EOG’s Position on Global Climate Change

EOG supports efforts to understand and address the contribution of human activities to global climate change through the application of sound scientific research and analysis. EOG produces natural gas, one of the cleanest burning and most environmentally friendly fossil fuels. In addition, the company believes that the reduction of air emissions throughout its operations is both in the best interests of the environment and a prudent business practice. A safety and environmental report that includes climate change issues is presented to the EOG Board of Directors annually.

EOG is a member of the American Exploration and Production Council (AXPC), a national trade association that represents large U.S. independent crude oil and natural gas exploration and production companies. AXPC companies have been active in voluntarily reducing methane emissions. Additionally, the AXPC has issued a formal position statement on climate change, which supports continued research on the contribution of human activities to climate change and the development of policy and regulatory initiatives in a scientifically sound and economically transparent manner. The AXPC supports the sharing of best management practices and recognizes that natural gas will be a critical component of any climate change policy. The complete AXPC position statement, which EOG supports, is available on the AXPC website.

EOG is also a member of the Independent Petroleum Association of America (IPAA), a national trade association that represents independent crude oil and natural gas explorers and producers in the United States. The IPAA and many of its member companies support programs to voluntarily reduce methane emissions. With respect to climate change, it is the stated position of the IPAA that science must serve as the foundation for global climate policymaking; economic and social impacts must be addressed; and the important role of American crude oil and natural gas production must be recognized in any policy actions.

The company strives to promote policies through these and other trade associations that are consistent with EOG’s position on global climate change.

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Emissions Management and Reporting

It is important to EOG, for operational, environmental and economic reasons, to reduce air emissions from its operations. EOG’s facilities are specifically designed to minimize emissions and maximize recovery of all vapors. Where warranted, EOG has installed specialized control equipment, such as low bleed controllers, vapor recovery units and high-efficiency combustion devices, to minimize air emissions.

EOG has a program in place to promote compliance with state and federal permits and regulations. EOG recently implemented an Emissions Management System for calculating emissions based on recognized methodologies and accepted engineering practices. This system is being utilized to calculate greenhouse gas (GHG) emissions from the company’s operating facilities.

Since September 2011, EOG has filed reports with the EPA in accordance with the regulatory requirements for facilities with combustion sources greater than 25,000 tons per year (based on emissions data from prior periods). EOG continues to gather data to comply with future reporting requirements. EOG has also gathered GHG emissions data since 2011 for all facilities subject to EPA’s regulatory requirements, and periodically reports that data to the EPA in accordance with regulatory requirements. This data will be made available to the general public by the EPA.

We are also taking steps to comply with the New Source Performance Standards and the National Emission Standards for Hazardous Air Pollutants for the crude oil and natural gas sector that were recently finalized by the EPA. These standards are designed to limit emissions of volatile organic compounds and other designated emissions from a variety of sources relating to the completion of natural gas wells and the processing and transportation of natural gas.

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Conservation Programs

EOG frequently reviews energy use and efficiency and takes appropriate actions to reduce consumption as well as improve efficiency as a normal part of its operations. As a result of these reviews, EOG has installed electric or dual-fuel compressors in some areas. Additionally, in support of recent regulatory initiatives, EOG utilizes electric-driven pumps and compressors in certain regions of the United States to lessen the emissions generated in those areas.

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Regulatory Considerations

EOG is aware of the increasing focus of local, state, national and international regulatory bodies on GHG emissions and climate change issues. The company is also aware of legislation proposed by U.S. and Canadian lawmakers to reduce GHG emissions. EOG will continue to monitor and assess any new policies, legislation or regulations and take appropriate actions, where necessary.

EOG believes that any new climate change policies must be based on sound scientific and economic considerations, which are fully disclosed to the public, and rely on market forces to efficiently encourage consumer conservation and the development of alternative energy sources. Also, EOG believes that the application and enforcement of policies and regulations should apply appropriately to all sectors of the economy and be uniform at the local, state, national and international levels. Moreover, EOG believes any emissions limits or standards imposed on industry should be based on reliable, available and economically feasible technology.

Since GHG emissions from the combustion of natural gas are among the lowest of any fossil fuel on a per-unit basis, EOG expects that the increased use of natural gas in preference to other fossil fuels will be a critical component of any climate change policy. EOG will strive to increase production of natural gas where economically feasible in response to increases in natural gas demand.

GHG intensity, which is a standard emissions measurement in a variety of industries, is the level of GHG emissions per unit of economic activity. GHG intensity is typically based on gross domestic product (GDP) when measured at a national (i.e., country) level or on aggregate output or production when measured at an industry or individual company level. GHG intensity and other emissions intensity rates are used (for example, by regulatory bodies such as the EPA) to compare the environmental impact of different fuels or activities and to determine progress in achieving emissions reduction targets. EOG’s GHG intensity rate for 2012, as reported in accordance with the EPA’s reporting rules, was 35.701 tons CO_2e (carbon dioxide equivalent) per MBoe produced from EOG’s U.S. operations during 2012.

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