GRI INDEX |
Indicator | Disclosure | Description | Disclosure Location |
Number | |||
GRI 302 | 302-3 | Energy intensity | 2019 SR pages 70-71 |
GRI 302 | 302-4 | Reduction of energy consumption | 2019 SR page 37, 41 |
Water (2018 Standards) | |||
GRI 303 | 303-1 | Interactions with water as a shared resource | 2019 SR pages 28-30, 55 |
GRI 303 | 303-3 | Water withdrawal | 2019 SR pages 28-30, 71 |
GRI 303 | 303-5 | Water consumption | 2019 SR pages 28-30, 71 |
Biodiversity | |||
GRI 304 | 304-3 | Habitats protected or restored | 2019 SR pages 26-28 |
Emissions | |||
GRI 305 | 305-1 | Direct (Scope 1) GHG emissions | 2019 SR pages 70-71 |
GRI 305 | 305-2 | Energy indirect (Scope 2) GHG emissions | 2019 SR pages 70-71 |
GRI 305 | 305-4 | GHG emissions intensity | 2019 SR pages 70-71 |
GRI 305 | 305-5 | Reduction of GHG emissions | 2019 SR pages 34-36 |
GRI 305 | 305-7 | Nitrogen oxides (NOX), sulfur oxides (SOX), and | 2019 SR pages 70-71 |
other significant air emissions | |||
Environmental | |||
Compliance | |||
GRI 307 | 307-1 | Noncompliance with environmental laws and | 2019 SR page 71 |
regulations | |||
Employment | |||
Benefits provided to full-time employees that | 2019 SR page 45; also see 2020 Proxy | ||
GRI 401 | 401-2 | are not provided to temporary or part-time | |
pages 48-49 | |||
employees | |||
Occupational Health | |||
and Safety (2018 | |||
Standard) | |||
GRI 403 | 403-1 | Occupational health and safety management | 2019 SR page 7, 43-44 |
system | |||
GRI 403 | 403-2 | Hazard identification, risk assessment and | 2019 SR page 7, 31-32,43-44 |
incident investigation | |||
GRI 403 | 403-5 | Worker training on occupational health and | 2019 SR page 7, 43-44 |
safety | |||
GRI 403 | 403-6 | Promotion of worker health | 2019 SR page 7, 43-44 |
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 77 |
ADDITIONAL RESOURCES | GRI INDEX | |||||||
Indicator | Disclosure | Description | Disclosure Location | |||||
Number | ||||||||
GRI 403 | 403-8 | Workers covered by an occupatitonal health and | 2019 SR page 7, 43-44 | |||||
safety management system | ||||||||
GRI 403 | 403-9 | Work-related injuries | 2019 SR page 44, 69 | |||||
Training and Education | ||||||||
GRI 404 | 404-1 | Average hours of training per year per employee | 2019 SR page 47 | |||||
GRI 404 | 404-2 | Programs for upgrading employee skills and | 2019 SR page 47 | |||||
transition assistance programs | ||||||||
Diversity and Equal | ||||||||
Opportunity | ||||||||
GRI 405 | 405-1 | Diversity of governance bodies and employees | 2019 SR pages 45-46, 61 | |||||
Child Labor | ||||||||
GRI 408 | 408-1 | Operations and suppliers at significant risk for | 2019 SR pages 48-49 | |||||
incidents of child labor | ||||||||
Forced or Compulsory | ||||||||
Labor | ||||||||
GRI 409 | 409-1 | Operations and suppliers at significant risk for | 2019 SR pages 48-49 | |||||
incidents of forced or compulsory labor | ||||||||
Public Policy | ||||||||
GRI 415 | 415-1 | Political contributions | 2019 SR page 66 | |||||
ADDITIONAL RESOURCES | RISK MANAGEMENT PROCESS | ||||||
Risk Management Process | |||||||
Risk | Relevance & inclusion | Explanation | |||||
In accordance with the HSE Principles of our Board of Directors, CRC continually reviews | |||||||
programs to ensure compliance with applicable laws and regulations, promotion of health, | |||||||
safety, environmental protection and sustainability, and proactive community outreach. | |||||||
Regulation of GHGs and energy mandates may affect our business in many ways, including | |||||||
increasing the costs to provide our products and services, and reducing demand for, and | |||||||
consumption of, our products and services. CRC considers both current California and | |||||||
federal GHG and methane regulatory requirements, including California's AB32 (and its GHG | |||||||
Mandatory Reporting Regulation and Cap-and-Trade),Short-Lived Climate Pollutant and | |||||||
Current | Relevant, always included | Low Carbon Fuel Standard (LCFS) regulations, EPA's GHG and carbon capture and storage | |||||
regulation | regulations, and California and federal oil and gas regulations to control methane emissions, | ||||||
to be integral to our climate-related risk assessment. These regulations are evaluated under | |||||||
our CRC Risk Matrix and are classified under varying risk prioritization levels. For example, | |||||||
we consider California's LCFS to be of lower priority under our Risk Matrix since CRC operates | |||||||
the only two of the ten largest fields in California that have a lower carbon intensity under the | |||||||
LCFS than California's leading crude oil imports from Saudi Arabia. CRC considers current | |||||||
regulations to be directly relevant to our 2030 Sustainability Goals beyond compliance | |||||||
considerations as they address and shape the development of our society's and CRC's key | |||||||
energy supply and climate strategies across short, medium and long-term planning horizons. | |||||||
International agreements and federal and state laws, regulations and policies seek to restrict | |||||||
or reduce the use of petroleum products in transportation fuels and electricity generation, | |||||||
impose additional taxes and costs on producers and consumers of petroleum products and | |||||||
require or subsidize the use of renewable energy, which could further increase our direct | |||||||
costs. CRC is proactively engaged in rulemaking processes at the federal, state and local | |||||||
levels through independent action or in conjunction with trade associations, labor, agricultural | |||||||
and business groups, community organizations and other stakeholders. The tracking of | |||||||
upcoming regulations, either in the immediate timeframe of a specific rule or the anticipation | |||||||
of longer-term emission reduction requirements and opportunities and the state's 2045 | |||||||
Emerging | Relevant, always included | carbon neutrality goal, is always included as an important consideration in risk assessments | |||||
regulation | and risk reduction strategies. CRC's Board, Sustainability Committee and management | ||||||
consider emerging regulations, environmental impact analyses and other research projects | |||||||
and community stakeholder interests to be central risk factors in shaping energy supply | |||||||
and climate strategies that are affordable, resilient and sustainable over the long term. | |||||||
Emerging regulatory risks are assessed under our Risk Matrix and classified under varying risk | |||||||
prioritization levels. For example, we consider 2019 revisions to California's Cap-and-Trade | |||||||
regulation to accelerate the annual reduction in the statewide cap on GHG allowances starting | |||||||
in 2021 under AB 398 to be of medium priority under our Risk Matrix, since it may affect our | |||||||
operating costs. | |||||||
CRC considers risks and costs associated with compliance and enforcement of climate-related | |||||||
regulations, legal disclosure and reporting requirements, and potential litigation in our Risk | |||||||
Matrix and implements business processes to identify, manage and report appropriately to | |||||||
the Board of Directors, its Sustainability Committee, and external stakeholders as applicable. | |||||||
Legal | Relevant, always included | Compliance and enforcement are reported to the Sustainability Committee, with CRC's VP of | |||||
Regulatory Affairs overseeing the process. In the risk assessment process and the Risk Matrix, | |||||||
we consider these risks to be of varying priority levels. Safeguarding people and sensitive | |||||||
ecosystems is our highest priority, followed by regulatory compliance and associated legal | |||||||
requirements. CRC manages new or changing regulations using the knowledge and experience | |||||||
of subject matter experts within CRC and third-party consultants. | |||||||
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 79 |
ADDITIONAL RESOURCES | RISK MANAGEMENT PROCESS |
Risk | Relevance & inclusion | Explanation |
Technology is always included as a risk for CRC, particularly the need to develop energy | ||
efficient technology at our operations to mitigate emissions of GHGs and other compounds. | ||
CRC seeks to increase energy efficiency and reduce emissions, even as we supply more energy | ||
to Californians. CRC devotes significant resources to the design and construction of new | ||
facilities and in retrofitting existing facilities with technology which will create energy efficiency. | ||
For example, gathering systems within the Sacramento basin continue to be consolidated to | ||
reduce the number of compressors. CRC has installed microturbines to generate electricity | ||
Technology | Relevant, always included | from field gas at several fields to reduce flaring. We also installed air pneumatic units with solar |
power with battery storage to replace gas-powered pumps and controllers in several fields in | ||
the Sacramento basin, reducing methane emissions. CRC is developing a statewide methane | ||
capture strategy based on lessons learned in the Sacramento basin to sustain and extend | ||
our successful methane emission reductions. This current sustainability project milestone, | ||
which is part of our Sustainability Metrics that determine compensation for our management | ||
and workforce, includes engineering design and cost evaluation so that opportunities can be | ||
ranked to achieve and sustain greater methane emission reductions. | ||
Market factors are included in the CRC Risk Matrix as necessary and relevant and considered | ||
to be of varying priority levels. As CRC operates and produces energy exclusively within the | ||
State of California, CRC is subject to market risks related to California's chronic dependence | ||
on imported energy. Serious environmental, social, and governance issues in countries that | ||
supply energy to California, international turmoil, transportation accidents or disruptions, and | ||
embargoes can expose California consumers and communities to supply and price disruptions. | ||
Market | Relevant, always included | For example, policies such as electric vehicle mandates and subsidies and financial incentives |
for electric vehicles increase the stress on the state's electricity grid and the need for in-state | ||
electricity generation from traditional and renewable energy sources to supply this demand. | ||
To mitigate this, CRC collaborates closely with renewable developers, both to facilitate large- | ||
scale commercial solar projects above our mineral rights and on projects to install solar power | ||
behind the meter to power our oil and gas operations and reduce our energy use from the grid | ||
and continue to lower the carbon intensity of our production portfolio. | ||
Reputational risks are included in the CRC Risk Matrix as warranted and are considered to be | ||
of varying priority levels. CRC highly values its position as the operator of choice in California. | ||
CRC operates exclusively in California and we are governed by the state's leading safety, labor, | ||
human rights and environmental standards. We are the leading operator on California state | ||
Reputation | Relevant, always included | lands, and operate in coastal, urban and agricultural areas while helping maintain ecological |
preserves and wilderness areas. Accordingly, our reputation for environmental stewardship | ||
by applying innovative environmental safeguards, conservation measures and technology to | ||
meet CRC's HSE Principles, our 2030 Sustainability Goals, regulatory requirements and the | ||
expectations of our workforce and host communities is essential to sustain our success over | ||
the long term. | ||
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 80 |
ADDITIONAL RESOURCES | RISK MANAGEMENT PROCESS |
Risk | Relevance & inclusion | Explanation |
With all of our facilities located in California, within the San Joaquin, Los | ||
Angeles, Ventura and Sacramento Basins, CRC has identified events such | ||
as wildfires, heat waves, droughts, storms, mudslides, earthquakes, coastal | ||
flooding and flash floods to be applicable acute physical risks. These physical | ||
risks are included in CRC's Risk Matrix, which can result in emergency response | ||
Acute physical | Relevant, always included | actions and loss of production due to shutting down processing from power |
outages or for safety or environmental reasons. We include these risk scenarios | ||
as applicable in our Process Hazard Analysis. For example, CRC's operations in | ||
the Ventura Basin are at a relatively higher risk of wildfires due to their geograph- | ||
ic location. To mitigate this risk, CRC retains specialized experts to periodically | ||
review and assess these physical risks and our engineering and administrative | ||
mitigation measures. | ||
Coastal flooding, sustained heat waves and drought conditions are key chronic | ||
physical climate risks that we include in our Risk Matrix, including as applicable | ||
in Process Hazard Analysis, and we have assessed these risks to be of varying | ||
priority levels. CRC and our government partners in coastal operations evaluate | ||
the ability of facilities to withstand and mitigate coastal flooding. Several of | ||
our facilities, for instance, are located near the coastline and could be subject | ||
to coastal flooding, such as our Ventura, Long Beach, and Huntington Beach | ||
operations. If impacted by flooding, these operations could face production | ||
Chronic physical | Relevant, always included | shutdowns resulting in increased direct costs for CRC. CRC's Operations, Facili- |
ties and HSE teams implement engineering and administrative controls and safe | ||
work practices with respect to heat waves. While CRC has ample water supplies | ||
for our operations, we have invested over $25 million in water conservation, | ||
recycling and reclamation capital projects to ensure that we do not compete with | ||
other stakeholders for fresh water and that we make our treated, reclaimed water | ||
available for agriculture and recharge to alleviate impacts of drought. As a result | ||
of these investments, CRC has served the state as a net water supplier since our | ||
formation in 2014. | ||
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 81 |
ADDITIONAL RESOURCES DEFINITIONS AND FORWARD LOOKING STATEMENTS
Water Definitions Applied by CRC
- Fresh Water: Water typically purchased from municipal sources, water districts and water companies that requires little or no treatment for use. Fresh water may be potable or non-potable.
- Potable Water: Water that is suitable for drinking and residential use.
- Non-PotableFresh Water: Fresh water that is not suitable for drinking or residential use without treatment but that may be used for agriculture or other uses.
- Non-freshWater: Water from sources like reclaimed municipal wastewater, collected storm water or agricultural runoff that requires a significant amount of treatment before it can be used.
- Produced Water: Water that originates in oil and gas formations and is brought to the surface during the production of oil and gas.
- Reclaimed Produced Water: Produced water that has been treated by separation of oil, gas and solids for delivery to agricultural water districts for use in irrigation or recharge.
- Recycled Water: Water that is treated to remove solids and impurities and reused.
Forward Looking Statements
The information included herein contains forward-looking statements that involve risks and uncertainties that could materially affect our expected results of operations, liquidity, cash flows and business prospects. For a discussion of these risks and uncertainties, please refer to the "Risk Factors" and "Forward-Looking Statements" described in our Annual Report on Form 10-K. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "goal," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "target," "will" or "would" and similar words that reflect the prospective nature of events or outcomes typically identify forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made and we undertake no obligation to correct or update any forward-looking statement, except as required by applicable law.
We have included certain voluntary disclosures regarding our Sustainability Goals, Sustainability Metrics and related matters because we believe these matters are of interest to our investors; however, we do not believe these disclosures are "material" as that concept is defined by or construed in accordance with the securities laws or any other laws of the U.S. or any other jurisdiction, or as that concept is used in the context of financial statements and financial reporting. These disclosures speak only as of the date on which they are made, and we undertake no obligation to correct or update such disclosures, whether as a result of new information, future events or otherwise, except as required by applicable law.
Footnotes for Performance Summary
- Direct upstream emissions include Scope 1 GHG emissions from oil and gas drilling and production at fields operated by CRC and exclude those from the midstream operations of the Elk Hills gas and power plants, Ventura gas plant and Long Beach power plant. Emissions for 2019 do not include the portion of the Lost Hills field that was sold on May 1, 2019. Emissions are calculated in accordance with California regulations and emissions estimation protocols.
- Total direct emissions include direct upstream emissions plus Scope 1 GHG emissions from the midstream operations of the Elk Hills and Long Beach power plants, as well as gas processing at Elk Hills and Santa Clara Valley Gas Plants.
- Energy use and intensity exclude energy used by the midstream operations of the Elk Hills and Long Beach power plants, as well as gas processing at Elk Hills and Santa Clara Valley Gas Plants.
- Reportable release definitions vary by location. Any volume of oil released into state waters must be reported in California. Net oil released means the volume of oil and condensate spilled in reportable releases outside of containment and not recovered in liquid form.
- Taxes include state and local property, sales, use, severance and payroll taxes, and exclude GHG allowances.
- Excludes payments made to the State Lands Commission.
- See crc.com, Investor Relations for a discussion of these performance and non-GAAP measures, including a reconciliation to the most closely related GAAP measure or information on the related calculations.
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 82 |
We Are A California Resource
Contacts
Comments or questions about this report may be directed to:
Urban Paul
Vice President of Health, Safety, Environment & Sustainability
- 412-5100Urban.Paul@crc.com
Investor Relations | Public Affairs |
(888) 848-4754 | (818) 661-6005 |
crc_ir@crc.com | communications@crc.com |
CALIFORNIA RESOURCES CORPORATION | 2019 SUSTAINABILITY REPORT | 83 |
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California Resources Corporation published this content on 30 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2020 10:04:08 UTC