Canadian and U.S. Downstream Fugitive Emission Programs November 5, 2014

• Husky Energy Global Operations

• Canadian Downstream Operations Overview

• Canadian Fugitive Emissions Management Program

• U.S. Downstream Refinery Operations – Lima Refinery, Ohio Overview

• Lima Refinery Fugitive Emissions Management Program

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Husky Energy

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Husky Energy Global Operations

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Husky Assets in Lloydminster

Ethanol Plant Asphalt Refinery and Pipeline Terminal

Upgrader

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Other Canadian Downstream Assets

Minnedosa Ethanol Plant

Hardisty Pipeline Terminal

Prince George Refinery

• Fugitive Emission Management

• Corporate procedure follows CCME Guideline

• Risk managed as part of the facilities Environmental Management System (EMS)

• Asset Integrity

• Risk Based Integrity Management (RBIM)

• Flange Management Program

• Inspection rounds

• Bolting procedure during Turnarounds

• Monitoring & Measuring (LDAR)

• Developing a new Leak Detection Management Solution (LDMS), LDAR results and reporting database

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Canadian Downstream

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Canadian Downstream

• >95% of Emissions due to leaks are from the following three components categories:

i. Pumps

ii. Valves

iii. Equipment and Piping Flange Connections.

• Pumps have the highest % leak rate (i.e. # of leaking pumps to total # of pumps)

• Block Valves and Equipment Piping Flanges and Connections contribute to majority of the leak count and total mass emission

41.7%

2.1% 4.3%

28.7%

5.7%

6.5% 11.2%

Block Valve

Compressor Seal

Control Valve

Equipment Piping Flangeand Connector

Open Ended Line

Pressure Relief Valve

Pump Seal

• 600-acre complex – refinery occupies 480 acres • Share with five other businesses

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U.S. Downstream

• 323 km south of Sarnia • Pop 40,000 (Lima) • 105,000 (Allen County)

• Four refineries in OH • Five within 200 km of

each other

Husky Lima Refinery Basics • Lima Refinery, est. 1886

• The refinery operates 24/7 with scheduled maintenance shutdowns approximately every five years

• Primary products: gasoline, jet fuel and diesel

• Lima Refinery provides 25% of gasoline consumed in Ohio

• Approximately 440 Husky and 200 contract employees

• Title V, Consent Decree, Legal and other regulatory requirements

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• Enhanced LDAR program since 2008 (consent decree) • Alternative monitoring program (quarterly vs. monthly)

• For pumps and valves:

• In 2001 18,327 quarterly monitoring events* • In 2014 26,036 quarterly monitoring events*

*initial monitors – does not include remonitors on leakers 10

U.S. Downstream

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U.S. Downstream

0.50% 0.57%

0.21%

0.32%

0.15% 0.14% 0.11% 0.11% 0.08% 0.07% 0.08% 0.09% 0.10%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

1H 2008 2H 2008 1H 2009 2H 2009 1H 2010 2H 2010 1H 2011 2H 2011 1H 2012 2H 2012 1H 2013 2H 2013 1H 2014

Refinery Wide Leak Rates (Pumps, Valves, Total)

Pumps

Valves

Total

Poly. (Total)

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U.S. Downstream

Environmental, LDAR Technicians, Process Engineering and Maintenance

Storehouse, Operations Managers, Process Operators,

Consultants, IT Department, Senior Leadership, Procurement

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U.S. Downstream

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00Cost/component monitored

Projected 2H 2014 costs

1,3-Butadiene

• Initially sampled in 1992 as part of Hazardous Air Pollutants (HAPs) program

• MDL = 500 ug/L • Results below MDL = no more sampling

• 2007 – Refinery Information Collection Request (ICR)

• submitted calculations using 1992 MDL

• 2013 – US EPA calls – ICR data shows very high 1,3-butadiene • Resampled, analyzed using current methods • NEW MDL = 5 ug/L • Results were below new MDL • Sampled two more times, both sets of results were below the new

MDL Conclusion • 1,3-butadiene not present in Husky’s U.S. Lima Refinery emissions • No further sampling is planned at this time

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U.S. Downstream

• Minimizing fugitive emissions starts with a solid asset integrity program

• LDAR is only one piece of the fugitive emission reduction strategies at facilities

• Increased carrying costs by maintaining an inventory of replacement maintenance equipment

• Identifying top emitting components which don’t meet the leak definition and prioritizing their repair based on actual leak rate (tonnes/yr) not TVA reading (ppm)

• Ohio EPA regulatory air monitoring of benzene and 1,3-butadiene below threshold values

• Repeated analytical testing shows 1,3-butadiene not to be a contaminant of concern at our U.S. refinery

• Opportunity to optimize the LDAR frequency based on achieving ALARP emissions

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Lessons Learned

Questions?

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Thank-you