By enacting a legislative requirement for a price on carbon, we believe the U.S. will increase our costs and decrease demand for our product, we support a well-designed pricing regime on carbon emissions as the most effective and predictable policy action to reduce GHG emissions across the economy. For example, in Norway, we are managing carbon cost risk with specific actions to study both operational emissions reduction opportunities as well as technical modification opportunities and evaluate project economics that include the Norwegian carbon fee and European Union CO2 emissions costs (EU ETS). GHG emissions costs, or carbon costs, are another near-term risk in some jurisdictions where we operate. Good examples of technology developments that decrease GHG emissions intensity are our commercialization of non-condensable gas co-injection at our oil sands operations which improves our steam-to-oil ratios by 20-30%, the deployment of wellbore technology such as flow control devices and multilateral wells which improve steam-to-oil ratios by 10-20%, and the piloting of steam additives which has the potential for a 20% improvement to our steam-to-oil ratio. The cost of compliance and investment in emissions intensity reduction technologies influence investment decisions for the Canada business unit, where we are purchasing carbon offsets while evaluating and developing technology opportunities such as CCS and subsurface technology to reduce emissions for existing and new facilities. For example, regulations issued by the Alberta government under the Emissions Management and Climate Resilience Act require any facility existing in 2016, with emissions equal to or greater than 100,000 metric tons of carbon dioxide or equivalent per year, to reduce its net emissions intensity, with reduction increases over time. Regulations to address climate-related risk, including GHG emissions, are a near-term risk for several of our businesses. Our near-term climate-related risks are generally government policy related and managed at the business unit level through policy advocacy and technology to reduce emissions. Our GHG forecasting and financial planning processes are used to determine risks and opportunities that could have a material financial impact for that period. Our near-term time horizon is one to five years, during which we can complete short-cycle drilling campaigns and small projects. The time horizons we use for climate-related issues are based on the time we expect it will take for the risks to manifest, our planning time horizons and the time required to realize the majority of the net present value of our projects. Climate-related disclosure and reporting.Emissions reductions and emissions management.Those risks broadly fall into four categories: ![]() As described in the Risk Management section, we evaluate and track our climate-related risk through our SD Risk Register and Climate Change Action Plan.
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