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

Husky reports start of steam operations at Sunrise oil sands project

12/12/2014

Husky Energy, Calgary, reported the start of steam operations at the in situ Sunrise Oil Sands Project in northeastern Alberta.

Kearl resumes oil sands production, Imperial reports

12/09/2014 Imperial Oil Ltd., Calgary, has resumed production at its Kearl oil sands operations in Alberta after a precautionary shutdown due to a “vibration ...

Nexen starts bitumen production at Kinosis 1A in Alberta

12/08/2014 China National Offshore Oil Corp. Ltd. reported the start of bitumen production at the Kinosis 1A (K1A) steam-assisted gravity drainage (SAGD) faci...

Suncor wraps maintenance on Alberta upgrader

12/01/2014 Suncor Energy Inc. has completed 11 weeks of scheduled maintenance on one of two oil sands upgraders at its operations near Fort McMurray, Alta.

Senate debates, then barely rejects, Keystone XL approval bill

11/19/2014 The US Senate finally debated a bill authorizing construction of the proposed Keystone XL crude oil pipeline on Nov. 18 before rejecting the measur...

Cenovus receives approvals for Telephone Lake oil sands project

11/18/2014 Cenovus Energy Inc., Calgary, has received approval from the Alberta Energy Regulator (AER) and the province of Alberta for its wholly owned Teleph...

Saudis have reasons better than shale to let prices fall

11/17/2014 Only by overlooking important forces in markets and politics can anyone assert that Saudi Arabia is letting crude prices fall mainly to extinguish ...

Oil sands 2014-38 outlay to top $514 billion

11/17/2014 Total investment in Canadian oil sands projects during 2014-38 will exceed $514 billion (2013 Can.), according to the Canadian Energy Research Inst...

Imperial shuts down Kearl oil sands due to ‘vibration issue’

11/11/2014 Imperial Oil Ltd., Calgary, reported a precautionary shutdown of its Kearl oil sands operations in Alberta due to a “vibration issue” with the plan...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


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