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Background: Focusing on Efficiency and Conservation
Approach: Tracking the Efficiency of All Operations
Performance: Striving for the Highest Efficiency Level
Future Goals: Aiming for Continual Improvement
Background: Focusing on Efficiency and Conservation
In addition to being an energy provider, ChevronTexaco is also an energy consumer. Like all companies, we use energy to run our operations and transport our products. Energy efficiency and conservation - on the part of ChevronTexaco, other companies and society as a whole - is essential for ensuring future access to energy at reasonable costs. Improving the energy efficiency of our operations is also one of our key strategies for managing our greenhouse gas emissions. Our focus on energy efficiency applies to all aspects of our business, from extracting oil to managing our office buildings.
Approach: Tracking the Efficiency of All Operations
To track our performance, in 1991 we established an energy usage index, now called the ChevronTexaco Energy Index (CTEI). The index measures and represents in a single figure the energy required to produce our products today compared with the energy that would have been required to produce the same products in the base year. Our operations are included in the index by multiplying an output measure closely related to energy consumption - such as cargo ton-miles for our shipping company or square foot of building space managed for our real estate company - by a unit energy consumption factor from the base period.
Each percentage point reduction in the CTEI represents approximately 10 million gigajoules (GJ) less energy consumed, and it also equals approximately US$35 million in savings for the company based on worldwide energy usage and costs in 2003 (Note: these numbers cannot be used to analyze past years' performance due to changes in businesses and activities that make up the index). In the past, CTEI covered only ChevronTexaco's North American operations. But in 2002 the index was expanded to cover our international operating companies, and by the end of 2003, it will cover all assets we operate worldwide.
We employ a full-time Corporate Energy Coordinator responsible for overseeing the company's energy measurement efforts, as well as leading Best Practice Energy Teams to expand our knowledge and practices for continually improving our energy efficiency.
We also work with others to help them improve their energy efficiency. Through Chevron Energy Solutions, a subsidiary of ChevronTexaco, we design, arrange for third-party financing and construct energy efficiency measures and cogeneration facilities for commercial, industrial and public sector customers.
Performance: Striving for the Highest Efficiency Level
ChevronTexaco's total energy consumption for the assets we operate was 825 trillion BTUs or 782 million GJ in 2002. Rather than total use data, however, the primary performance indicator we use internally is the ChevronTexaco Energy Index. The index allows us to measure the energy efficiency of our operating companies on a common basis and assess trends in efficiency improvements, rather than energy use alone.
In 2001 and 2002, our operations reached their most efficient level since the inception of our Energy Index. We steadily have improved our energy efficiency over the last decade, and in some businesses we have made dramatic progress. For example, since 1991, Chevron's North American Products business units have reduced their energy consumption index by 21 percent. This represents a nearly 2 point-per-year average improvement, compared with a 1 point-per-year average for the U.S. refining industry as a whole over that time period.
Future Goals: Aiming for Continual Improvement
Our goal is to continue to improve our corporatewide energy efficiency in the future. In 2004, we will work to better manage the factors that influence energy efficiency in the business units we have recently added to our index. ChevronTexaco's North American refining operations also have joined with other American Petroleum Institute member refining companies in committing to an industrywide 10 percent improvement in energy efficiency between 2002 and 2012.
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