This Report does not take any position in the debate over anthropogenic global warming. However, analysts and consultants preparing this study strongly advise that global refiners proactively formulate their CO₂ reduction strategies since government bodies, especially in developed nations, have enacted many climate change laws and guidelines.

Similar to the fuel reformulation regulations imposed on refiners in the last two decades, refiners who plan ahead and strategically implement tactics always benefit at the expense of less-prepared competitors. The overall scheme is how one can turn the impending challenges into opportunities in the marketplace. Furthermore, carbon management requirements could mean complete overhauls of operations ranging from types of crude feeds purchased, separation and conversion technologies being used, product slates, and utilities deployment, to existing relationships with suppliers and customers. The question is, "What will the refining business be by 2020, 2030, and 2050?" Many oil companies have already looked into this question and formulated basic strategies, as published on company websites and in recent company reports. To name a few:

ADNOC: "Overall [CO₂ emissions] reduced by 2%, which resulted from a 16% reduction in ADCO due to reduced flaring and fuel consumption, 7% reduction from GASCO, and 62% effect of GIP commissioning of Bunduq in previous year. Long-term, we can only achieve large-scale reductions of CO₂ emissions via alternative means and new technology (e.g., re-injection, sequestration, carbon capture, etc.). We are reviewing our strategic options for these."

BP: "We will participate across the hydrocarbon value chain to explore for, develop, and produce more fossil fuel resources that the world needs; efficiently manufacture, process, and deliver better and more advanced products; and be a material contributor to the transition to a low-carbon future…In Alternative Energy, we are focusing our investment activity in new energy technology and low-carbon energy businesses, which we believe will provide long-term options to meet energy demand and provide BP with significant long-term growth potential. These are wind, solar, biofuels, and carbon capture and storage (CCS)."

ExxonMobil: "Remained on target to improve energy efficiency by at least 10% between 2002 and 2012 across our worldwide refining and chemical operations…Reduced upstream hydrocarbon flaring by about 30%…Established flare management protocol in Nigeria, Angola, and Malaysia to rigorously monitor and manage flare events…Continued to make energy efficiency improvements both internally and for our customers…Added 125 MW of electric capacity through the startup of new, energy-efficient cogeneration facilities in Antwerp, Belgium."

Japan Energy: "We are making significant efforts to raise awareness of promoting energy savings and reducing environmental impact, while at the same time proactively installing and upgrading equipment at refineries and other production facilities for greater energy efficiency."

Royal Dutch Shell: "Our focus on managing CO₂ emissions remained strong. We continued to reduce the greenhouse gas emissions from the facilities we control or operate. These emissions have fallen by more than 30% since 1990, largely because of operational improvements like reduced flaring. We are involved in a number of demonstration projects for technology to capture and store CO₂ safely underground, including the first research pilot in Europe to inject CO₂ onshore. We would like these projects to move ahead faster and are working with governments to help them put the policies and incentives in place to speed up the development of this critical technology."

StatoilHydro: "Carbon dioxide emissions in 2008 have been as expected and approximately the same [as] in 2007. Carbon dioxide emissions decreased from 14.6M mt in 2007 to 14.4MM mt in 2008. Entering the production phase at Snøhvit at the beginning of the year caused increased emissions, while planned maintenance during the summer at several EPN installations reduced emissions. There has been a small increase in CO₂ emissions in NG and a small decrease in CO₂ emissions in M&M [manufacturing and marketing] due to planned maintenance and closure of plants."

Suncor Energy: "[We] established a team of senior leaders to identify the best opportunities for improving energy efficiency and for reducing greenhouse gas emissions across our operations. We continued to investigate and advance potential emissions-reducing technologies, including carbon capture and storage."

Total: "To reduce our greenhouse gas emissions, for example, we are working to gradually eliminate flaring of associated gas in our oil production operations and to increase the energy efficiency of our processes through sustained capital spending. In 2009, we'll be starting up a commercial carbon-capture-and-storage (CCS) pilot in Lacq, France. This is genuinely critical research: keep in mind that, according to the Intergovernmental panel on Climate Change (IpCC), CCS could eliminate 20-40% of global carbon emissions."

Valero Energy: "[We will] continue to improve energy efficiency and conservation at our facilities, continue to pursue recovery projects that will help mitigate CO₂ emissions, include 'carbon costs' in the financial evaluation of and decision-making related to strategic capital projects, [and] evaluate low-carbon opportunities for the production of transportation fuels, electricity, and chemicals."

Unfortunately, the majority of the information provided by these companies has been deemed vague, and as a result, is not considered to be very useful for our clients. Therefore, this section of the Report is devoted to identifying and analyzing company positions, benchmarking the industry norms, and recommending the directions our clients should take to stay ahead of the competition and sustain their businesses while achieving national energy security and environmental goals. To complement this discussion, the study also includes the results of a recent global refinery survey on carbon management strategies. So far, we have received responses from refiners around the world. The questionnaire is extensive, covering company views on carbon cap and trade vs. carbon tax, energy management and efficiency approaches, power production and cogeneration, goals for adopting renewable energy sources, plans for carbon capture and storage, and more.