Chevron over allocated carbon allowance due to reporting error

07 February 2014 17:40 Source:ICIS

US energy company Chevron received additional free California carbon allowances (CCAs) as a result of inaccurately reporting data and was not forced to surrender them back when it was fined for the infraction, the Air Resources Board (ARB) told ICIS this week.

An error in reporting the 2011 energy intensity index for its El Segundo refinery caused Chevron to receive too many free allowances, the company said in November in its quarterly financial results. The index − which compares actual energy consumption for a refinery with the “standard” energy consumption for a refinery of similar size and configuration − is used by ARB to work out how many free CCAs a plant is entitled to receive.

A spokesman for California cap-and-trade regulator ARB told ICIS on Wednesday that Chevron did not have to surrender these allowances as part of a settlement approved last month, which included a $364,500 fine ( see EDCM 28 January 2014 ).

ARB said the board could not release further details because of its confidential business information policy, which restricts it from discussing information about allocation, auctions or purchases.

Chevron did not respond to ICIS’s request for comment about the over allocation of allowances.

Along with its fine for its El Segundo Refinery, Chevron was also fined $328,500 for late reporting of emissions from its San Joaquin Valley oil fields. Southwest Gas Corporation was fined $300,000 too for late emissions reporting.

Nine other companies, including Exxon Mobil and Pacific Gas & Electric, were fined nearly $300,000 overall in July 2013 for a similar infraction. Dan X McGraw

By Dan X. McGraw