Murphy Oil and Climate Change Climate Change Activities December 2012
Murphy Oil Corporation Climate Change Activities Murphy s emission inventory based on guidance from: World Resources Institute (WRI) World Business Council for Sustainable Development (WBCSD) California Climate Action Registry (CCAR) Environmental Protection Agency s Mandatory Reporting Rule (MRR) International Petroleum Industry Environmental Coalition (IPIECA) International Association of Oil and Gas Producers (IOGP) American Petroleum Institute (API) Key premises for Murphy s 2011 Worldwide Emission Inventory Operational Control for direct emissions owned or controlled by Murphy De minimis threshold set at less than 3% of total emissions Emissions from sold assets not included in 2011 inventory Murphy s continuing divestiture of refining assets will significantly reduce our carbon footprint by up to 34%.
Murphy Oil Corporation Climate Change Activities Climate Change Report Format Part 1-Emissions Inventory: Trends and Analysis Part 2-Initiatives to Address Scope 1 (Direct) Emissions Part 3-Comments on Climate Related Risk Issues Part 4-Murphy Organizational Structure and Activities to Manage Climate Change Issues Part 5-Links to Murphy s Worldwide EHS Policy and Climate Change Principles
Murphy Worldwide Emissions Part 1-Trends and Analysis: Executive Overview Murphy Worldwide Asset sales, decreases in production and to a lesser impact emission reduction projects resulted in a decrease in emissions from 2010 to 2011
2009 2011 CO 2 e Emissions Part 1-Trends and Analysis U.S. E&P (Onshore and Offshore) 2010 Net Emission Increases for U.S. E&P were attributable to: Production increased for the Thunderhawk Platform, as 2010 was the first full year of production. Additional production in the Eagle Ford Shale in South Texas. 2011 Net Emission Increases for U.S. E&P were attributable to: Additional production in the Eagle Ford Shale in South Texas.
2009 2011 CO 2 e Emissions Part 1-Trends and Analysis Canada Onshore 2010 Net Emission Increases for Canada Onshore were attributable to: New wells were drilled throughout 2010 (41 more than were drilled in 2009). The Tupper #1 Gas Plant underwent a plant expansion from 80 MMscfd to 115 MMscfd sales. 2011 Net Emission Increases for Canada Onshore were attributable to: Commencement of operations in the Tupper West Field.
2009 2011 CO 2 e Emissions Part 1-Trends and Analysis Malaysia 2010 Net Emission Decreases for Malaysia were attributable to: Downtime on Kikeh Floating Production Storage and Offloading (FPSO) facility in 2010. This was offset slightly by a new gas platform in Serampang Malaysia, which came online in July 2010. 2011 Net Emission Decreases for Malaysia were attributable to: Decreased production in Kikeh
2009 2011 CO 2 e Emissions Part 1-Trends and Analysis Refineries Overall Trend for the last three years is stable emissions for Refineries. Highlights of key activities over this time period were: Meraux Refinery underwent a major turnaround in 2010 Superior Refinery had a 10% increase in refinery throughput in 2010. Milford Haven Refinery had a reduced demand for refined products during 2009 and underwent a major turnaround in 2010 and the first quarter of 2011. 2011 Net Emission Decreases for Refineries were attributable to: Sale of Meraux and Superior Refineries in the U.S. UK Assets continued emission reduction projects
2009 2011 CO 2 e Emissions Part 1-Trends and Analysis Ethanol 2010 Net Emission Increases for Ethanol Production were attributable to: First full year of production at Hankinson Renewable Energy, LLC. 2011 Net Emission Increases for Ethanol Production were attributable to: First year of production at Hereford Renewable Energy.
Initiatives to Address Direct Emissions Part 2 Major Asset Initiatives Since 2000, Murphy has spent over $1.15 Billion on environmental expenditures to reduce emissions, improve technology, produce clean fuels, and increase energy efficiencies. Murphy s GHG Intensity Factor (metric tons CO 2 /thousand BOE) has decreased by 65% since 2008, for upstream operations. In 2003, Murphy completed its Clean Fuels Project at the Meraux refinery, making it one of the first refineries to produce 100% ultra low sulfur diesel for on-road use in advance of governmental regulations. Completion of underwater pipeline for capturing emissions from our Malaysia operations in 2008. Purchase of two renewable energy Biofuels (Ethanol) facilities; one in 2009 and another in 2010. Startup of our Cogeneration facilities at Milford Haven refinery in 2010. Completion of ultra low sulfur diesel projects for non-road use at Superior refinery to meet EPA regulations for small refinery deadline of June, 2010. Conducted Corporate environmental assessment of Eagle Ford production in 2011. In 2011, Installed new refinery process units to meet the Mobile Source Air Toxics (MSAT) 2 requirements to reduce benzene in gasoline.
Initiatives to Address Direct Emissions Part 2 Other Initiatives Internal Annual Worldwide GHG emissions report (since 2001). USA sites compliance with U.S. Environmental Protection Agency Mandatory Reporting Rule of Greenhouse Gases (MRR). Milford Haven refinery complying with European Union Emission Trading System (EU ETS). Compliance with EPA New Source Performance Standards (NSPS) for oil and natural gas operations. Continued emission reduction efforts : Eagle Ford Shale: Low bleed pneumatic controllers, solar pneumatic pumps, completion flow-back to flare, flares at well sites, etc. Offshore: Continued use of vapor recovery units and compressed gas for valve operation Terminals: Installation of vapor recovery units US Stations: Installation of Stage II vapor recovery units in nonattainment areas Milford Haven Refinery: Co-Generation operations and replacement of heavy fuel oil with natural gas as a fuel source
Climate Related Risk Issues Part 3 Regulatory / Legislative Risk Environmental regulations have historically been subject to frequent change by regulatory authorities and these are expected to continue to evolve in the foreseeable future. We are unable to predict Murphy s ongoing cost to comply with these laws and regulations or the future impact of such regulations on our operations. Financial Risk The company is unable at this time to predict the financial impact of climate related issues.
Climate Related Risk Issues Part 3 Marketplace Impacts Severe weather related incidents that may be due to climate change may cause disruptions to major customers or suppliers, and the company is unable to predict at this time how much impact this disruption may have to Murphy or to the industry in general. Murphy has repositioned itself to take advantage of potential climate change opportunities by acquiring renewable energy sources through the acquisition of two ethanol production facilities thereby achieving a lower carbon footprint and an enhanced capability to meet governmental fuel standards. Reputation Risks Murphy is engaged in today s global policy dialogue both nationally and internationally. Murphy as a responsible energy company recognizes the importance of environmental stewardship as a part of its mission and has implemented organizational structure, disclosure controls, and procedures to process climate-change related information.
Managing Climate Change Issues Part 4-Organizational Structure and Activities Organizational Structure Board of Directors Environmental Health and Safety Committee meets regularly and conducts an annual review of Murphy s emissions inventory, and monitors compliance with our Worldwide EHS policy and Climate Change principles. Established Corporate Director of EHS to analyze, direct, and manage Murphy s climate change activities. Established Director of Governmental Affairs who informs management of climate change developments both nationally and on the state level. Membership in trade organizations such as the National Petroleum Refiner s Association to leverage our voice along with our peers for the oil and gas industry. Members for thirteen years in the MIT Joint Program on the Science and Policy of Global Change, receiving and providing input and analysis on climate change issues.
Managing Climate Change Issues Part 4-Organizational Structure and Activities Climate Change Activities (including but not limited to the following): Ongoing compliance with Environmental Laws and Standards. Annual internal determination of GHG emissions and trends for last 11 years. Development of a 5 year carbon footprint for 2011-2015.
Worldwide Environmental, Health, and Safety Policy and Climate Change Principles Part 5 The links to Murphy s Worldwide EHS Policy and our Guiding Principles for Climate Change can be found at : www.murphyoilcorp.com/responsibility/environment/ehs.aspx www.murphyoilcorp.com/responsibility/environment/principle s.aspx