Targets, technology and transparency
Devon is committed to decarbonizing our operations, evaluating new opportunities and transparently reporting our results. We’re doing our part to be a responsible operator for the benefit of the environment, our employees and their families, our communities, our shareholders and our business—today and in the future.
Our long-standing commitment to reduce air emissions, particularly GHGs, is embedded in our culture through our Environment, Health and Safety (EHS) Philosophy and our core values to earn stakeholder trust, proactively manage risk and challenge ourselves to continuously improve. To reduce our impacts on the air and climate, we collaborate within and outside the company to implement technology, best practices and tools, and to generate new ideas and innovate.
Reducing the carbon intensity of our operations starts with proactively controlling and reducing air emissions from our operations. Devon focuses on reducing operational emissions of GHGs such as carbon dioxide (CO2) and methane, as well as volatile organic compounds (VOC), nitrogen oxide (NOx) and other gases, and reporting our results. In June 2021, we announced aggressive targets to lower the carbon intensity of our operations and outlined our approach to managing climate-related risks and opportunities in our updated 2021 Climate Change Assessment Report. We’re taking these actions to lower our regulatory, market and reputational risk, but also because we believe protecting air quality aligns with our values and makes our business more sustainable.
Air emissions performance management
We invest in the latest equipment and deploy well-trained employees and contractors to carry out our emissions reduction programs. Our air quality program supports efficient, effective work by defining responsibilities and requirements for communications, compliance, recordkeeping and training.
Because emissions programs and results are critical to Devon’s overall performance, we’re organized to drive progress. Our Environmental, Social and Governance (ESG) Steering Committee monitors our air emissions performance in the context of the evolving regulatory, legal and stakeholder landscape. It also advises our senior leaders on issues for consideration in enterprise risk management, stakeholder engagement, and regulatory and legal compliance.
Our vice president of ESG and EHS serves on both the ESG Steering Committee and the cross-functional EHS Council, providing continuity and alignment while elevating our companywide focus on ESG performance, including air emissions. To implement Devon’s emissions reduction strategy effectively, the EHS Council sets the strategy in close coordination with the vice president for ESG and EHS, the ESG Steering Committee and senior leaders. In early 2022, we established our ESG team, led by the new role of ESG manager, to provide advisory support across Devon to help achieve our ESG and sustainability-related objectives and goals.
Investing in these resources reinforces the critical importance of meeting our targets and shows the level of leadership buy-in to continue our progress. It has also encouraged and enabled our business units to take ownership and operationalize their goals. Business units are devoting capital and resources to mitigate emissions, evaluate and enhance facility designs, and learn about the new technologies we may use to achieve Devon’s emissions goals.
Managing air permitting compliance
Compliance with all applicable federal and state environmental laws and regulations is central to our EHS Philosophy and the Devon Code of Business Conduct and Ethics. Our compliance process guides employees on meeting Devon’s air permitting requirements in our operating areas, aided by a web-enabled database that quickly distributes requirements for new and modified air permits to the people directly responsible for compliance.
Devon facilities and equipment may at times emit VOCs, NOx and other gases that are subject to state and federal emissions authorization permits and limits. We pursue full compliance by clearly communicating requirements to our operating facilities. Some facilities are subject to annual emissions inventories, which we submit to the appropriate regulatory agencies. The information is publicly available in states where these inventories are required. If compliance issues arise, we work expeditiously and constructively with regulators to address them. We’ll continue to proactively look beyond compliance to further reduce our air emissions.
Greenhouse gas emissions methodology
Devon reports GHG emissions from fuel combustion, flaring, fugitive emissions, venting and storage tank losses (Scope 1) and electricity consumption (location-based Scope 2) for assets under our operational control. We collect data on GHGs (carbon dioxide (CO2), methane and nitrous oxide) and submit annual GHG emissions according to the requirements of the U.S. Environmental Protection Agency (EPA) Greenhouse Gas Reporting Program.
We also report indirect emissions from the use of sold products (Scope 3) on an equity basis from sources not owned or controlled by Devon. Scope 3 GHG emissions include indirect emissions from the consumption and use of Devon’s crude oil and natural gas production.
To estimate our Scope 3 emissions, Devon relies on IPIECA’s 2016 guidance document, Estimating Petroleum Industry Value Chain (Scope 3) Greenhouse Gas Emissions. According to this guidance, category 11, “Use of Sold Products,” is generally the largest contributor of Scope 3 emissions for a fuel-producing company and can account for more than 80% of a company’s total Scope 3 emissions. We report “Use of Sold Products” by calculating combustion emissions for our oil, natural gas and marketed natural gas liquids products.
It is important to note that Scope 3 emissions estimates are subject to uncertainty, inconsistency and duplication due to the reporting of assets outside the control of the reporting company and various reporting methodologies. In addition, two or more companies will account for the same emissions within their Scope 1, 2 or 3 emission inventories (as further described in the IPIECA guidance document).
As an exploration and production company, Devon has no direct control over how the raw materials we produce and sell are ultimately consumed. For this reason, we are committed to and focused on Scope 1 and Scope 2 location-based emissions for assets under our control, where we can most directly and meaningfully effect emissions reductions. We will continue to evaluate ways in which we can reduce value chain emissions and engage constructively with stakeholders upstream and downstream of our production operations.
Our baseline recalculation methodology
This baseline serves as a hypothetical reference point for what the emissions intensity would have been in the absence of emissions reduction efforts over time. To comparably track progress toward the targets, adjustments to the emissions baseline may be necessary to reflect structural, organizational or reporting changes that may occur over time. For example, an acquisition or divestiture could significantly impact our emissions performance and impair comparability from the emissions baseline.
We relied upon guidance from the Greenhouse Gas Protocol and IPIECA in establishing our baseline recalculation methodology. Our baseline will be adjusted if impacted by one or more trigger events that result in a change to the emissions baseline of 5% or higher on an absolute or intensity basis. Trigger events include structural changes; source ownership or control changes; changes to reporting boundaries, quantification methodologies or data improvements; or discovery of errors.
Our 2019 baseline has been recalculated to reflect the divestiture of the Barnett Shale in 2020, divestiture of the Wind River Basin in 2021, and acquisition of Felix Energy in 2020.
We believe our recalculation methodology affirms our commitment to structurally drive down emissions, rather than divesting assets as a means to achieve our ambitious emissions reduction targets. We are committed to the ongoing review and assessment of the appropriateness of our emission reduction target levels and will adjust as needed.
Note: Consideration of trigger events that occurred in 2022 and any resulting adjustments to Devon’s 2019 baseline will be included in our 2023 Sustainability Report.
Addressing our primary emissions sources
Our continuous improvement culture led Devon to develop a detailed understanding of where our emissions come from. This made it possible to address our air emissions at the primary sources through a variety of effective mitigation strategies:
- Reducing flaring across our entire portfolio of producing assets
- Expanding and enhancing our leak detection and repair program to find and fix equipment leaks
- Transitioning to air-driven pneumatic controllers
- Cutting combustion from drilling, completions and production by increasing the use of engines powered by electricity and alternative fuels
- Minimizing venting and flaring from storage tanks
We evaluate emissions detection and quantification technologies on an ongoing basis and collaborate with industry, environmental groups and agency partners on emissions reduction strategies. In 2022, we continued our focused effort and record of progress in lowering GHG emissions.
Flaring: Continuing reductions
Flaring of natural gas – a controlled ignition process for eliminating methane and VOC emissions – is necessary for safe operations in various phases of the oil and natural gas production process. Devon strives to avoid entirely the venting of raw gas and to limit flaring to the extent possible at all locations. Reducing flaring is a priority in our broader emissions reduction strategy because we want to protect the environment and capture as much natural gas as possible for its economic value, while also complying with laws, regulations and permits.
We continually evaluate and optimize our facilities, including installing reliable pressure-relief valves to minimize tank releases and vapor recovery equipment to capture flash gas emissions and route them to a pipeline. Devon also uses “green completions” to capture produced natural as following hydraulic fracturing. Where flaring is unavoidable, we install pilot monitoring equipment to help ensure the gas is properly combusted.
By prioritizing flaring reductions and employing best practices, we have meaningfully improved our flaring performance across the company.
For example, in 2019, the Cotton Draw field accounted for most of Devon’s flared gas volumes in our Delaware Basin operations of New Mexico. Upon investigation, we identified insufficient takeaway capacity or midstream constraints as the primary driver of flaring in the basin. To drive down these upset conditions, Devon took ownership of the associated midstream gas compression equipment. We made operational refinements, upgraded compressors, adjusted the flow rates of some wells and shut-in others. We also made a multi-year commitment to our Cotton Draw Midstream partnership, agreeing to contribute our existing gas gathering and compression infrastructure in an area of mutual interest. We dedicated about 24,000 acres for gathering and compression on the partnership’s system, while our partner, QL Capital Partners (QLCP), agreed to fund a $100 million distribution to Devon to build out the Cotton Draw Midstream assets over the next several years. As a result, flared volumes in the Delaware Basin of New Mexico declined from about 4% in mid-2019 to 0.5% in 2020 to 0.2% in 2021.
After seeing significant performance improvement in late 2019 and 2020, we continued making progress in meaningfully reducing our flared volumes in each of our operating areas in 2021. We established a two-pronged approach to continue improving our flaring performance across the company – targeting a flaring intensity of 0.5% of gross natural gas produced by 2025 and eliminating routine flaring, as defined by the World Bank, by 2030. We plan to drive further improvements across our operating areas by continuing to employ best practices that have proven to be effective for reducing flared volumes and minimizing emissions. They include implementing a flare management program; continuous gas capture planning and collaboration with midstream partners; enhancing separation and compression reliability; choke management; pigging lines; and optimizing combustion. As a result, our company-wide flaring intensity improved from 2.2% in 2019 to 1.5% in 2020 to 0.9% in 2021 – an improvement of 57% since 2019.
We’re also sharing our best practices with trade association partners because we believe it’s crucial that we work together to reduce flaring and air emissions across the industry. Devon is a founding member and current steering committee member of The Environmental Partnership, a voluntary coalition of oil and natural gas companies operating across the U.S. seeking to reduce air emissions. In 2020, the partnership announced the launch of its latest initiative, the Flare Management Program, the development of which was chaired by Devon. As part of the program, companies will share best practices to reduce flaring, encourage beneficial use of associated gas, and improve flare reliability and efficiency when flaring does occur.
Devon will continue to look at a broad spectrum of opportunities to reduce flaring and related emissions to not only meet our own targets, but continue improving performance across the industry.
Equipment leaks: Effectively reducing methane emissions over time
Methane emission detection technologies are evolving rapidly and are a central component of Devon’s broader emissions reduction strategy.
Using optical gas imaging (OGI) cameras to detect leaks has been one of Devon’s primary emissions mitigation tactics since 2014. Our leak detection and repair (LDAR) program has been effective at finding equipment leaks from piping components and associated equipment and was a major contributor to achieving our first methane intensity target well ahead of schedule.
Environmental operators in each operating area focus primarily on conducting LDAR surveys at our sites and then making sure repairs are successful. We analyze the repair data to help us focus on reducing the number and frequency of leaks. If we pinpoint certain components or equipment that have repeat leaks, we consider replacing them on a field-wide basis. This approach led us to install thief hatches that have a lower leak rate and focus on specific equipment failures and settings. It also enabled us to improve flare maintenance and verify performance of vapor recovery units (VRU).
To help meet the regulatory requirements for LDAR inspections, our environmental and operations teams developed a mobile app to capture, enter, track and document LDAR survey findings. The app automatically syncs any needed repairs, all of which are required for compliance. This has resulted in a more efficient, consistent and systematic LDAR program.
We continue to learn from the LDAR data we collect and then refine best practices in facility design, equipment improvements and preventive maintenance to further reduce emissions from our facilities. For example, we conduct engineering and pre-startup reviews of facilities and take other steps to help verify design and proper installation of closed-vent systems and control devices.
To further reduce emissions from equipment leaks, we’re expanding and enhancing our LDAR program. We continue to steadily expand our existing program and aim to achieve the following In 2022:
- Survey 100% of production facilities with OGI cameras at least once annually
- Survey 100% of production facilities with aircraft flyovers at least twice annually
- Install continuous emissions monitoring on 20% of production
Devon has a cross-functional team that evaluates advanced methane detection technologies that have the potential to be effective at not only finding leaks more timely and over broader areas, but also assessing the magnitude of the leaks, allowing for faster detection, mitigation and quantification. We are investigating opportunities for advanced OGI, continuous on-site monitoring, and remote detection using facility flyovers and satellites. We are testing multiple continuous, near-continuous and non-continuous technologies at our emissions monitoring test facility in the Anadarko Basin to inform which innovative technologies are viable candidates for deployment, some of which are being incorporated more broadly across Devon’s operating areas.
We will continue to monitor the rapid evolution of the technology solutions on the market and identify the most promising technologies to test and deploy across our operating areas. Ultimately, we’ll select the technologies with the best results that can help Devon reach our ambitious emissions reduction objectives and targets.
Pneumatic devices: Eliminating natural gas-driven devices
Eliminating gas-driven pneumatic devices is part of Devon’s strategy to reduce our air emissions. We replaced high-bleed natural gas pneumatic controllers on hundreds of well sites in Wyoming, Oklahoma, New Mexico and Texas, and we no longer use them on new wells. In the Delaware Basin, legacy Devon has installed air-driven pneumatic pumps and controllers at nearly all new facilities since early 2019.
Combustion: Alternative fuels and power sources
Diesel motors powering drilling rigs and hydraulic fracturing operations can be a significant source of emissions. We’ve cut these emissions, reduced related noise and shrunk our operational footprint by replacing diesel-only engines with dual-fuel motors that run on diesel or compressed natural gas (CNG), liquefied natural gas (LNG), field gas or electricity. In 2021, about 52% of wells were drilled with rigs running on dual-fuel or electricity. This avoided an estimated 20,200 metric tonnes of CO2 from 2.7 million gallons of diesel fuel.
Electrification will be a key part of our strategy to meet our net zero GHG emissions for Scopes 1 and 2 by 2050. We seek to plan effectively so we can get grid power to our locations before drilling rigs arrive. Devon is also looking to identify other types of equipment and practices we can power with electricity in the future to avoid using diesel fuel.
In the Delaware Basin, we’re piloting an effort to supplement highly dynamic power demand by bringing emissions-reducing renewable energy and battery storage into our power supply. This effort involves integrating a behind-themeter 5-megawatt solar array into our operations near the Texas-New Mexico state line area. The array will produce power that displaces electricity that would have been purchased from the grid and delivered across state lines. Ultimately, we expect the data generated to help ensure the renewable energy is used efficiently, lowers costs and provides Devon a competitive advantage for future growth.
Storage tanks: Lowering venting and flaring
To reduce venting and flaring from oil and condensate storage tanks, we install vapor recovery towers (VRT) to maximize gas recovery and minimize the volume of tank vapors that need to be flared.
In 2021, we successfully piloted a low-emission storage tank design that further maximizes gas recovery and eliminates the need to flare tank vapors during normal operation. The design also minimizes emissions through a reduction in the number of potential leak sources, as well as open thief hatches and other components that can lead to common equipment failures. We’ve standardized this low-emission storage tank design in the Delaware Basin, where we’re installing the highest number of new facilities.