ConocoPhillips Statement on American Clean Energy and Security Act of 2009

HOUSTON--(Business Wire)--
ConocoPhillips views the current Congressional debate regarding climate as
important because it underscores the complexity in developing legislation that
balances our nation's economic growth, national security and greenhouse gas
(GHG) emission reduction needs. The American Clean Energy and Security Act of
2009 represents an important step in this process.

While the American Clean Energy and Security Act of 2009 addresses some of the
policy issues critical to our company, some key issues remain unresolved. The
proposed bill will establish a cap on GHG emissions, and regulated entities must
submit allowances, or permits, to cover their emissions. The government will
distribute some of these allowances to some industries without being subject to
auction in order to dampen the economic impact of the cap-and-trade program on
these industries and their consumers. ConocoPhillips supports fair and equitable
allocation of allowances to fuel producers and their consumers and we are
concerned that the current draft of the American Clean Energy and Security Act
does not meet this threshold.

Under the provisions of the proposed bill, U.S. refiners will have a legal
compliance obligation to purchase allowances for GHG emissions from their
manufacturing facilities, as well as allowances for consumer GHG emissions
associated with using refined petroleum products, such as transportation fuels.
This means that U.S. refiners will be bearing the cost for roughly one-third of
the nation`s GHG emissions but only receiving 2 percent of the total allowances
under the current proposal. It is likely that refiners will not be able to pass
along 100 percent of the costs of securing allowances, and they should be
provided an allowance allocation for unrecovered costs.

This situation also will be impacted by imports of fuels from outside the United
States. Like other trade-exposed U.S. industries, the domestic refining industry
will face competition from fuel producers in countries that either choose not to
regulate GHG emissions or choose to protect their domestic industries. We expect
our exposure from foreign refiners to increase in the future in large part due
to several very large refineries being constructed overseas that are targeting
the U.S. market.

The current emission allowance allocation proposal in the bill fails to provide
adequate protection to domestic refiners from unregulated foreign competition
and leaves the sector exposed to undue economic harm. The reduction in U.S.
refining capacity that could result from this policy would lead to increased
imports of transportation fuel, erosion of national energy security, and loss of
American jobs.

ConocoPhillips remains committed to the development of a comprehensive, national
climate protection program that addresses greenhouse gas emissions while
ensuring the availability of the secure, affordable and reliable energy supply
necessary for continued economic recovery and growth. We look forward to
continued constructive collaboration on this important issue.

ConocoPhillips is an integrated energy company with interests around the world.
For more information, go to www.conocophillips.com.

ConocoPhillips, Houston
Clayton Reasor (investors) 212-207-1996
or
Kristi DesJarlais (media) 281-293-4595

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