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1. www.advisian.com
Climate Change
Adaptation and
Resilience
Water in the Oil & Gas Sector

2. Outline
Definitions
Climate change background
Hazards, risks and opportunities
Drivers for change
Key principles
Adaptation actions and resilience
IPIECA's support to industry

3. Definitions
Adaptation makes changes to prepare for and
negate the effects of climate change.
Resilience is the desired outcome of adapting
to cope with the effects of climate change.
Mitigation deals with the causes of climate
change and works to reduce man-made effects
on the climate system.

4. Climate change – the "new normal"
• Climate change has become a
reality
• 2016 was the hottest year on
record, globally
• 16 out of 17 of the hottest years
ever recorded have occurred since
the year 2000
• Failure of climate change
mitigation and adaptation was
identified as the global risk with
the greatest potential impact in
20161. Impacts of water crises
ranked third.
Observed global mean annual (top) and decadal
(bottom) surface temperature changes between from
1850 to 2012. Changes are relative to the mean of
1961−1990 (IPCC AR5, 2013).
1World Economic Forum (2016): Global Risks Report 2016

5. Two challenges: mitigation and adaptation
• Mitigation through emission reduction will not be sufficient on its
own.
• Adaptation to climate change will also be required to achieve
resilience.

6. • Increasing temperatures over land and sea
• Increasing risk of heat waves
• Decrease in water quality
• Rising sea levels
• Changing rainfall patterns
• Increasing storm intensities - storm surge,
wave heights
CONFIDENCE
High
Low
Climate change hazards

7. Flood risk
Ground stability
Drainage capacity
Asset integrity
HVAC efficiency
Equipment reliability
Storage/transportation
Productivity
Emergency planning
Water supply
Ground stability
Power supply
Transportation
Workforce H&S
Water supply
Water quality
Vector borne diseases
Community health
Discharge limits
Water quality
Erosion
Coastal habitats
Regulation
Moving water
Heating
Cooling
Power outages
Hydropower
Risks and opportunities O&G
Assets and operations
Logistics and supply
chains
Community impact
Environmental
performance
Energy demand
Beyond
Fenceline
In Fenceline
Wider
Stakeholder

8. Risks and opportunities O&G
Advisian / 8
Area benefitting
from adaptation actions
Area at risk pre- &
post-adaptation
New area at risk
post-adaptation
Flood risk
Critical to understand
impacts of adaptation
actions.
Adaptation actions should
provide wider benefits:
• Sustainable drainage
systems (SuDS)
• Compensatory storage
• Flood storage reservoirs
can be used to enhance
water supply

9. Drivers for change: water
Increased water security and competition for resources
Increased costs of water supplies
Costs associated with water efficiency measures
Costs associated with asset protection
Ensuring security of supply chain

10. Drivers for change: water
Increased costs of water:
• Water tariff increases 3.6% globally (large variation)1
• Penalties increased seven fold 2015-20162
1Global Water Intelligence’s 2016 Global Water Tariff Survey
2CDP 2016 Annual Report of Corporate Water Disclosure
Impact of climate change: Projected annual losses from fluvial and pluvial flooding in OECD
countries (Source: OECD (2016) Financial management of flood risk)

11. Drivers for change: water
Water scarcity: 30%-70% decrease in groundwater recharge by 20503 in
semi-arid zones
>50% of global population will be living in areas of severe
water scarcity by 20501
Competition: Demand will be 40% greater than supply by 20302
Food security: Agriculture main user of water comprising 70% of withdrawals
Asset protection: Increased likelihood of extreme events (droughts and floods)
affecting supply, business continuity and worker safety
1Metals & Mining: a sector under water pressure, CDP 2013
2Sustainable Insight: Water Scarcity a dive into global reporting trends, KPMG 2012
3United Nations World Water Development Report 4. Volume 1: Managing Water under Uncertainty and Risk, 2012
Konikow, 2011, Contribution of global groundwater depletion since 1900 to sea‐level rise Geophysical Research Letters, Vol. 38

12. Drivers for change: investors
“Investors need to know that their
holdings in water-intensive value
chains in water-stressed regions are
able to generate robust cash flows
into the future.”
HSBC, Water: resilience in a thirsty world, January 2013
58
18
6
17
Number of countries with mitigation and
adaptation framework laws or policies
Mitigation & adaptation
frameworks
Mitigation framework
only
Adaptation framework
only
None
CERES Investor Handbook for Water Risk Integration– Aqua Gauge financial risk tool

13. Key principle: coping ranges,
critical thresholds and vulnerability
After Willows and Connell, 2003
Identifying coping ranges
and critical climate-related
thresholds is a vital step in
understanding vulnerabilities
and planning for adaptation

14. Key principle: climate extremes
vs. incremental changes
Impacts of incremental, small, relatively
slow changes should not be ignored.

15. Key principle: flexible adaptation
planning in the face of uncertainties
Flexible or “adaptive”
solutions can work to
limit risk over time
Acceptable level of risk
Time2017 2050 2100

16. Adaptation and resilience measures
Ecosystem based adaptation
Engineered/hard structural
solutions
Combination of green and
grey measures
Changes in processes and procedures,
developing emergency response plans
Data collection, research,
monitoring, awareness raising
Stakeholder engagement, water
stewardship
Updating design standards
Building adaptive capacity Delivering adaptation actions

17. Adaptation actions
and resilience
Project examples

18. Engineering Solutions (Design)
Location: Middle East
Sector: Hydrocarbons
Risk: Construction of critical assets and infrastructure in
areas at risk of flooding.
Approach: Quantification of impacts of climate change
on future flood events. Assessment of impacts on critical
infrastructure. Adaptation of design and emergency
planning procedures.
Outcomes:
• Asset protection through hard engineering (flood
bunds and ground re-profiling) and land use
planning (movement of at-risk assets)
• Emergency planning
• Incorporation of actions in Environmental and Social
Management Plan

19. Economic security
Location: Central America
Sector: Infrastructure
Risks: Strategically important port and a critical regional
traffic hub at threat from climate change impacts across
entire value chain –flooding, sedimentation,
trade/economic impacts
Approach:
• Hydrological and oceanographic analysis of future
conditions
• Financial and economic analysis of adaptation (NPV)
• Prioritization of adaptation actions
Outcomes: Adaptation plan

20. Training and Governance
Location: Global
Sector: Hydrocarbons
Risks: Physical risk to assets and operations.
Reputation.
Approach:
• Portfolio wide risk assessment and adaptation
plan
• Revision of risk management policies and codes
• Training of key staff
Outcomes: Adaptation plan

21. Location: Middle East
Sector: Hydrocarbons
Risk: Decrease in water quality and availability with
climate change
Approach:
• Evaluation of changes in future water requirements
and users
• Determination of Total Economic Value of water over
20 year timeframe
• Assessment of investment case into re-use
Outcomes:
• Policy initiation - no groundwater abstraction
Water governance

22. Location: Southern Africa
Sector: Hydrocarbons
Risk: Construction of LNG terminal required resettlement
of villagers. Future water availability at proposed locations
a key consideration.
Approach:
• Assessment of climate change impacts on future water
availability and quality
• Determination of saline intrusion potential and extent
• Development of water quality and quantity mapping
Outcomes:
• Identification of exclusion areas for resettlement based
on future water availability
Water availability

23. Water availability
Location: North Africa
Sector: Hydrocarbons
Problem: Climate change projections indicated reduced
water availability that may not meet unconventional gas
project demand
Approach:
• Extrapolation of climate change predictions on
precipitation to impacts on water availability
• Water demand prediction for two specific exploration
blocks
• Climate change sensitivity analysis with water balance
prediction for three climate change case scenarios out
to 2060
Outcome:
• Groundwater wellfield
• Resilience through additional source (dam);
engagement with catchment stakeholders

24. Location: Europe
Sector: Utilities
Risk: Notable risks to assets from climate change
identified including flooding, erosion and impacts to
supply chain.
Approach: Development of climate risk mapping tool
using high, medium and low emissions scenarios.
Outcomes: Tools to support decision making on risk
management relating to:
• River bed and bank erosion exposing pipelines
• Flash flooding impacting bridges carrying gas mains
• Flooding of assets
• Impacts on critical supply chain
• Contaminant mobilisation and migration
Masterplanning

25. Integrated planning
Location: South-East Asia
Sector: Cross-sector initiative
Risk: Flooding and water security risks for an urban
centre
Approach:
• Development of a waste management plan
• Assessment of shallow water supply and soil
infiltration
Outcomes:
• Control of waste management to prevent blocking of
drains and pollution of rivers
• Community plan for ‘biopore’ (small bores filled with
leaf litter) installation to reduce run-off

26. Hydropower operation
Location: Latin America
Sector: Utilities
Risk: Operational and financial risk to assets from
changes in hydrological behaviour
Approach: Develop hydrological scenarios and
statistical analysis to quantify risks and contingencies
Outcomes:
• Risk matrix and scenarios of future outcomes
- Spillway capacity
- Revenue changes (+/-)
- Dam safety requirements
- Normal and Emergency Operational Procedures

27. Adaptation and resilience summary
Building adaptive capacity Delivering adaptation actions
Focus to date around
hard engineering
Continual emergence
of drivers

28. Contact Details:
Mike Lelliott | Practice Lead Water Solutions
Email: Mike.lelliott@advisian.com
Direct: +44 (0) 208 326 5231
Mobile: +44 (0) 7785 277176
Contact Details:
Dr Richenda Connell | CTO
Email: r.connell@acclimatise.uk.com
Direct: +44 (0)1865 554466
Mobile: +44 (0)7909 840731

29. Discussion:
How can IPIECA
support the industry?

30. How can IPIECA support the industry?
Suggestions
Common approach to
climate change scenarios
considered in design
Facilitating sharing of best
practice with regards to climate
change adaptation and resilience
Providing guidance on
approach to incorporating
climate change into operations
Providing guidance on
reporting standards (e.g.
on resilience, sustainable
use of water, climate risk
disclosure, etc.)
WHAT ELSE?

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