Since there is a direct relation between energy usage and greenhouse gases, Sunoco experienced a 9.7% decrease in CO2 equivalents when compared with 1990, and a 0.1% increase when compared with 2004. (Click here to link to the Greenhouse Gas and Energy sections for information, particularly regarding energy conservation activities).

Both the Petroleum and Chemical industries responded in early 2003 to President Bush's Clean Skies Initiatives with voluntary commitments to reduce GHG emissions intensity. Sunoco's GHG reductions will assist in reaching both the API and ACC targets.

Although a 2002 study by the World Resources Institute concluded that, compared to other petroleum refiners, Sunoco is unlikely to be affected significantly by the economic impacts of global climate change, we continue to seek ways to reduce our energy use and greenhouse gas emissions. However, the energy-intensive processes needed to produce low-sulfur fuels are expected to offset the benefits of several years' worth of cost-effective energy efficiency projects. For this reason as well as our progress since 1990, Sunoco has declined to establish a specific GHG reduction target. We are committed to continually improve our energy efficiency performance, both on an actual and throughput basis. We also will continue to urge policy-makers to evaluate the impacts of future regulatory requirements on energy use and greenhouse gas emissions.

Sunoco is a partner in the Industrial Sector of the U.S. Environmental Protection Agency's (EPA) Energy Star program, and participates in several Climate Leaders activities. Climate Leaders is the EPA's voluntary industrial greenhouse gas (GHG) reduction program. Structured similar to the discontinued EPA Climate Wise program, Climate Leaders focuses more specifically on greenhouse gases rather than just on energy conservation.

Sunoco continues to report its annual GHG inventory in both the Annual HES and Ceres Report and through the DOE/EIA Section 1605b reporting process. As requested by President Bush, the DOE is revising the 1605b process. Sunoco is actively participating in this revision effort, working with both API and DOE/EIA to review the proposed changes.

Sunoco also has been:

• Participating in an "Energy Star" program to help develop a standa rd energy/GHG benchmarking tool for the petroleum/petrochemical industry.
• Participating in Petroleum Focus Group, through which Energy Star coordinates bringing refining industry energy conservation personnel together to share best practices.
• Attending EPA’s Climate Leaders program meetings.
• Participating in an API EHS Benchmarking group. One of the performance measures being benchmarked is GHG production. Sunoco was one of the first users of a new GHG measurement tool called SANGEA, made available to the industry by Chevron. We continue to use SANGEA to tabulate our annual GHG Inventory.

MTBE
The use of methyl tertiary butyl ether (MTBE) in gasoline increased substantially when the Clean Air Act Amendments of 1990 required that all gasoline sold in certain high-smog areas contain an "oxygenate" – a compound with oxygen in its molecular structure. The EPA's regulatory policy strongly favored MTBE over ethanol because of its transportability, its superior performance in reducing toxic air emissions and its lower volatility.

An unintended consequence of this increased use is that MTBE has contaminated some water supplies, primarily from leaking underground gasoline storage tanks. Current scientific evidence shows that drinking water containing MTBE, even at concentrations with an unpleasant odor or taste, produces no adverse health effects, with a wide margin for safety. However, because of consumer concerns and the perceived difficulty in removing MTBE from water, several states have instituted bans on the use of MTBE, and the U. S. EPA has been under the pressure to ban MTBE nationwide. As part of the Energy Policy Act of 2005 Congress approved the removal of the requirement that federal reformulated gasoline contain at least 2.0% oxygenate by weight, effective in areas outside California May 5, 2006 or 60 days after publication of EPA’s final revocation rule, whichever is later. Many refiners have already announced their intent to discontinue the use of MTBE, once the oxygenate requirement is repealed.

In place of the oxygenated fuel requirement, Congress mandated that, beginning in 2006, at least 4 billion gallons (2.78% of gasoline sales) of fuel be produced from renewable sources such as ethanol, bio-mass, etc. increasing to 7.5 billion gallons in 2012.

Sunoco is committed to being a responsible producer and marketer of fuels and intends to meet all applicable requirements.

Fuels
On December 21, 1999, the EPA issued a rule requiring the automobile and oil industries to meet tighter emission standards beginning in 2004. Automakers had to cut tailpipe emissions of nitrogen oxide gases (NOx) and other pollutants by up to 95% and oil refiners were required to lower gasoline sulfur content by 90%. Sulfur in gasoline inhibits the performance of catalytic converters. EPA projects that these changes together will result in NOx reductions of 1.2 million tons nationwide by 2010 with further reductions as more newer, cleaner cars enter the vehicle fleet.

Oil refiners must reduce sulfur from current levels to meet an annual average of 30 parts per million (ppm) with a per gallon cap of 80 ppm by 2006.
 
EPA adopted an additional rule in January of 2001 limiting the sulfur content of diesel fuel beginning in 2006. The rule is expected to pose the same implementation challenges as the gasoline sulfur rule. These factors include technology selection, effectiveness of credit banking and trading systems, timing uncertainties created by permitting requirements and construction schedules. A third rule adopted by the EPA in of 2004 will phase in limitations on the allowable sulfur content in off-road diesel fuel beginning in mid-2007. The of-road diesel rule is not expected to require significant capital expenditures by Sunoco.

For the last several years, Sunoco's internal Clean Fuels Task Force determined the gasoline desulfurization investments needed at each refinery. The Team conducted feasibility reviews, selected appropriate technology and began the necessary engineering design work so process equipment could be modified. During 2005, Low Sulfur Gasoline units were constructed and brought online at four of Sunoco’s refineries (click here for related story about these units).
 
Both the gasoline and diesel sulfur limitation rules have significantly increased capital and operating expenditures at Sunoco's refineries with capital outlays estimated to be $750 million by the time the projects are completed. The majority of the capital spending to meet these requirements has occurred, totaling $637 million through December 31, 2005.

The Energy Policy Act of 2005 also included a renewable fuel standard (RFS) for refiners beginning in 2006 and increasing to 7.5 billion gallons by 2012. Sunoco's current ethanol use will satisfy the RFS requirement for 2006.

HES Glossary
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Conversion Table
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Summary Report
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