(4d) Analysis of Proposed GHG Legislation Impacts to the Refining Industry

It is expected that federal legislation in the Unites States will soon be enacted on greenhouse gases (GHG). House Energy committee chairmen Henry Waxman has stated that his goal is to have legislation passed by Memorial Day. President Obama has stated clearly that reduction of GHG and reduced dependence to foreign is part of his agenda in his first term. EPA chair Lisa Jackson is expected to announce the EPA will determine that endangerment is possible due to climate change from GHG which per the 2007 US Supreme Court decision of EPA v. Massachusetts will require the EPA to regulate under the Clean Air Act. And three different regional cap-and-trade markets are already established in the West Coast, Northeast, and Midwestern United States.

In this paper recently proposed and enacted legislation are reviewed, with the focus being on the Liebermwan-Warner bill from the previous Congress and the California Low Carbon Fuel Standard (LCFS). A brief overview of Life Cycle Assessment (LCA) and cap-and-trade systems are presented for information purposes. Case studies for a typical 100 MBPSD refinery are analyzed to evaluate the trends and impacts to a refinery resulting from the proposed LCFS (California) and a cap-and-trade system (Lieberman-Warner) where product emissions are included. Observations from the results of the case study results show that biofuel and/or alternative fuel solutions will be significant if proposed legislation is to be passed in its current form.