ConocoPhillips to pay California $10 million to expand refinery

| 9/12/2007

ConocoPhillips, the fifth largest oil company in the world, will pay the state of California $10 million and take a series of steps to offset greenhouse gas emissions related to the expansion of a refinery there.

Part of ConocoPhillips’ expansion plan for its refinery at Rodeo, CA, includes the construction of a hydrogen plant that will add an estimated 500,000 metric tons of carbon dioxide emissions to the air each year. The company does not intend to increase its refining capacity, a spokesman said.

In a deal struck Tuesday, Sept. 11, with California Attorney General Jerry Brown, ConocoPhillips officials agreed to several actions for offsetting the greenhouse gas emissions.

ConocoPhillips has agreed to pay $7 million to the Bay Area Air Quality Management District for the district to administer projects and programs.

Other stipulations of the agreement call for ConocoPhillips to:

  • Audit its California refineries to identify and reduce greenhouse gas emissions;
  • Conduct an energy efficiency audit at the Rodeo facility;
  • Fund reforestation efforts to the tune of $2.8 million to offset at least 1.5 million metric tons of greenhouse gas emissions’
  • Give $200,000 to the San Pablo wetlands authority; and
  • Surrender its operating permit for equipment called a “calciner” located at its Santa Maria facility.

If ConocoPhillips reduces greenhouse gas emissions at its Rodeo plant, it qualifies for credits towards its contribution to the Bay Area Air Quality Management District.

Brown said the agreement was the first of its kind.

“Under this unprecedented global-warming reduction plan, ConocoPhillips becomes the first oil company in America to offset greenhouse gas emissions from a refinery expansion project,” Brown stated in a press release.

ConocoPhillips spokesman Mark Hughes told Land Line the company believes the agreement is good for both the company and the environment.

Hughes said the addition of a hydrogen plant will help the company take heavy gas oil – also known as bunker fuel – and convert it to gasoline and diesel.

– By David Tanner, staff writer