How will carbon emissions regulations revise energy conservation economics?
Including the cost of carbon in refinery project economics
has the potential to convert previously marginal energy
projects into more attractive options
A program directed at reducing greenhouse gas (GHG) emissions
is gaining higher interest by US public policy makers. This is
evident by the House of Representatives passing The
American Energy and Security Act (H.R. 2454) in
June 2009. The US EPA is actively evaluating avenues in which
the Clean Air Act can be used to reduce GHG emissions based on
its determination that these substances (GHGs) are an
endangerment to human health and welfare.
In H.R. 2454, individual refiners would be
responsible for GHG emissions from their manufacturing
operations plus the emissions from the combustion of the fuels
sold by the refinery. These total emissions represent about 35%
of the total US GHG inventory. However, in H.R. 2454,
the refining sector is given 2% of the
available emission allowances per year until 2025.
Result: Refiners will be required to purchase
or to find offsets for over 90% of their regulated GHG
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