Climate Change Data

Environmental Metrics

ESG Focus Areas

• environmental management
• employee health and safety
• workforce management and equality
• community and landowner engagement
• strong corporate governance and ethics

Environmental Achievements

• Converted from a business trust to a Delaware corporation in January 2021, providing enhanced governance to the Company’s stockholders.
• Increased the electrification of the Company’s water assets in an effort to reduce costs and mitigate the overall emission profile of the Company by reducing reliance on diesel generators. Cumulatively through December 31, 2023, TPL has spent $15.8 million of capital on electric infrastructure.
• Initiated energy tracking in 2020 to monitor and identify trends in energy consumption and sourcing.
• Employed practices for the tracking and monitoring of all spills, regardless if they are within or outside of regulatory reporting requirements. We had zero spills of produced water in 2023 and 2022.
• 2023 Scope 1 emissions declined 14% from 2021 levels due to lower fuel consumption as a direct result of electrification of water facilities

Social Achievements

• Prioritizing the health and welfare of TPL’s workforce.
• Partnered with oil & gas operators on the Company’s surface estate to collectively discuss and manage ESG risks. Partnership opportunities included: developing renewable energy infrastructure across the Company’s land, developing water infrastructure to support the reuse and recycling of produced water—a critical response to climate change, partnering to develop innovative technologies that support emissions management, and more.

Governance Achievements

• Instituted a governance framework that includes oversight and stewardship of the Company’s ESG strategies. The Nominating and Corporate Governance Committee reviews the Company’s policies and programs concerning corporate social responsibility, including ESG matters, with the support of the Audit Committee and the Compensation Committee, where appropriate.

Climate Goals & Targets

Environmental Challenges

• Lower average commodity prices during 2023 compared to 2022.
• Reduced development pacing and declines in expenditures by customers in response to varying industry or global circumstances.
• Pricing pressure driven by new competition in the water services market.
• Volatile and/or unexpected operating and maintenance costs in the water services market.
• Increased regulation, including with respect to environmental and geological uses and impacts on industry operations.
• Uncertainty with outsourced 3rd party provider(s) providing water treatment services.
• Supply shortages and/or price increases driven by the increased costs of materials and logistics as a result of macroeconomic conditions, including the prolonged Ukraine/Russia conflict, general inflationary pressures, labor shortages, part or equipment availability, manufacturing capacity, tariffs, trade disputes and barriers, natural disasters or pandemics and the effects of climate change.
• Supply chain issues may disrupt the operations and development activities of operators on our land, upon whom much of our revenue relies, which could negatively affect our revenues from oil and gas royalties, easements and our water offerings.
• Supply chain issues could also lead to an increase in TPWR’s operating costs and disrupt its water sourcing and treatment operations, which could further negatively affect our revenues from our water offerings.
• Due to increased seismicity in the Delaware and Midland Basins, the Texas Railroad Commission recently began implementing Seismic Response Areas (“SRAs”) limiting the permitted capacity and use of certain Saltwater Disposal Wells (“SWDs”) for the injection of produced water.
• The implementation of SRAs could limit the volume of produced water disposed on the Company’s surface within the SRAs or, in certain cases, could direct additional volumes of produced water to SWDs on the Company’s surface outside of SRAs.

Mitigation Strategies

• TPWR invested $15.2 million in projects to maintain and/or enhance water sourcing assets and acquired groundwater rights for $3.8 million to provide access to additional water volumes outside of our existing surface footprint to assist in managing fluctuations in customer demand.
• TPWR acquired a saltwater disposal (“SWD”) easement for $17.6 million. The SWD easement covers approximately 49,000 acres and provides future disposal opportunities to service injection customers seeking disposal solutions located outside of core basins.
• Adapted lead times for ordering parts and equipment to mitigate supply chain issues.
• Actively engaging with the Texas Railroad Commission and evaluating the potential effect of SRAs on the Company’s produced water royalties.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• severe storms, floods, droughts resulting in aquifer declines and other forms of severe weather

Transition Risks

• changes driven by trends such as decarbonization efforts
• shift to renewable sources of power generation
• changes in regulatory, investor, customer and consumer policies and preferences

Opportunities

• developing renewable energy infrastructure
• developing water infrastructure to support the reuse and recycling of produced water
• developing innovative technologies that support emissions management

Reporting Standards

Frameworks Used: SASB, GRI, TCFD