Capturing the Value of Energy Efficiency

Transcription

1 Capturing the Value of Energy Efficiency Progressive Energy, Environment & Sustainability Summit February 23, 2011 Noel Garza

2 Marathon Statistics at a Glance Fortune 50 company Established in th 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 2

3 Marathon s Business Segments Exploration & Production Refining, Marketing & Transportation Integrated Gas Oil Sands Mining 3

4 Energy Efficiency 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 CO 2 e emissions Long history of energy efficiency focus 4

5 Energy Efficiency - In 2009 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 5

6 Energy Efficiency Leadership Team 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 Each Champion leads Energy Efficiency Sub-team 6

7 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 7

8 Energy Efficiency In Trillions of Btus per Year Marathon 2010 Total Energy Use (Estimated using 2009 actuals adjusted for Garyville Expansion) Upstream Downstream Total 8

9 Marathon Refinery EPA ENERGY STAR Recognition Canton Garyville Texas City Canton Detroit Garyville Texas City 2007 Canton Detroit Garyville 2009 Canton Detroit Garyville In 2008 and 2009, only Marathon refineries received EPA ENERGY STAR recognition. 9

10 Energy Efficiency In Trillions of Btus per Year Marathon 2010 Energy Use Reduction Goals Includes 2.7 TBtus of reductions from Refinery expansion incremental EE investments Upstream Goal Upsteam Actual Downstream Goal Downstream Actual Total Goal Total Actual 10

11 Energy Savings (TBTUs) Marathon Energy Efficiency External Goal YTD EE Savings Status Relative to 5-Year External Goal Includes 2.7 TBtus of reductions from Refinery expansion incremental EE investments Years of Savings %/yr Projected Baseline 2010 Savings 2011 Projected Savings 11

12 Energy Efficiency $ Millions Indicative Energy Efficiency Cash Flow Represents only 2009 and 2010 Efforts $60 $40 $20 $- $(20) $(40) $(60) 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 12

13 Energy Efficiency Thousands of Btus per BOE Total Marathon Energy Intensity Estimated 2008 increase due to less refinery throughput 2009 reduction due to new production from Norwegian Upstream Asset 2010 reduction due to refinery expansion 13

14 Energy Efficiency Thousand Tonnes of CO 2 e Cumulative Annual CO 2 e Emission Reductions 1, Estimated cumulative CO 2 e reductions from 2 years of energy efficiency efforts 14

15 Marathon Energy Efficiency Business Segment Findlay Office Complex Houston Tower Upstream International Production Upstream North America Production Downstream Refining Downstream Retail SpeedwaySuperAmerica Downstream Transportation & Logistics Examples of Business Unit 2010 Projects Projects Chiller replacement and lighting Lighting and ventilation air optimization EGLNG Advanced Process Control implementation, EGLNG Exchanger enhancement, MEGPL compressor optimization, Norway reduced flaring, and UK compressor optimization 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 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. Cooler door LED lighting installations, cooler fan motor installations, and numerous other lighting upgrades 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. 15

16 Energy Efficiency energy efficiency is the most viable, readily available and least expensive form of new energy 16

17 Capturing the Value of Energy Efficiency Noel Garza