comm-appendix-support-cross

6 February 29, 2016
In addition, while the Proponent Letter cites current and in-.process analyses by certain
companies, including BHP Billito.n, that the Proponent Letter claims are adequate analyses under
a 2 degree scenario, these analyses draw similar conclusions to the Company's 2014 Report.
For example, the BHP Biliiton "Climate Change: Poftfolib Analysis" report cited favorably by the
Proponent Letter makes similar conciusiohs as the 2014 Report when the BHP Biliiton report on
page 2 states that, "Even as the world addresses climate change, independent:experts such as
the international Energy Agency expect that fossil fuels are likely to continue to supply the
majority of the world's energy needs for decades, tp come, including in a 2 0 C world." 9 These
simjiarities support the conclusion that the Company has already substantially implemented the
essential objective of the Proposal.
Finally, page 2 of the Proponent Letter demonstrates some confusion between the
Company's use of a proxy cost of caripon over its planning horizon of up to $80 per ton in some
regions and the $2,000+ per ton estimate for achieving a low carbon scenario by 2100. The
Proponent Letter uses this superflciai numerical discrepancy between $80 and $2000 to claim
that the Company's proxy cost for carbon does not substantially implement the Proposal's
objective. However, this is an apples and oranges comparison. The $2000 per ton figure
represents a third party estimate of the approximate cost per ton of carbon dioxide in the year
2100 required to reach a 2 degree scenario using currently known technologies. By contrast, the
Company's.proxy cost of carbon, used to develop the Outlook for Energy, represents the
Company's .estimate of the cost of expected policy actions to reduce carbon emissions over the
Company's business planning horizon to 2040. which matches, the horizon requested by
Proponents. The Company is comfortable that its proxy cost of up to $80 in some regions
appropriately captures the cost of expected rising carbon restrictions through 2040, which more
than covers the approximately 16-year life of the Company's current proved reserves. 10 As such,
the Proponent Letter's claim that the Company's use of a. proxy cost of carbon is not evidence of
substantial implementation is unfounded: The Company has tied its analysis of a proxy cost of
carbon and that cost's effect on the Company's oil and gas reserves to the time period between
how and 2040, exactly as requested in the Proposal.
5. Rule i4a-8(l)
As discussed in the Company No Action Letter, should the Staff not agree with our
opinion that the Proposal can be excluded from the Company's 2016 proxy materials, the
Company does not intend to include the names of both the lead filer and the cp-fiier in its proxy
materials, btit rather will rhake information concerning the co-filer available to shareholders on
request consistent with long-standing Company practice. This approach is especially necessary
as in some cases the Company receives proposals with over two dozen co-filers. The Proponent
Letter argues that the clear discretion provided to issuers under Rule 14a-8(l) in determining how
to present proponent information in the issuers proxy statement can be rendered null simply by
proponents' purporting to include their names as part of the Proposal itself. We believe Rule
14a-8(l) is perfectly clear in allowing issuers, not proponents, to determine whether to include
proppnent information in the proxy statement or to make such information available on request.
The Company therefore reaffirms its intention, if the Proposal is included in the Company's 2016
proxy materials, to identify only the State of New York as lead filer in the proxy statement and to
9
ihttD;//www.bHDbilllton.com/--/meclia/5874999cef0a41a59403d13e3f8de4ee.ashx.
10
See footnote 4 above in this letter.
#1035354iyi1
App. 388