Report on

Air and Water Conservation Expenditures

of the

Petroleum Industry

in the United States

1966-1970

FEBRUARY, 1971

Based on Surveys Conducted by

The Committee For Air and Water Conservation

AMERICAN PETROLEUM INSTITUTE

Publication No. 4075

Ф

Prepared by CROSSLEY SURVEYS, INC.

During 1968, the American Petroleum Institute's Committee for Air and Water Conservation conducted a survey to determine actual air and water conservation expenditures of the U. S. petroleum industry for the two years 1966 and 1967 and estimated expenditures for 1968. A report on the results of that survey was published in August 1968.

In 1970, a second survey was made covering actual expenditures for 1968 and 1969, including estimated figures for 1970. This report combines the results of both surveys. To permit direct comparison of the data from year to year, the questionnaire format was standardized.

Completed questionnaires were received from the corporate offices of 45 companies, representing 98.3 per cent of the industry's crude oil charge per calendar day (10.7 million barrels). The reported daily industry average was 10.9 million barrels.

Of the 45 respondents, 24 reported processing 50,000 barrels or less each calendar day; 13 operated refineries with the capacity to process 50,000 to 600,000 barrels of crude daily; and 8 processed between 600,000 and 1 million barrels of crude each day.

All the questionnaires received were treated as confidential, and the individual documents were returned to the senders after compilation of the data.

DESIGN OF QUESTIONNAIRE

As will be noted in Appendix II, air and water expenditures were reported separately. These expenditures were classified as follows: Capital, Operating and Maintenance, Administrative, and Research and Development.

In addition, the air conservation section of the questionnaire requested research expenditures on vehicle emissions and various air contaminant types. Data on capital expenditures for control of various air contaminant types were also requested for comparison purposes.

Recognizing that all companies do not record costs in exactly the same manner, several guidelines were included in the questionnaire to standardize reporting. For example, 5 per cent of the total gross capital expenditures was recommended to be used for operations and maintenance in those cases where actual costs could not be supplied. Similarly, 2 per cent of the total gross expenditures was recommended for calculating the administrative costs in lieu of actual data. Each respondent was urged to report actual cost data, if such information was available from existing records, and to use the guidelines only as required.

Respondents were asked to include expenditures involving carbon black manufacturing and costs for petrochemical operations where the crude oil was used in preparing the feedstock. Since the chemical industry surveys would show the costs listed for other petrochemical operations, this information was not requested.

It should be noted that this report and the August 1968 report do not include expenditures made by the petroleum industry outside of the United States. Accordingly, this report does not reflect such costs as that of producing low-sulfur fuel oils from Caribbean sources for consumption in the United States.

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A detailed tabulation of the data appears in Appendix I of this report. Several tables have been prepared listing the various categories of expenditures for each year of the survey, as well as the total for the five years.

Total Expenditures

During the five-year period covered by this survey, the petroleum industry spent in excess of two billion dollars on air and water conservation. As will be noted in the bar graphs contained in Figure 1, total expenditures have increased an average of 20 per cent per year during the five-year period.

Total expenditures for air increased by more than 100 per cent in the five-year period. A similar increase in total expenditures for water was also observed. The detailed data on total expenditures appear in Table I, Appendix J.

The capital dollar outlay during 1966-70 amounted to more than 60 per cent of the total air and water conservation expenditures, or 1.23 billion dollars. In Figure 2, the capital expenditures for each of the five years are illustrated. Capital expenditures increased an average of 40 million dollars each year, reaching 348.5 million dollars in 1970.

Expenditures for air and water were about equally distributed each year. Additional information on capital expenditures can be found in Tables II, III and IV of Appendix I.