Third API/DOE Conference on Voluntary Actions by the Oil and

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Gas Industry to Address Climate Change September 29-30,

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2004, Arlington, Virginia

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American Petroleum Institute

2005

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Executive Summary

The Third American Petroleum Institute (API) Conference on Voluntary Actions by the Oil and Gas

Industry to Address Climate Change, co-sponsored by the U.S. Department of Energy (DOE), was

held in Arlington, VA on September 29-30, 2004. Twenty-nine speakers from industry, academia,

and government presented papers on voluntary efforts undertaken to reduce carbon dioxide and

methane emissions. In addition, 10 panelists, including representatives of non-governmental

organizations, provided perspectives on the effectiveness of U.S. voluntary action programs as

contrasted with mandatory approaches. Attachment 1 contains a glossary of terms used in this

report; Attachment 2, the Conference Agenda; Attachment 3, biographical and contact information

for the speakers; and Attachment 4, a list of conference attendees. In addition, the visuals used by

many of the speakers are posted on the API website (www.api.org) and search on “Voluntary

Actions Conference”).

Goal and Organization of the Conference

API and DOE sponsored this conference to provide a forum for API member companies, federal

and state agencies, academic and non-governmental organizations, and others to exchange

information on partnership experiences and best practices in voluntary programs to reduce

greenhouse gas (GHG) emissions, and to identify opportunities for additional efforts. The

Conference was organized into the following sessions:

Session I- Keynote Addresses

II- Public/Private Partnership Programs

III- Case Studies on Operational Processing Techniques (Upstream and Downstream)

IV- Recent Advances in Fuels, Technology and Energy Supplies

V- Carbon Capture and Sequestration Projects and Partnerships

VI- Emissions Estimating and Reporting

VII- Panel Discussion: Putting U.S. Voluntary Approaches to Address Greenhouse Gas Emissions

into Perspective.

Conference Themes

• Significant progress has been made on the voluntary efforts presented at previous Conferences:

- 100% of eligible API member companies are now enrolled in EPA’s voluntary Natural Gas STAR

program to control methane emissions from the natural gas industry.

- More than 95% of eligible API member companies have committed to API’s Climate Action

Challenge goal of improving aggregate refinery energy efficiency by 10% from 2002-2012.

- Member companies have pledged to use API’s Compendium of Greenhouse Gas Emission

Estimation Methodologies for the Oil and Gas Industries to develop Final DRAFT – February 18,

2005 greenhouse gas (GHG) inventories for their worldwide operations, and to report their U.S. GHG

emissions to API for consolidation and aggregate reporting.

- API, in partnership with IPIECA* and OGP†, has developed the Petroleum Industry GHG Reporting

Guidelines, which provide a globally consistent framework for accounting and reporting of GHG

emissions.

- The SANGEATM Energy and Emissions Estimating System, an Excel spreadsheet that uses the

Compendium methodologies and is consistent with the Guidelines, is one tool that has been made

available to carry out GHG inventory calculations.

- API member companies are improving the efficiency of their operations and reducing GHG

emissions by expanding their use of energy and GHG emissions management systems. Lessons

learned from these efforts include the importance of commitment from both senior and site

management.

- Some API companies have joined in the international partnership on Global Gas Flaring Reduction,

formally known as the World Bank/International Finance Corporation Flaring Initiative. Members of

this partnership are committed to eliminating continuous venting and flaring of natural gas unless

there is no feasible alternative.

- Partnerships between API member companies, government agencies, and academia have led to a

better understanding of carbon capture and storage (CCS) technology. Recent modeling studies

indicate that permanent storage can be achieved by injection into the proper geological formations.

Engineering studies have indicated the potential for significant cost reductions. While government

and industry see CCS as an important option for reducing carbon dioxide emissions, the public has

little awareness of this technology or its potential.

- Reports were presented on partnerships involving API member companies at MIT, Princeton,

Stanford, and University of Texas. The Global Climate and Energy Program (GCEP), a 10-year,

$225 million technology development program at Stanford University and other academic

institutions funded by ExxonMobil and other industry sponsors, first announced at the last API

Climate Change Voluntary Actions conference, now has 15 research projects underway, with more

scheduled for approval by year-end.

• DOE reported on its progress in implementing programs to achieve President Bush’s goal of

reducing the GHG intensity of the U.S. economy by 18 percent between 2002 and 2012.

- DOE is currently spending $3 billion per year on the development of lower GHG emission

technology. In a parallel effort the Climate Change Science Program is spending nearly $2 billion

per year to develop an improved understanding of climate science.

- A key part of DOE’s technology effort is its participation in the Carbon Sequestration Leadership

Forum, a collaborative effort to develop viable CCS technology initiated by the U.S., which now

includes 15 other nations and the European Commission.

- DOE is funding a wide range of programs that would reduce greenhouse gas emissions. These

include development of renewable energy, improvements in fission and fusion nuclear power

generation, reduction of methane emissions from natural gas production and use, improved energy

efficiency in both the industrial and commercial sectors, and exploration of the potential of

hydrogen fuel cells for automotive use. DOE speakers stressed that all of these technologies would

be needed, and that they were striving to achieve a balanced technology development portfolio.

- DOE expected to issue revised general guidelines and draft technical guidelines for the voluntary

reporting of GHG emissions in fall, 2004, and to initiate the revised program early in 2005. The

technical guidelines for the oil and gas industries will take into account the methodologies contained

in API’s Compendium.

• Participants in the concluding panel discussion on U.S. voluntary programs to reduce GHG

emissions agreed that these programs offered valuable lessons on the effectiveness of various

approaches to reducing greenhouse gas emissions. They also agreed on the importance of

developing new technology to cost-effectively reduce GHG emissions. However, they disagreed as

to whether voluntary programs should be seen as a step towards regulation, on the potential costs

of such regulation, and regulations’ potential to inhibit innovation.

• Primary energy demand is projected to grow by about 2 percent per year, with oil and gas

supplying about 60 percent of the increased demand. Despite the rapid growth in the use of wind

and solar energy in recent years, and projections for their continued growth in the future, these

energy sources are expected to supply less than 0.5 percent of the world’s primary energy

requirement in 2020.

• “Well-to-wheels” studies continue to indicate that advanced gasoline and diesel engine

technologies, including hybrid technology, offer the potential to significantly reduce GHG emissions

from transportation. Whether alternative fuels can provide still lower GHG emissions is dependent

on the specific processes used in their production. No single pathway offers a short-term route to

high volumes of “low carbon” fuels, and transportation may not be the most attractive use of these

fuels.