The global demand for energy will increase in the coming
decades, and this rising demand presents significant opportunities
for our industry. As demand increases, however, the
complexities of global climate change also pose serious
questions for the energy industry and the broader society.
At Chevron, we are working to reduce greenhouse gas (GHG)
emissions and expand our energy supply portfolio to meet
the demands of customers for affordable, reliable and lowerimpact
supplies of energy.
Our multifaceted response to climate
change involves seeking ways to reduce
GHGs from the use of fossil fuels, expanding
the use of alternative fuels and renewables,
and improving energy efficiency.
Climate Change and Chevron's Response
The Intergovernmental Panel on Climate
Change states in its Fourth Assessment
Report that most of the observed increase
in global average temperatures since the
mid-20th century is very likely due to manmade
GHGs. Chevron is working to be part
of the solution to the energy and climate
challenge facing the world. Near-term mitigation
actions, development of advanced
energy technologies for the long term,
and adaptation to the potential impacts
of climate change are needed to meet
the challenge.
Our Action Plan on Climate Change
Now in its seventh year of implementation,
Chevron's Action Plan on Climate
Change continues to guide our activities,
including emissions reduction, efficiency
improvements, research investments,
business opportunities and advocacy
positions. While we continued to grow
our business, our total GHG emissions
remained relatively flat due to the efforts
that follow.
In 2008, our total emissions were 59.6 million
metric tons, which is better than our
goal of 62.5 million metric tons.1 Our preliminary
goal for 2009 is 60.5 million
metric tons, slightly higher than 2008's
actual emissions. This goal accounts
for emissions growth from new major
capital projects and emissions reductions
from anticipated declining production
from maturing fields, continued energy
efficiency in our operations, and continued
reduction in flaring and venting. We
estimate that combustion of our products
resulted in emissions of approximately
382 million metric tons of carbon dioxide
in 20082 — about 5 percent less than the
404 million metric tons in 2007. When
compared with the International Energy
Agency's Key World Energy Statistics (2008
edition), these emissions represent approximately
1.4 percent of global CO2 emissions
from fossil fuels. Our GHG emissions intensity
in 2008 was approximately 37 metric
tons of CO2 equivalent per 1,000 barrels
of net oil-equivalent production from our
upstream operations and 36 metric tons of
CO2 equivalent per 1,000 barrels of crude
oil that was input into our refineries.
Reducing Emissions
Flaring
Routine flaring and venting of
the natural gas associated with crude oil
extraction are a significant source of our
total corporate GHG emissions. We remain
committed in our efforts to reduce routine
flaring and venting in our operations. Since
2003, we have reduced emissions from
flaring and venting by about 15 percent on
an equity basis, and we continue to work
aggressively to reduce routine flaring and
venting in our operations wherever technically
and commercially feasible.
Chevron's flaring reduction standard is
aligned with the World Bank–led Global
Gas Flaring Reduction voluntary initiative,
a public-private partnership that is
active in several developing countries
where we operate. While we have made
significant progress in reducing routine
flaring and venting from our operations,
we face many challenges, including local
security, approval delays, partner funding,
competing government investment
priorities, materials availability and the lack of infrastructure. In these limited circumstances,
flaring is currently the safest and
most feasible way to manage the associated
gas in the near term.
We are actively pursuing projects to further
address this challenging problem in
Angola, Kazakhstan and Nigeria. These
long-term projects include major processing
capacity to convert gas into liquid fuel
that can be more readily used in the marketplace,
and the commissioning of a new
pipeline that will carry natural gas from the
Niger Delta to Ghana and other markets.
Construction is completed on the pipeline
and testing is under way before the line is
put into service.
Reinjection is one option to reduce flaring
when there are suitable reservoir conditions
and when the comparatively large financial
investment is justified by the technical feasibility
and expected life of the project or the
expected duration of the need for injection.
An example of a feasible and successful
reinjection project is at the Agbami deepwater
field in Nigeria. Other projects, for
example, those that have a strong likelihood of near-term development of gas markets,
are not generally candidates for reinjection.
Carbon Sequestration
Chevron holds
large natural gas reserves in Australia
and is making major investments to
reduce GHG emissions. Our Gorgon project,
located more than 81 miles (130 km)
off the northwest coast, will produce
liquefied natural gas, a lower-carbon fossil
fuel. The project will include large-scale
reinjection and storage of carbon dioxide.
Gorgon represents the world's first
commercial-scale GHG storage project
to undergo an environmental impact
assessment including public review and
comment. In addition, Chevron and its
joint-venture partners — ExxonMobil and
Shell — committed
to public disclosure of
monitoring data from the injection project
to assist in the further development of
sequestration technology.
Improving Efficiency
Improving our energy efficiency lowers
the life-cycle emissions of our products. In
2008, we updated our energy efficiency
evaluation process to design new capital projects to optimize energy use. This allows
cost-effective conservation measures to
be part of the initial design. We incorporate
the cost of carbon emissions in our
decision-making process for capital projects.
In 2008, we initiated a major effort
to upgrade our GHG evaluation tools and
methodology, which will improve our ability
to assess the potential impact of the GHG
emissions from our proposed activities and
to identify the most cost-effective ways to
address those emissions.
As of 2008, Chevron reduced the total
energy consumption required to complete
all of its business functions by 28 percent
compared with the energy the company
would have consumed in 1992 to complete
the same business functions. In 2008,
the cost of energy to the company was
approximately $7.6 billion. For our company's
operated assets, the total energy
consumption in 2008 was approximately
914 trillion Btu. Because fuel combustion
is the largest source of GHG emissions
from our operations, improving our overall
energy efficiency represents a corresponding
reduction in our carbon emissions. We are increasingly attentive to opportunities
to save on energy costs — as seen in the
projects that follow.
As part of the upgrades planned for our
refineries in El Segundo and Richmond,
California, we proposed adding to the
existing cogeneration facilities at both
locations. Onsite cogeneration is a highly
efficient technology that replaces the need
for generating steam in a boiler and for
purchasing electricity offsite.
The Richmond Refinery is the most energy
efficient of all Chevron's operated refineries,
and the workforce is always looking for
ways to make the refinery more efficient.
Approximately one-fourth of the refinery's
annual operating costs represent fuel costs
associated with producing steam throughout
the facility. With strong support from
senior management at the site, a coordinated
team of operations, maintenance staff
and facility engineers are working together
to look for ways to optimize overall steam
use and minimize venting waste steam.
Compared with 2007, Richmond reduced
its annual use of fired steam by about
17 percent, representing significant cost
savings and the avoidance of an estimated
90,000 metric tons of GHG emissions.
Chevron Energy Solutions Co. assisted our
Richmond, California, refinery in installing
55 kilowatts of solar power generation to
help meet the facility's electricity needs
with clean, renewable energy.
We continued to improve fuel efficiency in
our shipping fleet by instituting a propeller
painting and polishing initiative on our oil
tankers. By reducing resistance across the
propeller blades, we are able to decrease
the amount of oil required to power each
tanker by approximately 24 barrels per
operating day.
We joined with the other members of the
European Petroleum Industry Association
to develop and launch an industrywide
driver awareness campaign to promote
more fuel-efficient driving habits among
Europe's motorists.
Through a variety of employee-based programs,
such as supporting vanpooling and public transit subsidies in some locations,
we encourage our workforce to reduce
miles traveled. And our recently launched
"I Will" campaign, visible to the public,
deals with energy conservation and efficiency,
sharing facts about our corporate
efforts and highlighting energy saving
measures of individuals, such as vanpooling
and unplugging appliances not in use.
Pursuing Business Opportunities and Investing in Research, Development and Technology
Chevron invests in research partnerships
to develop alternative fuels whose life-cycle
production results in less CO2 than do conventional
liquid fuels per unit of energy.
Chevron Technology Ventures is working
on a number of research projects and
partnerships to develop low-carbon fuel
from biomass.
Through our partnerships with universities,
such as the Massachusetts Institute of
Technology and the University of California
at Davis, we are supporting innovative
research in the environmental and economic impacts of climate change as well as in
energy efficiency and other strategies to
help reduce overall GHG emissions.
Chevron participates in joint-industry projects
to enable the development and safe,
widespread deployment of significantly
lower-cost carbon capture and storage
technologies. These projects draw on
the best talent offered by the participating
companies, universities, government
and private research organizations to
investigate a broad range of potential
technologies in order to commercialize
those that offer the most benefit to
the participants. Chevron actively participates
in the Cooperative Research
Center for Greenhouse Gas Technologies (http://www.co2crc.com.au) and the CO2 Capture
Project (http://www.co2captureproject.org). In
addition to financial support, Chevron
provides industry guidance, technical
expertise, and program management.
Results from these research efforts are
being integrated into Chevron's Gorgon
liquefied natural gas project in Australia
and may be considered for potential future
projects involving CO2 capture and storage.
Supporting Flexible and Economically Sound Policies
Our Seven Principles for Addressing Climate
Change summarize the fundamental
aspects of achieving a sustainable and
economically viable carbon management
program. We are actively engaged with
governments and nongovernmental organizations
in several jurisdictions currently
considering climate policies — including in
Australia, Canada and the United States (in
California and other jurisdictions) — advocating
for sound climate policy in line with
our Seven Principles.
Updated: May 2009