IHS CERA: Oil sands GHG emissions lower than perceived

By OGJ editors
HOUSTON, Sept. 23
-- Fuels made from Canadian oil sands have lower greenhouse gas (GHG) emissions than many commonly cited estimates, said IHS Cambridge Energy Research Associates (IHS CERA) in a new analysis.

Transportation fuels produced solely from oil sands have a well-to-wheels lifecycle of GHG emissions 5-15% higher than the average crude refined in the US. That includes oil extraction, processing, distribution and eventual combustion in an engine.

But imported products—primarily synthetic crude and bitumen blends—made from oil sands has a “well-to-wheels” lifecycle GHG emissions only 6% higher than average crude refined in the US when blended with lower carbon products, said IHS CERA, the energy advisory firm. This puts oil sands on par with other US crude imports from Nigeria, Venezuela, and some oil produced in the US.

IHS CERA’s analysis was drawn from 13 publicly available government, academic, and industry studies. It said many analyses focus on oil sands GHG emissions from extraction through refining phases. “However, 70-80% of GHG emissions for all sources of crude oil, including oil sands, occur at the combustion phase. Combustion emissions do not vary for a given fuel among sources of crude oil. Oil suppliers influence only the well-to-retail pump emissions, which account for 20-30% of total lifecycle GHG emissions,” it said in the report Oil Sands, Greenhouse Gases, and US Oil Supply: Getting the Numbers Right.

“Taking into account the complete well-to-wheels lifecycle is crucial for making comparisons between sources of crude oil,” said Jim Burkhard, IHS CERA managing director, global oil, since the vast majority of emissions remain the same whether the oil comes from West Africa, Latin America, or Canada.

For many reasons, other commonly cited estimates assert the GHG intensity of oil sands is many times higher than conventional crudes, said IHS CERA analysts. Some assessments are based on comparisons of GHG emissions from only part of the lifecycle, such as only the extraction phase. Others focus solely on specific oil sands operations, such as insitu operations with higher-than-normal energy use.

“In order to have 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 IHS CERA Director Jackie Forrest. “Certain operations have higher carbon intensity, while others are lower. You must account for the entire spectrum.”

The analysis also examines potential implications of lifecycle-based regulation on petroleum fuels, including those produced from oil sands. Lifecycle-based policies, such as the low carbon fuel standards (LCFS) adopted by California and British Columbia, present a challenge for any petroleum fuel since 70-80% of emissions occur in the vehicle engine, out of the control of the fuel producer. Therefore, LCFS compliance will require the addition of lower-carbon fuels, such as biofuels, electricity, or natural gas, to the transportation mix,” officials said.

“This is a tough mandate for all oil producers and refiners because together they account for only 20-30% of the overall carbon emissions of the fuel,” said IHS CERA Director Samantha Gross. “A full one-half to one-third of emissions from producing and refining oil would have to disappear. Bringing lower carbon alternative fuels into the mix is the only viable compliance strategy.”

According to the report, many regulations designed to reduce GHG emissions focus on the fuel economy of vehicles—the distance they can travel on a given volume of fuel. However, it said, “Lifecycle policies instead call for reductions in the well-to-wheels emissions associated with the fuel itself, meaning that improving vehicle fuel economy is not an option to achieve compliance.”

The Natural Resources Defense Council disagreed with the IHS CERA report, claiming it dilutes GHG emissions by mixing bitumen with low-carbon source liquids and leaves out “important parts” of the lifecycle impacts.

This is the second of four reports to be released this year under the IHS CERA Canadian Oil Sands Dialogue in which a variety of stakeholders participate in objective analysis and open exchange on the benefits, costs, and various choices associated with Canadian oil sands development.

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