BP to more than double renewable diesel production at Cherry Point refinery
By Sourced Externally
October 6, 2021
BP will spend $269 million at the Cherry Point refinery in Whatcom County to produce more renewable diesel, a biofuel, and make other improvements that will reduce greenhouse gas emissions by about 7%, according to a corporate statement.
The investment comes as BP, one of the world’s largest oil companies, has been under increasing scrutiny for its historic role in producing, refining and marketing fossil fuels that drive climate change.
BP has launched an effort to reduce corporate greenhouse emissions to net-zero by 2050 and to achieve a 50% reduction in the carbon intensity of BP products by that date.
In Washington, Cherry Point is the state’s largest oil refiner, and in 2019 it ranked as the state’s second-largest facility emitting greenhouse gas emissions, trailing only the TransAlta coal plant in Centralia.
The new investment will be funneled into three projects and create 300 temporary jobs during the next three years, according to the company statement:
$169 million to improve the efficiency of the refinery’s hydrocracker, where heavy oils are processed into gasoline, diesel and jet fuel. The project will cut the use of hydrogen, which is now made from natural gas, and also reduce the need for heat from gaseous fuels that generate carbon emissions.
$55 million to improve a cooling water system. This will enable the refinery to generate fewer light hydrocarbons that give off carbon emissions as they are burned in heaters and boilers.
$45 million to more than double the processing capacity of Cherry Point’s renewable diesel operations, which converts tallow and vegetable oil into fuels that can be substituted for diesel made from crude oil. The renewable diesel-production capacity would rise to 2.6 million barrels annually. This production could reduce carbon emissions from the refinery’s diesel output by 400,000 to 600,000 tons annually, according to a corporate estimate.
“How much renewable diesel we actually make day in and day out depends on the market,” said Tom Wolf, a BP senior government relations manger for the U.S. West.
BP first began producing renewable diesel in 2018, and the output now heads south to Oregon and California, where state laws require marketers — including BP — to lower the carbon emissions from their products.
Washington’s Legislature earlier this year passed clean-fuels legislation that sets out a timetable for reducing carbon emissions from the transportation fleet. That law — once it takes effect in 2023 — is expected to result in some of the Cherry Point renewable diesel being sold in Washington.
The clean-fuels legislation gives BP a financial incentive to improve Cherry Point operations. A section of the law enables BP to earn credits for refinery spending, which then could be marketed to other fuel producers who need to cut carbon emissions
The state Legislature earlier this year also passed the Climate Commitment Act that will require a steady reduction in statewide greenhouse gas emissions intended to bring them down to net zero by 2050.
Major greenhouse gas polluters will have to cut these releases, or purchase allowances. But under one section of the law, BP and other crude refiners are designated as “trade-exposed industries” and will receive some pollution allowances for free, which would help insulate them from the financial costs of compliance.
Wolf said that the investments at Cherry Point could help the BP get ahead of its carbon reduction and enable the company to bank, trade or sell allowances.
“The Climate Commitment Act rewards us for that. So, it’s not just a stick. It’s also a carrot, Wolf said. “We were doing this anyway … but there’s no doubt that it (the act) makes it even better.”
In 2018, BP spent nearly $13 million to defeat Washington Initiative 1631, a carbon- pricing ballot measure the company criticized — in part — because pollution fees would apply to oil refiners but exempt many other polluters.
After that initiative was defeated, BP emerged as an influential player in Olympia as the Legislature wrestled with how to reduce carbon pollution, and the corporation was a high-profile supporter of the Climate Commitment Act.
BP’s conduct, over time, on the climate-change front are part of an investigation now underway in Congress by the U.S. House Oversight and Reform Committee that focuses on disinformation campaigns.
David Lawler, BP America’s chief executive officer, was asked to testify at an Oct. 28 hearing scheduled U.S. House Oversight and Reform Committee, according to a Sept. 16 letter sent from the committee to Lawler by Rep. Carolyn Maloney, D-N.Y., who chairs the committee, and Rep. Ro Khanna, D-Calif., a subcommittee chair.
“We are deeply concerned that the fossil fuel industry has reaped massive profits for decades while contributing to climate change that is devastating American communities, costing taxpayers billions of dollars and ravaging the natural world,” the letter said.
BP, in a January 2021 policy statement, said that the corporation “believes the world is not on a sustainable path” and supports the goals of the 2015 Paris Agreement on climate change.
The Paris Agreement sets a target of trying to limit global warming to well below 2 degrees Celsius, which would require a rapid, global transition away from fossil fuels.