Western Oil & Gas Company: Strategic Financing for Energy Efficiency

The document details a proposed $2 million upgrade to the diesel hydro treater (DHT) motor system at Western Oil & Gas Company's Richmond refinery. Despite potential energy savings and improved reliability, the project was initially stalled by internal resource constraints, low strategic priority, and the high cost of operational downtime. To resolve this, Western partnered with Energy Services (an ESCo) and ABB Energy Capital to explore alternative financing—including internal funding, lease financing, and performance-based 'shared savings' models—while leveraging demand-side management (DSM) subsidies from Pacific Gas & Electric (PG&E).

• The proposed $2 million motor system upgrade for the diesel hydro treater (DHT) aimed to replace constant speed motors with electric variable speed drive (VSD) motors to reduce energy waste and improve process reliability.
• Internal implementation was hindered by a lack of strategic priority, lean staffing that prevented feasibility studies, and historical friction between chemical and electrical engineering teams.
• Financial constraints at the corporate level, specifically a $1 billion commitment to California clean air regulations for MBTE upgrades, crowded out non-critical capital expenditures.
• A feasibility study conducted by Energy Services estimated the project would cost $2 million and yield annual energy savings of approximately 31 million kWh, while reducing peak demand by 1 million kW per year.
• The document identifies three primary financing options: internal financing (subject to strict ROI and balance sheet scrutiny), lease financing (regular payments to a lessor), and performance-based financing (where the ESCo bears performance risk in exchange for a share of savings).

APA

Briscoe, F., Sanusi, H., & Archampong, O. (2002). Western Oil & Gas Company: Strategic Financing for Energy Efficiency. World Resources Institute. https://pdf.wri.org/bell/case_1-56978-448-8_full_version_english.pdf

Chicago

Briscoe, Forrest, Hakeem Sanusi, and Opoku Archampong. Western Oil & Gas Company: Strategic Financing for Energy Efficiency. World Resources Institute, 2002. https://pdf.wri.org/bell/case_1-56978-448-8_full_version_english.pdf.

Wikipedia

{{cite report |last1=Briscoe |first1=Forrest |last2=Sanusi |first2=Hakeem |last3=Archampong |first3=Opoku |title=Western Oil & Gas Company: Strategic Financing for Energy Efficiency |publisher=World Resources Institute |date=2002 |url=https://pdf.wri.org/bell/case_1-56978-448-8_full_version_english.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{briscoe2002western, author = {Briscoe, Forrest and Sanusi, Hakeem and Archampong, Opoku}, title = {{Western Oil \& Gas Company: Strategic Financing for Energy Efficiency}}, institution = {World Resources Institute}, year = {2002}, url = {https://pdf.wri.org/bell/case_1-56978-448-8_full_version_english.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }