During the last two years of energy market turbulence, almost everyone has come to recognize that the US, and the rest of the world, will continue to require refineries and refined products for decades to come. It is also likely, however, that US refiners, like their European counterparts, will need to do more to reduce carbon dioxide (CO) volumes.2) and other greenhouse gases (GHGs) generated during the process of breaking down crude oil and other raw materials into gasoline, diesel, jet fuel and other valuable products. And, thanks to new federal incentives, it might even make sense for refineries to capture and sequester at least some of the CO2 they cannot avoid producing. On today’s RBN blog, we begin a series on refinery CO2 the fundamentals of emissions, the different policies that apply here in the US and abroad, and how those policies can ultimately influence refining competitiveness.
It will come as no surprise that the refining industry generates significant volumes of GHGs, including CO2, both from the refining processes themselves and from the consumption of fossil fuels needed to fuel them, just consider the large amounts of heat that must be generated for the distillation and other reactions that must occur . It is also not surprising that the refining industry, not to mention the separate but related transportation sector, which relies heavily on refined fuels, has come under increasing scrutiny regarding GHGs.
As we discuss in more detail later in this series, regulating GHG emissions from refineries is still a work in progress here and in other parts of the world where strategies aimed at mitigating emissions vary widely in scope and effectiveness. As we recently detailed in previous blogs on the topic, the US federal government has primarily sought to reduce GHG emissions through indirect methods: Renewable fuel standard (RFS) and various energy efficiency programs, as well as the adaptation of previous legislation — the Clean Air Act i Average corporate fuel economy (CAFE), among them, most of which aim to reduce the demand for refined products and, by extension, reduce the amount of refined products that need to be produced. The only federal regulation that directly affects refineries is the GHG Reporting Program (GHGRP), which since 2010 has required about 8,000 industrial and other entities that emit more than 25,000 metric tons (MT) annually to report their emissions. Such regulation, which helps quantify the extent of emissions, is likely first step towards a more informed regulation.
