Analysis of Greenhouse Gas Regulation Impacts to the U.S. Refining Industry

President Obama has stated clearly that reduction of greenhouse gases (GHG) and reduced dependence to foreign oil is part of his immediate legislative agenda. At the time this abstract is written, a bill to reduce greenhouse gases (GHG) emissions has been approved by the House Energy Committee. In addition, the EPA has announced that endangerment to human health and welfare exists due to climate change from GHG which, per the 2007 U.S. Supreme Court decision of EPA v. Massachusetts, will require the EPA to regulate GHG under the Clean Air Act. President Obama has also initiated updated CAFÉ standards that will take effect in 2016 that plan to increase light duty vehicle efficiency to 35.5 mpg and include GHG emissions as a part of vehicle standards.

In this presentation, current legislation on GHG and energy are reviewed, with a focus on the Waxman-Markey American Clean Energy and Security Act that was passed by the House Energy Committee in May and the California Low Carbon Fuel Standard (LCFS) that was approved by the California Air Resource Board (CARB) in April. A brief overview of Life Cycle Assessment (LCA) and cap-and-trade systems is presented for informational purposes. Case studies for a notional 100 MBPSD refinery are analyzed to evaluate the trends and impacts to a refinery resulting from the proposed LCFS (California) and a cap-and-trade system (Waxman-Markey) where product emissions are included. Analysis of the major GHG emissions sources of a notional refinery is identified and a preliminary discussion of some potential solutions to address these sources is discussed.