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Oil sands imports’ GHGs lower than thought, report says

21 Sep 2010 19:49 (+01:00 GMT)
Oil sands imports' GHGs lower than thought, report says

Washington, 21 September (Argus) — Greenhouse gas (GHG) emissions from Canadian oil sands products imported to the US are about 6pc higher than the average crude consumed in the country — less than many commonly cited estimates, according to an analysis by IHS Cambridge Energy Research Associates (IHS CERA).

The analysis, drawn from 13 studies by government, academic and industry sources, found that the total emissions from refined products wholly derived from oil sands are 5-15pc higher than the average crude consumed in the US. But Canadian products imported into the US are often a blend of oil sands and lower carbon products that make them easier to transport, making their GHG emissions only 6pc higher than the average crude consumed in the country, the study found.

The study could have an impact on the fierce debate around the future of Canadian oil sands exports to the US. Environmental groups argue that oil sands output leads to higher emissions during production, the destruction of habitat and pollution of water supplies. The oil industry has argued that Canada is a stable source of supply, that steps are being taken to reduce GHG emissions and protect the environment, and that product emissions are not much higher when full well-to-wheels life cycle GHG emissions are taken into account.

The report, Oil Sands, Greenhouse Gases, and US Oil Supply: Getting the Numbers Right, analyzed complete life cycle emissions from the extraction, processing, distribution and combustion of the refined fuel. On this basis, it found that GHG emissions from oil sands product do not differ much from other sources of US crude imports, including crudes from Nigeria, Venezuela and some produced domestically.

“The complete well-to-wheels life cycle is crucial for making comparisons between sources of crude oil,” said Jim Burkhard, IHS CERA managing director, Global Oil. Around 70-80pc of the GHG emissions come from the combustion of the fuel in an engine so most emissions remain the same whether the oil comes from West Africa, Latin America or Canada, he said.

Other commonly cited estimates assert that the GHG intensity of oil sands is many times higher than conventional crudes. Many reasons can account for these gaps, including that some assessments are based on comparisons of GHG emissions from only part of the lifecycle — such as only the extraction phase, the report notes. To make a true comparison between sources of crude oil, “it is necessary to account for the industry average as a whole rather than any single operation,” said Jackie Forrest, IHS CERA director.

The low-carbon fuel standard (LCFS) adopted by California and British Columbia has been expected to present problems for oil sands crude, which requires a lot of heat during the production process. But the LCFS will present a challenge for any petroleum fuel since 70 to 80pc of emissions occur in the vehicle engine — out of the control of the fuel producer, the report said. “Compliance will require the addition of lower-carbon fuels, such as biofuels, electricity, or natural gas, to the transportation mix.”

Greg Stringham, vice president of markets and oil sands for the Canadian Association of Petroleum Producers, said today the industry welcomed “good science like the CERA analysis” to understand the impact on the environment. At the same time, the industry remains focused on finding new ways to reduce its environmental footprint, he said.

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