Capturing the Value of Energy Efficiency - FMA Summits Gas Oil Sands Mining 4 Marathon consumes...
Transcript of Capturing the Value of Energy Efficiency - FMA Summits Gas Oil Sands Mining 4 Marathon consumes...
Capturing the Value of Energy Efficiency
Progressive Energy, Environment & Sustainability Summit
February 23, 2011
Noel Garza
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Marathon Statistics at a Glance
Fortune 50 company
Established in 1887
4th largest US integrated oil & gas company
5th largest US refiner
Market Cap: ~$31.5 billion
2010 Revenues: $73 billion
2010 Net income: $2.57 billion
Employees: > 28,000
Headquartered in Houston, Texas
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Marathon’s Business Segments
Exploration & Production
Refining, Marketing &
Transportation
Integrated Gas
Oil Sands Mining
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Marathon consumes approximately $1.5B/yr in energy
80% natural gas
80% downstream
Using less energy
Lower costs
Projects generate solid returns
Operational Excellence
Is aligned with HES Policy
Reduces CO2e emissions
Long history of energy efficiency focus
Energy Efficiency
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Established an Energy Efficiency Leadership Team (EELT)
EELT established rules
Btu common unit
Energy Intensity not a fit for Upstream
Common methodology to measure Energy Efficiency (EE)
– Implemented projects
– Procedural changes
Established Energy Efficiency Policy
Built database to capture efficiencies
%EE improvement = % reduction in energy use (assuming constant volumes)
Set 2009 Energy Efficiency Goals
1.2 TBtu/yr Reduction in Energy Use
By year-end realized 2.6 Tbtus of savings
Energy Efficiency - In 2009
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EE Champion Downstream Refining
EE Champion Downstream Transportation & Logistics
EE Champion Downstream Retail – SpeedwaySuperAmerica
EE Champion Downstream Main Office Building Findlay, OH
EE Champion Upstream North America Production
EE Champion Upstream International Production
EE Champion Upstream Main Office Building Houston, Texas
EE Coordinator Corporate
VP Corporate HES Sponsor
HES Professional Downstream
HES Professional Upstream
Energy Efficiency Leadership Team
Each Champion leads Energy Efficiency Sub-team
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Some of our Energy Efficiency Goal Rules
1. Absolute reduction target will be set every year for each Business Unit
2. Credit annualized
3. Reductions in energy use measured in Btu/yr can be derived from less:
a) flared hydrocarbons,
b) combusted hydrocarbons,
c) vented hydrocarbons,
d) electricity consumption, and
e) utilization of steam (produced or purchased).
4. Energy reductions must be permanent
5. Projects must be verifiable
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Energy Efficiency
63
221284
0
100
200
300
Upstream Downstream Total
In T
ril
lio
ns o
f B
tu
s p
er Y
ea
rMarathon 2010 Total Energy Use
(Estimated using 2009 actuals adjusted for Garyville Expansion)
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Marathon Refinery EPA ENERGY STAR Recognition
2006
Canton
Garyville
Texas City
2007
Canton
Detroit
Garyville
2008
Canton
Detroit
Garyville
Texas City
2009
Canton
Detroit
Garyville
In 2008 and 2009, only Marathon refineries received EPA ENERGY STAR recognition.
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Energy Efficiency
1.57 1.85 1.92
6.21
3.49
8.06
0.00
2.00
4.00
6.00
8.00
10.00
Upstream Goal
Upsteam Actual
Downstream Goal
Downstream Actual
Total Goal Total Actual
In T
rill
ion
s o
f B
tus
pe
r Ye
ar
Marathon 2010 Energy Use Reduction Goals
Includes 2.7 TBtus of reductions from Refinery expansion incremental EE investments
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Marathon Energy Efficiency External Goal
2.8
5.5
8.2
10.9
13.6
8.06
10.56
0
3
6
9
12
15
2009 2010 2011 2012 2013 2014
En
erg
y S
avi
ng
s (T
BT
Us)
Years of Savings
2010 YTD EE Savings Status Relative to 5-Year External Goal
1%/yr Projected Baseline 2010 Savings 2011 Projected Savings
Includes 2.7 TBtus of reductions from Refinery expansion incremental EE investments
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$(60)
$(40)
$(20)
$-
$20
$40
$60
2009 20102011 20122013 20142015 2016 2017 2018 20192020
$ M
illio
nsIndicative Energy Efficiency Cash Flow
Represents only 2009 and 2010 Efforts
Energy Efficiency
NPV ~$192MM
IRR ~67%
Cash flow net of costs
Costs captured are those incurred solely for energy efficiency purposes
$125MM of costs (capital and expense) incurred in two year period
of which $40MM estimated for GME
Assumes $4.40/MMBtu gas & 10 year life for projects
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Energy Efficiency
2008 increase due to less refinery throughput
2009 reduction due to new production from Norwegian Upstream Asset
2010 reduction due to refinery expansion
428
433
420
411
390
400
410
420
430
440
2007 2008 2009 2010
Tho
usa
nd
s o
f Btu
s p
er B
OE
Total Marathon Energy Intensity
Estimated
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Energy Efficiency
195
836
-
200
400
600
800
1,000
2009 2010
Tho
usa
nd
To
nn
es
of
CO
2e
Cumulative Annual CO2e Emission Reductions
Estimated cumulative CO2e reductions from 2 years of energy efficiency efforts
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Marathon Energy Efficiency Examples of Business Unit 2010 Projects
Business Segment Projects
Findlay Office Complex Chiller replacement and lighting
Houston Tower Lighting and ventilation air optimization
Upstream International Production
EGLNG Advanced Process Control implementation, EGLNG Exchanger enhancement, MEGPL compressor optimization, Norway reduced flaring,
and UK compressor optimization
Upstream North America Production
Bakken advanced controls for pumping units to reduce electricity consumption, plunger lift installations, compressor optimization, low
efficiency submersible pump replacements, conversion of disposal system from high pressure to low pressure to reduce venting, and cross-linked
polymer well treatment reducing water production and handling
Downstream Refining
Canton Dehex Tower Overhead Temp Control, Canton DHT Stripping Steam Reduction, Catlettsburg improved insulation and steam system
enhancements, Catlettsburg compressor shutdowns and exchanger additions, Detroit Naptha Hydrotreater tube replacements, Garyville
heater upgrade, Robinson insulation work, and Texas City steam optimization.
Downstream Retail SpeedwaySuperAmerica
Cooler door LED lighting installations, cooler fan motor installations, and numerous other lighting upgrades
Downstream Transportation & Logistics
Towboat replacement with more efficient units, pipeline pump operation optimization, insulation work, truck replacement with units with better
fuel efficiency, terminal office roof insulation work, and operational changes to reduce fuel use.
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“…energy efficiency is the most viable, readily available and least expensive form of
new energy …”
Energy Efficiency