API Voluntary Climate Challenge Program

Addressing climate change: U.S. oil and natural gas industry answers challenge
Through its leading trade association, the American Petroleum Institute, the U.S. oil and natural gas industry has established a program to build on its previous work addressing climate change. The program is a positive response to the President’s challenge to American industry to reduce the intensity of greenhouse gas (GHG) emissions while keeping the economy growing. API’s Climate Challenge Programs feature three components.

The API Climate Action Challenge focuses on strategies for reducing emissions. It includes a commitment by API-member refining companies to improve their energy efficiency by 10 percent by 2012.

The API Climate R&D Challenge involves support for enhanced research and development leading to new and improved technologies as part of a longer-term effort to reduce or sequester GHG emissions.

The API Climate Greenhouse Gas Estimation & Reporting Challenge will implement more robust methods for calculating, reporting and tracking emissions industry-wide.

API’s Climate Challenge Programs provide a wide range of opportunities for companies to strengthen their efforts addressing climate change. However, the great diversity in size and operations of API members means that few companies will or should have identical programs. Each company that participates will tailor its activities to its own operations. At the same time, API will quickly share with members individual company successes with potential for wider application.

Climate change and the industry’s new program
Climate change is a serious issue. The build-up of greenhouse gas emissions could be affecting the world’s climate and may continue to do so. However, the severity of a future problem is unclear. Also, if serious climate problems develop, they may not occur until the end of the century or later. Finally, the costs of reducing emissions—and therefore the impacts on the economy and consumers—vary greatly depending on when and how GHG reductions are made.

Although the scientific uncertainties and potential high costs of rapidly reducing emissions argue against excessive, mandatory, near-term programs, U.S. oil and natural gas companies have long agreed that enough is known about the climate change problem to take meaningful action. The API Climate Challenge Programs represent an opportunity and commitment to build on past industry efforts addressing climate change and help achieve the President’s goals.

API Climate Action Challenge
Companies participating in the API Climate Action Challenge will develop plans to reduce, sequester, offset or avoid their greenhouse gas emissions. Refining companies agree to improve their energy efficiency by 10 percent by 2012. All companies will consider other cost-effective ways to reduce GHG intensity, including:

• Reducing methane venting and flaring from exploration and production operations.
  
  
• Expanding use of combined heat and power units at refineries and oil and gas production facilities.
  
  
• Reducing methane emissions from transportation and distribution of natural gas.
  
  
• Reducing carbon dioxide venting at amine acid gas separation plants.
  
  
• Expanding carbon capture and storage, including sequestration.
  
  
• Improving the energy efficiency of their operations.
  
  
• Increasing participation in voluntary government programs, such as Natural Gas Star and CHP Challenge.

Companies will also explore greater investment in other promising approaches for mitigating GHG emissions, including:

• Extending natural gas operations and natural gas technologies.
  
  
• Gasifying refinery residuals for use in cogeneration.
  
  
• Using alternative technologies.
  
  
• Producing alternative and advanced energy and fuel products.
  
  
• Participating in conferences and workshops to learn of other GHG reduction options.

API Climate R&D Challenge
Companies participating in the research and development challenge will include GHG control in their R&D planning. Areas of focus include energy-efficient technologies, alternative energy technologies (e.g., hydrogen, wind, solar, geothermal), alternative motor fuels and vehicles (e.g., Freedom Car and other fuel cell transportation technologies), and carbon dioxide capture technologies such as those applied to gas turbine exhaust or involving sequestration/use in enhanced oil and gas recovery.

API Climate Greenhouse Gas Estimation & Reporting Challenge
Accurate estimation of greenhouse gases is essential to managing them and judging progress, yet the requisite knowledge and tools for this, both within industry and within government, have been rudimentary and often unreliable. In developing the API Compendium of GHG Emission Estimation Methodologies over the past few years, the oil and natural gas industry has been a leader in developing truly accurate estimation tools.

Using the Compendium, oil and natural gas companies participating in API’s GHG estimation and reporting challenge will integrate GHG estimation into operating procedures and report estimates on U.S. emissions to API. API will aggregate member emissions data and report the results annually. Companies will also participate in an expanded API GHG benchmarking program, which will allow them to compare their progress with sector averages. They may also participate in a voluntary emission-reporting program managed by the U.S. Department of Energy.