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Background: Addressing a Shared Concern
Approach: Implementing a Four-Pronged Strategy
Performance: Conducting First Emissions Inventory as a New Company
Future Goals: Setting Emissions Targets
Background: Addressing a Shared Concern
One of the environmental concerns we all share is global climate change. We recognize that the use of fossil fuels has contributed to an increase in greenhouse gases - mainly carbon dioxide and methane - in the earth's atmosphere.
One of the most critical environmental challenges facing the world today is finding ways to provide and use reliable, affordable energy while reducing long-term growth in greenhouse gas emissions. Technology offers a variety of potential solutions, including efficiency improvements, CO2 capture and storage, use of biological sinks and the development of commercially viable nonfossil fuel energy systems, including the potential evolution of a hydrogen fuel-based economy.
Approach: Implementing a Four-Pronged Strategy
ChevronTexaco recognizes and shares the concerns that governments and the public have about climate change. We have developed a comprehensive program to manage greenhouse gas emissions, and it is being integrated into our business decisions. For example, since 2001 we have required our businesses to integrate greenhouse gas emissions analysis into the planning for all major capital projects.
ChevronTexaco believes that although fossil fuels are a finite resource, they will continue to meet the vast majority of global energy demand for at least the next 30 years. Energy from renewable resources, such as wind and solar, is expected to contribute a small but growing fraction to total energy sources. We invest in a variety of renewable and alternative energy technologies and believe that those energy sources will be important in the overall mix of energy for the global economy in the future. But widespread application will depend on many factors, including the rate of technological development, market acceptance and demonstration of economic viability.
In addressing climate change, ChevronTexaco works closely with governments, academic institutions, nongovernmental organizations and others to create environmentally, technically and economically sound solutions. As a company with global operations, we are respectful of the decisions made by the countries where we operate regarding the Kyoto Protocol. Our businesses work closely with each country's government to manage greenhouse gas emissions from our operations and to help our business partners and customers achieve their emissions goals.
ChevronTexaco's climate change strategy consists of a four-pronged approach:
1. Reducing emissions of greenhouse gases and increasing energy efficiency: Our goal is to reduce emissions per unit output from operations. We inventory our emissions and use innovative technologies to continually improve the energy efficiency of our existing operations, new projects and products. We are incorporating greenhouse gas emission assessments into our capital project evaluations.
The following are examples of where we have improved existing processes or deployed new technologies that have resulted in reduced greenhouse gas and other emissions:
- In Indonesia, we switched from crude oil to natural gas for firing the steam generators in the Duri Field in 1999-2000, reducing emissions of carbon dioxide by more than 1 million metric tons per year.
- In Kuwait's Wafra oil field and California's Kern River oil field, we switched to natural gas to generate electricity and steam. These moves also reduced carbon dioxide emissions by more than 1 million metric tons per year.
- We have a number of projects under way that will significantly reduce routine flaring of gas in our international upstream operations.
- In the United States, ChevronTexaco participates in cogeneration projects that, together, produce enough electricity to power more than 1 million homes. For example, two cogeneration facilities in Kern County, California, with their high generating efficiencies as compared with conventional gas-fired simple-cycle power plants, provide 600 megawatts of electricity while emitting substantially less carbon dioxide.
- ChevronTexaco participates in the United States Environmental Protection Agency's (EPA) Natural Gas Star Program to reduce methane emissions. In 2003, the EPA awarded ChevronTexaco a Certificate of Achievement for its continuing accomplishments, citing the company for "aggressively reducing methane emissions and helping lead the way to reducing climate change impacts." Our U.S. upstream operating company removed a volume of emissions equivalent to planting more than 1.9 million acres of trees or taking more than 1.4 million cars off U.S. highways for one year. As separate companies, Chevron and Texaco were members of the upstream Star program since its inception in 1995. Both companies previously were recognized as "partners of the year."
2. Investing in research, development and improved technology: We invest in research to improve understanding of global climate change issues, identify mitigation strategies and improve the cost- effectiveness of mitigation technology. We develop and apply cost-effective technologies that reduce the carbon emissions of producing, delivering and consuming our products. For example:
- ChevronTexaco, along with several other companies and U.S. government agencies, co-funds the work of the Massachusetts Institute of Technology Joint Program on the Science and Policy for Global Climate Change.
- ChevronTexaco is a member of or supports a variety of CO2 capture and geologic storage initiatives designed to develop these promising technologies. Examples include:
- Global CO2 Capture Project;
- GEOSEQ geologic sequestration project, a joint venture between three U.S. National Laboratories;
- GEODISC, which is run by the Australian Petroleum Cooperative Research Centre to study long-term CO2 storage;
- the Weyburn Project, a Canadian government-industry initiative also focusing on geologic sequestration.
We also have gained operational experience with CO2 capture and storage. For example, we have been reinjecting CO2 at the Rangely, Colorado, field since 1986 for the purpose of enhanced oil recovery. Since that time, we estimate more than 19 million metric tons of CO2 have been stored.
3. Pursuing business opportunities in promising, innovative energy technologies: Our research and business units are evaluating and investing in advanced energy technologies that have the potential of being commercially viable and beneficial to the environment.
4. Supporting flexible and economically sound policies and mechanisms that protect the environment: We respect the varied views of partner nations on this complex issue. We assist in government policy development and decision-making on energy issues and participate constructively in dialogue with a broad range of stakeholders on climate change issues. We support the development and use of international mechanisms such as emissions trading, Clean Development Mechanism and Joint Implementation, which provide flexible, market-based, economically sound means to reduce emissions.
ChevronTexaco has established an internal Climate Change Steering Council consisting of senior managers from our business units, as well as technology experts. The Steering Council oversees the deployment of ChevronTexaco's climate change strategy, coordinating information and best-practice sharing, and reviewing and revising the strategy. The Steering Council also has formed several project teams to develop recommendations on specific issues related to climate change, such as emissions trading and management of greenhouse gases in capital projects.
Performance: Conducting First Emissions Inventory as a New Company
In 2002, we implemented our SANGEATM Energy and Emissions Estimating System to compile our first corporatewide greenhouse gas emissions inventory. For 2002, our total net emissions were approximately 60 million metric tons of CO2 equivalents for all businesses and operations we have financial interests in, based on its equity share in those businesses and operations. These emissions are roughly equal to the total greenhouse gas emissions from the countries of Austria or Singapore. Eighty-seven percent of our emissions are CO2 and 13 percent are methane, with trace amounts of nitrous oxide.
We recognize that in addition to the greenhouse gas emissions generated by our operations, the use of our products as fuel contributes to worldwide greenhouse gas emissions. According to the Coalition for Environmentally Responsible Economies (CERES), a U.S.-based environmental organization, our oil and gas production in 2002 was the source of 415.2 million tons of end-use CO2 emissions by our customers, equal to approximately 1.7 percent of global emissions from fossil fuels.
Future Goals: Setting Emissions Targets
Beginning in 2003, ChevronTexaco will develop a consistent internal metric for tracking greenhouse gas emissions on a per-unit-of-output basis and will make preliminary emission forecasts. We will establish emissions goals across our company in 2004. These goals will apply to our upstream, downstream and power and gasification operating companies and, where possible, joint ventures and partially owned subsidiaries. Also beginning in 2003, we will initiate an independent third-party review of our emissions management system, leading to an audited greenhouse gas emissions inventory that will ensure a strong foundation for our emissions management program. |
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