Environmental Stewardship

Our Value: Marathon is committed to minimizing environmental impacts by reducing wastes, emissions and other releases.

 

 

Environmental Stewardship Strategy

Marathon is striving to reduce its environmental impacts, while expanding its operations to meet growing energy demand. Efforts include decreasing operational use of natural resources, reducing emissions through energy efficiency improvements, and investing in new technologies and renewable energy resources.

 

Spills and Discharges

Marathon uses environmental metrics to measure performance and identify improvement opportunities.

Oil spills are a principal environmental performance indicator due to their potential impacts on the environment. To prevent spills and discharges, Marathon provides training, procedures, preventive maintenance, equipment inspections and mechanical safeguards. Investigations identify the cause of spills and discharges, and corrective actions are taken.

Marathon reports the total number of oil spills equal to or greater than 1 barrel and the total volume released from these spills on a global basis. Downstream data include only those spills equal to or greater than 1 barrel that were reportable to regulatory agencies. In 2008, Marathon's global operations experienced 57 of these spills, releasing an estimated total volume of 9,113 barrels of oil. Three spills had volumes exceeding 100 barrels and accounted for more than 90 percent of the 2008 total volume spilled.

The largest spill was 5,790 barrels of crude oil from a pipeline near Mount Erie, Illinois. Near Ashmore, Illinois, a pipeline leaked 770 barrels of ultra low sulfur diesel (ULSD). Marathon emergency response teams recovered approximately 55 percent of each spill. Environmental monitoring and remediation activities continue at each spill site.

Investigations indicated that the Mount Erie spill was caused by a rare pipeline manufacturing defect and the Ashmore spill resulted from a weld seam failure, neither of which had been identified through Marathon's pipeline integrity management program. Additional integrity testing is being performed to evaluate the Mount Erie system. A third-party review of the integrity management program has been completed and the results are being evaluated.

In Detroit, a section of pipe at the refinery leaked approximately 1,700 barrels of reformate, a gasoline component. The pipe was damaged when water froze in a seldom used section. Marathon recovered most of the reformate, remediated the site and reused the recovered product. The Company took action to prevent a recurrence in the affected pipe, inspected similar pipe in the refinery and internally shared lessons learned.

Marathon also tracks spills of produced water and any other liquid chemical. In Garfield County, Colorado, approximately 31,590 barrels of stored water containing trace amounts of hydrocarbons leaked from a synthetic-lined reserve pit due to a failure in a liner seam. Marathon used the pit to store flow-back water for reuse as a water conservation measure. Tests conducted primarily by a third party detected no contaminants in the surface waters of a nearby creek. Working with federal and state agencies, Marathon revised design criteria and inspection requirements for similar reserve pits in the region to minimize the risk of recurrence.

 

Wastes and Residual Materials

Programs for waste minimization, recycling, reuse and reclamation are developed by Marathon facilities based on their specific needs. Historically, Marathon business units have monitored their own waste disposal activities. In 2009, the Company will analyze waste management data from all business units to identify and prioritize opportunities for waste minimization.

 

Emissions

As Marathon expands its operations to meet the increasing demand for energy, its emissions will likely increase. However, Marathon is committed to minimizing all types of emissions. An evaluation of emission reduction opportunities is conducted for new facility construction and periodically for existing operations. Current reduction efforts include cost-effective energy efficiency measures; incident prevention and prudent operations to reduce flaring; and use of best control practices.

 

Greenhouse Gas Emissions

Marathon reports estimated GHG emissions using industry guidelines. Emissions are reported for Marathon-operated assets and are expressed in metric tons (tonnes) of carbon dioxide equivalent (CO₂e), a combination of carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O) and for Downstream only, sulfur hexafluoride (SF₆). Both direct (those generated onsite by Marathon) and indirect (purchased electricity and/or imported steam generated offsite by others) emissions are included.

Marathon's global 2008 GHG emissions were estimated to be 18.64 million tonnes CO₂e, reflecting a decrease of approximately 2.2 percent from 2007. Estimates for 2008 and previous years were adjusted to account for improvements in data accuracy, resulting in lower Downstream and global emissions than previously reported. Efforts to improve data accuracy and completeness are ongoing.

While Marathon does not operate the Atlantic Methanol Production Company Limited LLC or Equatorial Guinea LNG Holdings Limited (EG LNG) assets in Equatorial Guinea, the Company does have significant influence over operations and HES policies. Emissions from these assets are reported separately and are not reflected in Marathon's global emissions stated above. GHG emissions in 2008 for these assets totaled less than 3.1 million tonnes CO₂e with approximately 1.7 million tonnes attributable to Marathon's interests, a small increase from 2007 due to a full year's operation of the EG LNG facilities.

Operational and energy efficiency improvements are a key means of reducing emissions. Marathon's refineries are implementing efficiency programs through API's Climate Action Challenge to improve energy efficiency 10 percent between 2002 and 2012. The Company estimates its refineries achieved an approximate 2 percent improvement in energy efficiency between 2002 and 2008. Performance on this metric declined from the 4.3 percent improvement shown through 2007 and was negatively impacted in 2008 by reduced refinery utilization. The Company is identifying and implementing projects that provide attractive economics and environmental benefits through GHG reductions.

The Company is active in voluntary emission reduction programs, such as the Global Gas Flaring Reduction Initiative (GGFR) and Natural Gas STAR programs for producers. GGFR is a public-private partnership to reduce flaring and venting of associated natural gas. Partners in Natural Gas STAR are committed to reducing methane emissions from production operations and to technology sharing. Marathon also voluntarily participates in the Carbon Disclosure Project, providing information for institutional investors on climate change and GHGs.

In 2008, Marathon developed a corporate strategy to address carbon emissions. The strategy is designed to reduce exposure through mitigation opportunities and to guide participation in the public policy debate. The Company is evaluating long-term energy efficiency targets for all major operations and office complexes, and is building an inventory of energy efficiency projects. The Company also implemented guidelines to evaluate the cost of carbon in significant new projects and acquisitions.

 

Reducing Emissions in Norwegian Development

In the Norwegian sector of the North Sea, flaring of gas is prohibited. Marathon's Alvheim floating production, storage and offloading (FPSO) vessel has a closed flare system that ignites automatically if needed to release pressure in the system and prevent pilot/safety flaring. Through the use of this and other state-of-the-art technologies, Alvheim/Vilje is expected to have some of the world's lowest CO₂ emissions per barrel produced. On the FPSO, Marathon installed two dual fuel turbines that represent the best available technology for low nitrogen oxides (NO_X) emissions. Compared to standard turbines, these engines reduce emissions by 70 to 80 percent whether using natural gas or diesel fuel. Marathon is the first operator to install this technology on the Norwegian Continental Shelf.

 

Investing in Emerging Energy Technologies

As part of its technology strategy, Marathon invests in new and emerging technologies designed to address environmental and business challenges. The Company established an emerging technology group in 2008 to review business opportunities in alternative energy sources.

Marathon is engaged in seven projects related to CCS technology, a method of securely storing carbon that would otherwise be emitted to the atmosphere. The Company supports joint industry programs dedicated to research, such as MIT's Carbon Sequestration Initiative and the Gulf Coast Carbon Center. In 2008 Marathon joined the Plains CO₂ Reduction Partnership (PCORP), a U.S. Department of Energy project involving nine U.S. states and three Canadian provinces. Led by the University of North Dakota, the multi-year project is focused on sequestering post-combustion CO₂ from a coal-fired plant and a large gas plant.

Marathon focuses on technologies for alternative and renewable fuels that increase the diversity of supply in the U.S. The Company invests in manufacturing, blending and distributing biofuels, a growing component in the U.S. transportation fuel mix, and is a leading blender of corn-based ethanol, a primary renewable fuel in the U.S.

The Company also is investigating opportunities in biofuels produced from feedstocks that have no food value or are grown on land that cannot be used for producing food. Marathon owns a 10 percent equity interest in Mascoma Corporation, which in 2008 completed one of the largest demonstration facilities in the U.S. for converting non-food biomass into cellulosic ethanol.

 

Other Operational Air Emissions

Marathon reports other operational air emissions in accordance with government requirements. Reported criteria pollutants include NO_X, volatile organic compounds (VOCs), carbon monoxide (CO), sulfur dioxide (SO₂) and particulate matter (PM). Criteria pollutant emissions are reported one year in arrears due to regulatory reporting deadlines. In 2007, total criteria pollutant emissions for all business units (excluding SSA) totaled 57,687 tons, slightly lower than in 2006.

 

Reducing Criteria Pollutants

When the Garyville refinery expansion and Detroit refinery upgrade projects are operational, criteria air pollutant emissions will increase. To minimize these emissions, Marathon is installing state-of-the-art pollution control equipment and is shutting down or retrofitting some existing emissions sources at the refineries. The Company is voluntarily installing monitoring systems at both refineries to verify compliance with ambient air quality standards. Emissions associated with these projects were reviewed and permitted by regulatory agencies to protect air quality standards.

 

Energy Use

Marathon strives to conserve resources, reduce emissions and lower costs in its operations. In 2008, Marathon's total energy consumption was an estimated 244.9 trillion British thermal units (BTUs), representing a 1.5 percent decrease over 2007 estimated energy use.

 

Biodiversity

To protect wildlife and their habitats, Marathon uses international best practices when planning and implementing projects and operations. This includes conducting endangered species assessments as part of environmental reviews for permits.

Marathon also conducts environmental, health and social impact assessment studies (EHSIAs) to augment conservation regulations for new operations in developing countries. EHSIAs include investigations of plant and animal populations, ecosystem structures and other biodiversity issues such as preservation and continuity of habitat. For larger projects, EHSIAs are used to prepare an Environmental Management Plan that directs how environmental issues are handled for the operation and presents protection measures to be followed, including those for biodiversity.

 

Enhancing Biodiversity in the Western U.S.

In Wyoming, Marathon participates in projects to ensure that energy development is sensitive to native elk and their habitat. In one project, Marathon received permits for and installed a sub-drip irrigation system for regulated coal bed methane (CBM) produced water on a privately owned ranch and elk reserve. This irrigation method enhances elk habitat without harming crops and soils, and provides Marathon a means of CBM produced water disposal. In addition, an ongoing study in the Fortification Creek area is analyzing potential impacts of coal bed natural gas (CBNG) development on elk herds. Marathon and other CBNG producers fund the study led by federal and state regulators and the University of Wyoming.

Marathon is working to form an alliance of parties to enhance Colorado River ecosystems. The Company is a partner with The Nature Conservancy, the Tamarisk Coalition and state and federal agencies on the Colorado River Initiative to remove invasive tamarisk trees along two Colorado River tributaries. Tamarisk grows in thickets along riverbanks, where it destroys native wildlife habitat, increases flood risks and affects agricultural and recreational uses of waterways.

 

Environmental Investments and Expenditures

Marathon invests in environmental controls and improved operating procedures to minimize emissions, wastes and releases from its operations to the extent practical. In 2008, Marathon's environmental expenditures totaled $826 million, including capital expenditures of $421 million. Due to the Garyville refinery expansion and to installation of equipment necessary to meet ULSD specifications at the Canton, Ohio, refinery, capital expenditures increased by $315 million from 2007.

Environmental operation and maintenance compliance costs in 2008 were $379 million, 32 percent higher than 2007 due to increased costs associated with operating new and existing controls. In addition, environmental remediation expenditures in 2008 were $26 million, compared to $25 million in 2007.

Marathon has estimated that it may spend approximately $1 billion in refining projects from 2008 to 2013 to comply with Mobile Source Air Toxics II (MSAT II) regulations requiring the removal of significant amounts of benzene from gasoline.