Environment

Being a premier operator includes integrating top-tier environmental stewardship.

SM Energy strives to operate in a safe and environmentally responsible manner, in support of our industry’s efforts to ensure the delivery of secure, safe and affordable energy.

We have announced the following specific targets for our company:

0

Zero routine flaring at all SM Energy operations and non-routine flaring not to exceed 1% of natural gas production, each by year-end 2023 based on the full year average.

50%

Reduction in Scope 1 and 2 GHG emissions intensity by 2030 with 2019 as the base year.

0.04

Metric tonnes CH4/MBoe is maintained or improved for methane emissions intensity, since 2020.

We have incentivized pursuit of these goals through the compensation structure for all employees, which incorporates EHS performance targets including TRIR, spill volumes and GHG emissions (including targets for CO2e and methane emissions). In early 2022, we developed an operations EHS Dashboard that provides nearly real-time tracking of SM Energy’s safety and environmental performance and is available to all employees and regularly reported to the Board of Directors. ESG performance metrics for emissions, safety and spills also factor into SM Energy’s performance-based long-term incentive compensation grants made to the executive team and qualifying employees.

As part of our commitment to environmental stewardship, SM Energy is a leader in transparency of information and disclosure. In 2020, SM Energy initiated participation in the Carbon Disclosure Project (CDP) and in the publication of Sustainability Accounting Standards Board (SASB) metrics for oil and gas exploration and production companies. In 2021, we added disclosure in the Task Force on Climate-Related Financial Disclosures (TCFD) framework. In addition, SM Energy continues to participate in the improvement and benchmarking efforts of the American Exploration and Production Council (AXPC) whose membership is comprised of 34 of America’s premier independent natural gas and oil exploration companies. SM Energy is also a member of the American Petroleum Institute (API) Environmental Partnership.

Oversight and Compliance

Codes, guidelines, policies and regulations to which SM Energy operations meet or exceed compliance include:

U.S. Fish & Wildlife Endangered Species Act and Migratory Bird Treaty Act (MBTA) regulations; MBTA includes implementation of U.S. Fish & Wildlife-approved Corporate Avian Protection Plan
EPA SPCC regulation
Railroad Commission of Texas (RRC) and Texas Commission on Environmental Quality (TCEQ) spill reporting/remediation and waste regulations
EPA & TCEQ air quality regulations
Texas Department of Health chemical inventory reporting
TCEQ and Texas Water Development Board for South Texas Rio Grande water use
Produced Water; no surface discharge, if not recycled, injected in RRC-regulated saltwater disposal wells
RRC Regulation: Reporting of hydraulic fracturing chemicals to Frac Focus

API Environmental Partnership

The API Environmental Partnership, an organization comprised of companies in the U.S. oil and gas industry committed to continuously improving the industry’s environmental performance and collaborating with one another to achieve the best results. The API Environmental Partnership’s initial focus is on environmental technologies that are technically feasible, commercially proven, and operationally successful in achieving significant emissions reductions. It provides a forum for participants to share information, best practices, and technological advancements to help reduce emissions.

SM Energy is committed to continued learning about the latest innovations and practices that can further reduce our environmental footprint. The API Environmental Partnership is about taking action and has developed six Environmental Performance Programs; SM Energy participates in four: the Pneumatic Controller Program, the Manual Liquids Unloading Program, the Leak Detection/Repair Program, and the Flare Management Program.

Learn more about The API Environmental Partnership at https://theenvironmentalpartnership.org/