Climate Change and Hydrocarbon Sector

1. Climate Change andHydrocarbon Sector Presentation by Sanjoy Dasgupta, DGM (S&EP), Indian Oil Corporation Limited, New Delhi Energy and Climate Summit -2009  “Meeting New Challenges” 4 February 2009 New Delhi

2. GLOBAL WARMING • Solar energy arrives at Earth from sun in the form of short wavelength radiation. • Earth sends 30% of this energy back to space in the form of long wavelength, infra-red radiation. • Most of the infra-red radiation emitted by the earth's surface is absorbed in the atmosphere by water vapour, carbon dioxide and the other “Green House Gases (GHGs)". • The concentrations of GHGs are increasing in atmosphere due to industrial/ human activities and tropical deforestation. • CO2 conc. increased from 313ppm in 1960 to 375 in 2005. This increase of GHGs is reducing the rate of energy release. • Such trapping of energy leads to rise in global temperature, sea level and affecting the climate system.

3. Global surface temperature trends • Global average air temperature near the Earth's surface raised by 0.74 ± 0.18 °C (1.3 ± 0.32 °F) during the past century. • From 1920 to the present, the earth’s average surface temperature has increased by 1.4 °F. • The sharpest rise in temperature occurred between 1975 and 2005, when temperature rose steadily by about 1 °F. • This change is the largest global temperature rise witnessed so far. • The Intergovernmental Panel on Climate Change (IPCC) concludes that: • increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations, which leads to warming of the surface and lower atmosphere.

4. Global Warming and Climate Change - recent signs • In recent times numerous long-term changes in the climate have been observed, such as • extreme weather (droughts) • heavy precipitation, • heat waves, • tropical cyclones intensity, • alternations in cropping patterns, • new disease

5. Climate Change Convention • In 1992, first international Earth Summit convened to address urgent problems of environmental protection. • More than 100 heads of state attended the summit in Rio de Janeiro, Brazil. • A global convention on climate change now known as UNFCCC) signed. • Objectives of UNFCCC • Reduction of greenhouse gas (GHG) emissions to 1990 level by developed country parties by 2000 • Cope with negative effects of climate change • Developed country parties would assist developing countries in implementing the UNFCCC

6. Kyoto Protocol • 175 countries ratified the Kyoto Protocol so far. • Of these, 36 countries and the European Economic Community required to reduce greenhouse gas emissions below levels specified for each of them in the treaty. • Total cut in GHG emission at least 5 % from 1990 level (2008 – 2012) • The protocol came into force on 16th February 2005. • USA not ratified the Protocol. • Developing countries like India, China, Brazil are exempted from the GHG reduction stipulation in the Protocol.

7. Kyoto Protocol - Mechanisms • Under the Kyoto Protocol, three mechanisms enable cross-border trading in GHG emissions reduction: • International Emissions Trading (IET) Buying and selling of emission credit among developed countries. • Joint Implementation (JI) One developed country can receive emission credit for a specified project undertaken in another developed country • Clean Development Mechanism (CDM) Developed countries can participate in implementation of project activities that reduces emission of GHG.

8. Clean Development Mechanism • CDM is an instrument of cooperation between developed and developing country parties • Three main objectives: • Developed countries to invest in projects of developing countries to reduce emission. • Assist developing country to achieve sustainable development • Contribute to achieving stabilization of concentrations of GHGs in the atmosphere. • Criteria for participation: • Voluntary • Party to the Kyoto Protocol

9. International developments on emission reductions • Pressure on developing countries to commit to reduction of GHG emission during next meeting in Bali in Dec 07 • China second largest emitter of GHG • India sixth largest • India’s per capita CO2 emission 0.93 to 1.19 tons per annum as against world avg.of 3.87 • In India, energy sector contributes 55% of total emission

10. International developments on emission reductions • Significant variation in the stance of leading nations on what should follow Kyoto Protocol when that treaty expires in 2012, and in their progress towards targets for Kyoto Protocol itself. • Countries like Japan,EU and Scandinavian countries committed to GHG reduction and accepted caps • Future discussions on post 2012 regime / extension of Kyoto Protocol taking place in different Forums. • Countries that did not ratify Kyoto Protocol – including the United States – have agreed to non-binding talks on a climate-change agreement that will eventually replace Kyoto Protocol. • One such development is the Asia Pacific Partnership on Clean Development and Climate.

11. Asia Pacific Partnership on Clean Development and Climate • The Asia-Pacific Partnership on Clean Development and Climate (AP6) a non-treaty agreement among Australia, India, Japan, China, South Korea, and USA was announced on July 28, 2005 at (ASEAN) Regional Forum meeting and launched on January 12, 2006 in Sydney. • Member countries account for around 50% of the world's greenhouse gas emissions, energy consumption, GDP and population. • Unlike the Kyoto Protocol, which imposes mandatory limits on greenhouse gas emissions, this agreement allows member countries to set their goals for reducing emissions individually with no mandatory enforcement mechanism.

12. Asia Pacific Partnership on Clean Development and Climate • The Partnership will focus on: • expanding investment and trade in cleaner energy technologies, goods and services in key market sectors. • Partners have approved eight public-private sector task forces covering: • Aluminum • Buildings and Appliances • Cement • Cleaner Use of Fossil Energy • Coal Mining • Power Generation and Transmission • Renewable Energy and • Distributed Generation and Steel.

13. The Indian Context • India’s oil imports touch 70% of the total demand. • Dependence on fossil fuels is a must considering limited energy options. • Present challenge before developing nations is energy (and development) versus emissions. • India’s growing energy consumption is perceived as a major future source of global warming. • It is expected that post 2012 (end of first commitment period) global pressure will mount on India to cut its greenhouse gas (GHG) emissions.

14. The Indian Context • India’s contribution to world carbon emissions is expected to grow at an average of 3% per year until 2025, compared with 1.5% in the United States. • According to industry estimates, India’s oil consumption is expected to grow to 2.8 million barrels per day by 2010, from 2.65 million barrels per day in 2004. • The annual per capita oil consumption in the US is about 28 barrels, in India it is about 0.5 barrels. • India’s contention is "every country should have the same per capita rights to GHG emission".

15. Government of India initiative • Indian government has been taking several initiatives to contribute to the cause of emission reductions. • India has the largest number of Clean Development Mechanism projects. • Its recent initiative is the setting up of National Council on Climate Change. • The Government on June 5, 2007 announced the constitution of a high-level advisory group on climate change. • The Prime Minister's Council on Climate Change will coordinate National action plans for assessment, adaptation and mitigation of climate change. Activities proposed to be executed:

16. Government of India initiative • Afforestation of degraded forest land: India has about 6 million hectares of degraded forest land. The project is called as “Green India”. • The Prime Minister’s Office(PMO) has also mandated various Public Sector Undertakings to take up identification and development of CDM projects. • The council has been advised to carry out a review to decide upon the domestic policy on climate change.

17. Oil & Gas Sectoremissions and mitigation • Worldwide the oil & gas industry is responsible for supplying / generating / meeting 63% of the energy demand. • Oil and gas companies are taking steps to limit greenhouse gas emissions from operations and to improve customers’ ability to use the products more efficiently in the future such as: • Efficiency improvements from operations and investment in cogeneration facilities; • Research and development to commercialize innovative technologies such as fuel cells, advanced fuels and separation and sequestration of CO2 (CCS – Carbon Capture & Storage);

18. Oil & Gas Sector emissions and mitigation • Achieving greenhouse gas (GHG) reduction targets from operations by utilizing gas and reducing venting and flaring wherever possible • Participation in commercial ventures on renewable energy; and • Participation in emissions trading schemes and the establishment of internal trading schemes to seek cost-effective reductions across diverse operations. • Successful development of innovative and affordable technologies with low greenhouse gas emissions.

19. ENERGY MANAGEMENT IN IOC REFINERIES • Energy consumption in IOCL refineries • Direct fuel in process heater • Indirect fuel for raising steam and power • Energy Consumption depends upon: --- Type of crude processed • Processing schemes • Plant capacity • Equipment design • Degree of heat integration • Mode of product dispatch • Complexity of operation

20. ENERGY MANAGEMENT IN IOC REFINERIES • Based on cost / benefit analysis, energy consumption programme launched in following stages: • Improving house keeping and operating practices • Short term measures involving minor modification in existing equipment • Long term measures requiring large capital investment • Specific energy consumed per barrel of crude processed per energy factor (NRGF). Avg.NRGF in IOCL refineries has reduced from 77 to 66.7 in last 5 years • To improve ENCON performance of refineries various measures undertaken from time to time. IOCL has plans to reduce energy consumption by another 10 to 20% in future through operational improvement and technology upgradation.

21. ENERGY MANAGEMENT IN IOC REFINERIES • Carbon Dioxide Emission,MT/MT of Crude processed, reduced from 0.333 to 0.223 • Renewable Energy Projects : Setting up a Wind Power Project of 21 MW installed capacity in the state of Gujarat at a cost of Rs.131.66 crore • Use of Natural Gas • Use of hydrogen as fuel cell • Use of bio fuel

22. BIODIESEL • Biodiesel is a clean burning renewable fuel made using natural vegetable oils and fats. • Biodiesel is made through a chemical process which converts oils and fats of natural origin into fatty acid methyl esters (FAME).  Biodiesel IS NOT vegetable oil. • Biodiesel is intended to be used as a replacement for petroleum diesel fuel, or can be blended with petroleum diesel fuel in any proportion. • Biodiesel does not require modifications to a diesel engine to be used. • Biodiesel has reduced exhaust emissions compared to petroleum diesel fuel. • Biodiesel has lower toxicity compared to petroleum diesel fuel. • Biodiesel is safer to handle compared to petroleum diesel fuel. • Biodiesel quality is governed by ASTM D 6751 quality parameters. • Biodiesel is biodegradable.

23. BIODIESEL • community-based biodiesel model that maximizes the advantages of smaller scale plants utilizing feedstocks grown or collected nearby. • significantly smaller environmental footprint can be obtained by reducing the need for long distance shipping of feedstock to, and product from, a biodiesel refinery. 

24. BIODIESEL • IOC R&D has studied complete value chain of Biodiesel, initiating from plantation to field trials. Few of the major initiatives are : • DEVELOPMENT OF BIODIESEL TRANS-ESTERIFICATION PROCESS • IOC (R&D) has examined and optimized the synthetic processes for the preparation of bio-diesel from various vegetable oils; which includes oil from Rice bran, Jatropha Curcas, Palm, Sunflower etc. The process has been patented and scaled up to pilot plant level.

25. BIODIESEL • TRIALS WITH INDIAN RAILWAYS The tests have been conducted with 5%, 10% and 20% blends of Jatropha bio diesel in diesel on 16-cylinders Alco Diesel Locomotive Engine for power, specific fuel consumption, firing pressures and exhaust gas temperatures. Trial runs on Shatabdi and Jan Shatabdi express trains have been carried out successfully at 5% and 10% biodiesel. • FIELD TRIALS ON BIO-DIESEL WITH TATA MOTORS • Indian Oil, jointly with Tata Motors launched field trial run on 43 buses plied for their employees at Tata Motors in Pune in March 2005. These buses were run on 10% biodiesel-diesel blends.

26. BIODIESEL • Trials on Tata Indica and Tata LCVs were also launched at IOC R&D. Four Tata Indica Passenger Cars, one each were run on 5, 10 & 20% BD Blends (in comparison with Neat Diesel car) for 40,000 kms and thereafter Engines alongwith FIEs of these cars have been sent to Engineering Research Center of Tata Motors, Pune for inspection and Tear Down Ratings of Engine and FIE components. One Tata LCV is running on 10% BD Blend for a targeted mileage accumulation of 1 lac kms (with intermittent performance tests  at 10,000 km intervals) . • LIFE CYCLE ASSESSMENT STUDIES OF BIODIESEL FROM JATROPHA PLANT Life cycle assessment of the use of Biodiesel from Jatropha is being studied in collaboration with NREL, USA. This study will help in estimating the overall environmental impact of using Jatropha Biodiesel vis-à-vis Diesel.

27. HYDROGEN AS FUEL • Hydrogen (H2) being aggressively explored as a fuel for passenger vehicles. It can be used in Fuel Cells to power electric motors or burned in internal combustion engines (ICEs). • It is an environmentally friendly fuel that has the potential to dramatically reduce our dependence on foreign oil, but several significant challenges must be overcome before it can be widely used. • Benefits • Produced Domestically. Hydrogen can be produced domestically from several sources, reducing our dependence on petroleum imports. • Environmentally Friendly. Hydrogen produces no air pollutants or greenhouse gases when used in fuel cells; it produces only NOx when burned in ICEs.

28. HYDROGEN AS FUEL • Challenges • Fuel Cost & Availability. Hydrogen is currently expensive to produce and is only available at a handful of locationsVehicle Cost & Availability. Fuel Cell vehicles are currently far too expensive for most consumers to afford, and they are only available to a few demonstration fleets. • Onboard Fuel Storage. Hydrogen contains much less energy than gasoline or diesel on a per-volume basis, so it is difficult to store enough hydrogen onboard a vehicle to travel more than 200 miles. • Other challenges include fuel cell performance, customer acceptance, and hydrogen transport and bulk storage.

29. HYDROGEN AS FUEL • IndianOil’s R&D Centre the nodal agency of the hydrocarbon sector for ushering in Hydrogen energy use in the country. As a part of its roadmap for a Hydrogen-fuelled economy, IndianOil recently commissioned India’s first Hydrogen-CNG fuel dispensing station at its R&D Centre at Faridabad. The pilot station provides a hands-on experience with on-site Hydrogen production, storage, distribution and supply. In course of time, IndianOil, in coordination with vehicle manufacturers, will take up lab scale development of Hydogen-CNG engines. Some of the other projects identified include development of Hydrogen-powered three-wheeler and bus engines in association with SIAM (Society of Indian Automobile Manufacturers), conversion of CNG three-wheelers and buses to Hydrogen-CNG mixture and development of Hydrogen conversion kits for portable gensets.

30. ALTERNATIVE FUELS • Autogas (LPG) Autogas (LPG) as a clean-burning fuel is now available from 136 IndianOil outlets across the country. • Ethanol-blended petrol In the year 2003, a new eco-friendly fuel popularly called “Gasohol” was launched. This fuel combines petrol with 5% ethanol obtained from the sugarcane molasses available throughout the country. IndianOil’s R&D centre has established a feasibility of ethanol blending up to 10%, which is now gaining acceptance of vehicle manufacturers. India has also signed a MoU with Brazil in April 2002 for transfer of technology in blending ethanol with petrol and diesel at higher proportion.

31. ALTERNATIVE FUELS • Addition of ethanol with petrol supplies extra oxygen for complete combustion, which reduces carbon monoxide levels in auto emission and therefore, it is considered more environment friendly as it lessens air pollution. Based on successful completion of the pilot project initiated by the Ministry of Petroleum & Natural Gas, Govt. of India and studies conducted by IndianOil R&D, supply of 5% ethanol-blended petrol has been initiated in 10 States and three Union Territories in the first phase, and will be further extended to all parts of the country subsequently.

32. Thank You