(91a) Analysis of Greenhouse Gas (GHG) Regulation Impacts to the U.S. Refining Industry

President Obama has stated 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, the Waxman-Markey bill that will reduce greenhouse gases (GHG) emissions was passed by the House in June 2009; the Senate has passed a similar bill (Kerry-Boxer bill) out of Energy & Environment committee. The EPA has determined that endangerment to human health and welfare exists due to climate change from GHG and is actively pursuing options to utilize the Clean Air Act for GHG emission reductions. Updated CAFÉ standards have been established that will take effect in 2016 to increase light duty vehicle efficiency to 35.5 mpg and include GHG emissions as a part of vehicle standards. Previously passed legislation from the 2007 Energy Independence Act (EIA) will also impact refiners with a mandated 36 billion gallons per year of biofuel produced by 2022 under the Renewable Fuel Standard (RFS-2).

In this paper various legislation on GHG and energy are reviewed, with the focus being on the proposed Waxman-Markey American Clean Energy and Security Act and the EPA currently proposed RFS-2 that is a part of the 2007 EIA.

A brief overview of Life Cycle Assessment (LCA) and cap-and-trade systems are presented for information purposes. Case studies for a notional 150 MBPSD refinery are analyzed to evaluate the trends and impacts to a refinery resulting from a cap-and-trade system (Waxman-Markey) where product emissions are included. Comparison of the Waxman-Markey bill to the increased CAFÉ and RFS-2 regulations is also provided. The major GHG manufacturing emissions sources of a notional refinery are identified and a preliminary discussion of potential solutions to reduce emissions including the use of petroleum coke gasification for CCS and offsetting hydrogen plant CO2 emissions is highlighted.