Nationwide LCFS would raise GHGs in US, study finds

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Aug. 5 -- Implementation of a nationwide low-carbon fuel standard (LCFS) would increase greenhouse gas (GHG) emissions by as much as 19 million tonnes/year, a new study commissioned by the National Petrochemical & Refiners Association concluded. The findings contradict claims by LCFS advocates that such a requirement would reduce GHG emissions, NPRA said.

Minneapolis-based Barr Engineering Co.’s study, which the trade association released on Aug. 3, assumed that the US would have to import more oil from overseas because an LCFS would keep US refineries from using oil from oil sands deposits in western Canada. That oil would be shipped by tanker across the Pacific to China and other Asian locations, the assumption continued.

“By denying the American people access to oil from our friendly neighbor Canada, a [LCFS] would raise fuel costs and wipe out millions of American jobs,” NPRA Pres. Charles T. Drevna said. “Now this latest study shows that a nationwide LCFS won’t reduce overall global [GHG] emissions—it will actually raise them. These findings simply reinforce NPRA’s long-held belief that a federal [LCFS] is a policy of all pain and no gain.”

Barr Engineering’s analysis compared a base-case of transport emissions associated with current Canadian-US and Middle East-China import-export patterns to a “crude shuffle” case where Middle Eastern crude replaced Canadian exports to the US and Canadian crude exports went to China instead.

It suggested that while a nationwide US LCFS would change the nation’s crude import mix, it would not alter overall crude demand worldwide. “A shift in US crude supply preferences will simply cause redirection of crude supplies elsewhere,” the study said.

Range of increase
“This analysis of the change in crude-transport-related emissions accompanying implementation of an LCFS indicates that the net effect will be a doubling of GHG emissions associated with changes in crude-transport patterns,” it continued. “It indicates an increase in global GHG emissions by 7.1-19 million [tpy], depending on the extent of resulting Canadian crude displacement.”

NPRA said additional concerns regarding US access to crude produced from Canadian oil sands have surfaced following the US State Department’s decision regarding a proposed pipeline to transport Canadian crude to US Gulf Coast refineries. The decision would allow federal agencies an additional 90 days to comment on TransCanada Pipelines Ltd.’s proposed Keystone XL project, pending the State Department’s release of a final environmental impact statement. The proposed pipeline expansion would more than double the amount of Canadian crude exported to the US.

Several regional and state LCFS initiatives are under way, including a statewide LCFS program in California established as part of the state’s AB 32 climate law, and proponents of a federal LCFS continue to seek its enactment, according to NPRA.

It said a nationwide LCFS was part of a 2008 climate change bill cosponsored by US Sens. Joseph I. Lieberman (D-Conn.) and John W. Warner (R-Va.) which was defeated. The 2009 climate change bill cosponsored by US Reps. Henry A. Waxman (D-Calif.) and Edward J. Markey (D-Mass.) originally contained an LCFS provision, but it was removed before the House approved the bill at the end of June that year, NPRA said.

In a response posted Aug. 5 on his blog on the Natural Resources Defense Council’s web site, Simon Mui said that the Barr Engineering study contains several flaws, including an assumption that all Canadian crude shipments to the US would be shipped overseas instead of just those produced from oil sands.

Once this worst-case scenario is corrected so that only an additional 6 million tpy of CO2 results from increased tanker emissions from overseas imports, he continued, an LCFS would lead to a net domestic CO2 reduction of 253 million tpy.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

SIBUR plans MTBE expansion at Togliattikauchuk

07/01/2015 Russian conglomerate OAO SIBUR Holding, Moscow, has started preparatory work for a project designed to expand production capacity for methyl tertia...

Shell makes FID on Appomattox deepwater development in Gulf of Mexico

07/01/2015 Royal Dutch Shell PLC has taken a final investment decision (FID) on the Appomattox deepwater development, authorizing construction and installatio...

Woodside-led Browse FLNG venture enters FEED phase

07/01/2015 The Woodside Petroleum Ltd.-led Browse LNG joint venture has entered the front-end engineering and design phase for a floating LNG (FLNG) developme...

Case for Keystone XL has grown stronger, TransCanada tells Kerry

06/30/2015 Canada is taking strong steps toward combating climate change, and the proposed Keystone XL pipeline crude oil pipeline remains in the US national ...

OxyChem-Mexichem JV lets contract for ethylene storage

06/30/2015 Ingleside Ethylene LLC, a 50-50 joint venture of Occidental Chemical Corp. (OxyChem) and Mexichem SAB de CV (Mexichem), has let a contract to CB&am...

Construction begins on Chinese section of Russia-China Gas Pipeline

06/30/2015

Construction has begun on the Chinese section of the Russia-China Gas Pipeline, according to China National Petroleum Corp.

RIL’s Jamnagar refinery due maintenance

06/29/2015 Reliance Industries Ltd. (RIL), Mumbai, is planning to shut down a crude unit for scheduled maintenance at its 1.24 million-b/d Jamnagar refining a...
White Papers

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected