ConocoPhillips to spend $10 million on GHG offset

By OGJ editors
HOUSTON, Sept. 12 -- ConocoPhillips has agreed to spend $10 million to offset greenhouse gases (GHG) that would be created by a proposed expansion of its northern California refinery, said California Atty. Gen. Jerry Brown on Sept. 12.

"This agreement is a groundbreaking step in California's battle to combat global warming and gives the state an early edge in meeting the [GHG] reduction goals," Brown told reporters during a news conference in San Francisco.

In 2005, ConocoPhillips proposed the Clean Fuels Expansion Project involving the 120,000 b/cd Rodeo and Santa Maria refinery in California's Contra Costa County.

Project plans include a hydrogen plant to make cleaner gasoline and diesel fuels from heavy crude. The hydrogen project initially would have emitted 500,000 tonnes/year of carbon dioxide.

Brown appealed to the board of Contra Costa County, challenging the environmental documentation for the project, saying there was a failure to mitigate increased GHG emissions from operation of the hydrogen plant. The state will now withdraw its appeal, he said.

"Under this unprecedented global warming reduction plan, ConocoPhillips becomes the first oil company in America to offset [GHG] emissions from a refinery expansion project. This is a breakthrough," Brown said.

ConocoPhillips will take the following actions as part of its efforts to offset these emissions:

-- Audit all of its California refineries and identify all GHG emission sources and reduction opportunities.

-- Conduct an energy efficiency audit at Rodeo to identify feasible energy efficiency measures.

-- Fund a $7 million offset program that the Bay Area Air Quality Management District will use.

-- Fund $2.8 million for reforestation in California, with an estimated sequestration of 1.5 million tonnes of GHG over the life of the reforestation projects.

-- Fund $200,000 for restoration of the San Pablo wetlands.

-- Surrender the operating permit for the calciner at the Santa Maria unit, which ConocoPhillips estimates emits 70,000 tonnes/year of GHG.

If ConocoPhillips reduces its GHG emissions, it will get credit towards its contribution to the Bay Area Air Quality Management District offset fund.

ConocoPhillips also agrees to offset any CO2 emissions that exceed 500,000 tonnes/year from the hydrogen plant if the company decides to increase its use of hydrogen.

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