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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