Wednesday, July 08, 2009

Oil Companies Get Weird

Climate change is doing strange things in Texas.

In the panhandle town of Sunray, Valero Energy Corporation operates an oil refinery that dates to the 1930s and is capable of processing up to 170,000 barrels of oil a day into gasoline, asphalt, and other petroleum products. The refinery is a large industrial operation that uses a lot of electricity: a typical monthly bill runs to about $1.4 million.

Strange neighbors: photo by Michael Schumacher of the Amarillo Globe News.

So Valero recently decided to upgrade the refinery with a $115 million investment that will cut its energy costs dramatically. This month, Valero began operating six wind turbines on the site, which is now also the company's first wind farm. Unlike other wind farms that sell their power into the regional power grid, this one will be primarily devoted to powering the large refinery right next door. By the end of next year, Valero plans to add another 27 turbines, which would make the wind farm capable of powering the entire refinery whenever the wind is strong (the company expects this to be the case 40-45 percent of the time).

Unlike prior efforts from Big Oil (remember the "green" gas station?), this one seems to be a legitimate business effort, not a greenwashing public relations stunt. The company's publicity for the project amounts to a no-frills corporate press release buried in the depths of Valero's web site, and little else. In a recent Wall Street Journal article, the refinery's manager dismisses warm and fuzzy motives for the project: "We didn't build the wind farm so we could get into the wind-energy business. We built the wind farm so we could support the refinery and run it more economically."

Of course, the wind farm is still being used to produce gasoline, and the combustion of refined oil for transportation accounts for nearly a third of the nation's greenhouse gas emissions. But the wind farm replaces energy that Valero had previously bought from Wyoming coal-fired power plants and had delivered over hundreds of miles of transmission lines (along with significant energy loss along the way). So, even though Valero is still manufacturing atmospheric poisons, at least they'll be burning a lot fewer atmospheric poisons in the process.

And here's another story of weird behavior from an oil company: ExxonMobil, the fossil fuel giant that's historically been the most outspoken denier of global warming (the company continues to fund global-warming-is-a-hoax conspiracy theorists at places like the Heritage Foundation) last month announced a partnership with an electric car company to make a fleet of rent-by-the-hour battery-powered cars available to the public in Baltimore.

ExxonMobil has invested $500,000 in the project, which is roughly how much money the company takes in every 45 seconds. Still, it's strange to see them investing in technology and a business model (carsharing) that are designed to reduce demand in their primary product. ExxonMobil is making a very small hedge against the risk that they'll turn into the next Chrysler or Kodak.

It's probably too soon to say for certain, but all of this seems to me to be another indicator of an unsteady climate: when even corporate oilmen from Texas start taking renewable energy technology seriously, could it mean that Hell is freezing over?

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