1. Oil and gas industry input to INC-3 October 30, 2011 Brian Doll 1

2. 2 Topics What is IPIECA? How much mercury is contained in a typical crude oil? What happens to mercury when crude oil is refined? How does sulfur in crude oil help remove mercury from refinery products? What are industry good practices for managing mercury? Summary

3. 31 companies, comprising 6 largest mutinationals and 7 national oil companies representing over half of world’s oil production Global oil & gas industry principal channel of communication with the UN Helps industry improve its environmental and social performance by: –Developing, sharing and promoting good practices and solutions –Enhancing and communicating knowledge and understanding –Engaging members and others in the industry –Working in partnership with key stakeholders What is IPIECA? 3

4. How much mercury is contained in a typical crude oil? 4 Mercury presence in crude oil is extremely variable Historical data in the literature is conflicting IPIECA has undertaken a survey of 400+ global crudes and has observed a range of less than 0.5 -1,000 ppb –Mercury data not available from 3 rd party crude assay vendors –Mercury data currently available are proprietary Next Steps for IPIECA Prepare a mercury management good practice document Pursue strategy of publishing mercury data in the good practice document

5. Answer: Ad hoc IPIECA member survey* covering over 400 global crude oils found: Median Hg content = 1.3 PPB How much mercury is contained in a typical crude oil? 5

6. Answer: Ad hoc IPIECA member survey covering over 400 global crude oils found: Median Hg content = 1.3 PPB 84% of crudes were < 10 PPB How much mercury is contained in a typical crude oil? 6

7. Answer: Ad hoc IPIECA member survey covering over 400 global crude oils found: Median Hg content = 1.3 PPB 84% of crudes were < 10 PPB 13% were 10-100 PPB How much mercury is contained in a typical crude oil? 7

8. Answer: Ad hoc IPIECA member survey covering over 400 global crude oils found: Median Hg content = 1.3 PPB 84% of crudes were < 10 PPB 13% were 10-100 PPB 3% were >100 PPB How much Mercury is contained in a typical Crude Oil? 8

9. Answer: Ad hoc IPIECA member survey covering over 400 global crude oils found: Median Hg content = 1.3 PPB 84% of crudes were < 10 PPB 13% were 10-100 PPB 3% were >100 PPB How much Mercury is contained in a typical Crude Oil? 9 Less than 1% of global production volume > 100 PPB

10. % of Crudes > indicated Hg content Hg Content – Parts per Billion Mercury contents of crude oils in ad hoc IPIECA member survey 1970 range How much Mercury is contained in a typical Crude Oil? 10

11. How much mercury is contained in a typical crude oil? 11 Mercury contents of crude oils in ad hoc IPIECA member survey IPIECA range % of Crudes > indicated Hg content Hg Content – Parts per Billion Quoted 2005 range of 0.01-0.5 ppm Hg* (10-500 ppb Hg) close to industry experience, but IPIECA survey data median is lower than this range * Paragraph 16 of UNEP Report

12. Refineries convert crude oil into useful products by: –Separating, breaking down, rearranging carbon-hydrogen molecules –Removing impurities – sulfur, heavy metals such as mercury Mercury leaves a typical refinery by the following routes: What happens to mercury when crude oil is refined? 12 “Bay Area Petroleum Refinery Mercury Air Emissions, Deposition, and Fate”, June 2009, prepared for Western States Petroleum Associations by ERM-West, Inc. and Flow Science Inc. Note: IPIECA Waste Management document to be published by end of 2011

13. How does sulfur in crude oil help remove mercury from refinery products? 13 Hg and S have strong affinity Very stable, nonvolatile solid, very low solubility in water HgR-SH HgR-SH HgS Hydrocarbons containing sulfur R-SH = “Mercaptans” from Latin mercurium captans, literally, seizing mercury Sulfur = active agent in Mercury Removal Units to protect aluminum process equipment and catalysts

14. Industry experience: There is a direct inverse relationship –i.e. High Sulfur crudes are very low in mercury; high mercury crudes are low in sulfur –A typical refinery has far more sulfur than mercury, and therefore converts Hg to solid HgS which ends up in sludges (waste) What is the relationship between sulfur and mercury in oil and gas? 14 Results from the Environment Canada study enhanced with data from the public domain

15. 16 Know the mercury content of crude oil coming into and leaving the refinery Monitor worker exposure to mercury to ensure a safe workplace Use proper waste management –Treat refinery wastewater to a level consistent with its disposition –Treat or re-inject oil field produced water where high mercury levels are found Use Mercury Removal Units where appropriate to protect catalysts and aluminum process equipment from mercury attack What are industry good practices for managing mercury? 15

16. 16 Summary Mercury in crude oil is variable IPIECA ad hoc survey representing a cross section of global crude oils shows: –Range of less than 0.5 – 1000 ppb mercury in crude oil –1.3 ppb is the median mercury content –Approximately 3% of crude oils representing less than 1% of global production are above 100 ppb Refineries already remove most mercury from products as solid waste due to effect of sulfur IPIECA plans to publish a good practice document for mercury management including IPIECA survey data

17. Thank you on behalf of the IPIECA members 17

18. Back-up slides 18

19. 19 How does the processing of crude Oil compare to coal? Coal is typically burned directly – crude oil is refined Crude Oil Fuels Refining Waste 90% Hg Burning Note: IPIECA Waste Management document to be published by end of 2011 89 ppb Hg Median level - USEPA 1.3 ppb Hg Median level - IPIECA