Oil Climate Index measures 30 global crudes’ environmental impacts

March 12, 2015
Researchers at the Carnegie Endowment for International Peace, Stanford University, and the University of Calgary unveiled the first Oil Climate Index to compare various crude oils’ environmental impacts from the wellhead to the consumer.

Researchers at the Carnegie Endowment for International Peace, Stanford University, and the University of Calgary unveiled the first Oil Climate Index to compare various crude oils’ environmental impacts from the wellhead to the consumer. They conceded their analysis of 30 global crudes was from far complete, but expressed hope that it would encourage others to discuss new ways the oils can be managed and regulated to limit climate consequences.

New ways to measure greenhouse gas emissions are necessary because the oil business itself has changed dramatically, according to the report, “Know Your Oil: Creating a Global Oil Climate Index,” which was released on Mar. 11 at the Carnegie Endowment. Of the 30 crudes, 6 each came from Canada and the US; 5 came from sub-Saharan Africa; 3 each came from Europe, Eurasia, and Latin America; and 2 each came from the Middle East and North Africa and the Asia-Pacific.

“Advancements in technology that have unlocked unconventional hydrocarbon deposits in once-unreachable areas are costly and risky in both private and social terms,” it said. “Many of these advancements result in larger GHG emissions than traditional extraction methods, and some oils have more than 80% higher emissions per barrel than others.”

Researchers immediately discovered there are an enormous number of variables in many areas. “There’s so much complexity in crude oil that it’s a mistake to assume that all production from a single region produces uniform carbon emissions,” said one of the report’s authors, Jonathan Koomey, a Research Fellow at Stanford University’s Steyer-Taylor Center for Energy Policy and Finance.

“If you take away nothing else today, it’s that variations in these oils matter,” Koomey said. “We hope to have 50 in our data base this summer.”

Critical variables include how gas trapped with the oil is handled by producers, whether significant steam is required for oil production, if a lot of water is present as the oil reservoir depletes, how heavy (viscous) or deep the oil is, what type of refinery is used, and whether petroleum coke and other bottom-of-the-barrel products are combusted, the report said.

More assays needed

“We clearly need more assays to accurately identify more refinery data,” said a second of the report’s authors, Joule Bergerson, an assistant professor at the University of Calgary’s chemical and petroleum engineering department. “We’re finding that different companies’ assays introduce different levels of error into emissions estimates.

The 11 refinery configurations we used don’t represent the full suite,” Bergerson said. “The challenge is to engage with the industry to report more data without having to disclose sensitive information. Inadequate data has been an overriding feature of the entire study.”

A third author, Adam Brandt, an assistant energy resources engineering professor at Stanford who discussed the report’s upstream portion, added, “We’ve found huge variations in data from the same field. Moving toward more consistent data collection would help.”

Brandt said reducing the flaring of gas associated with crude production would be one major upstream emissions reduction opportunity. The National Oceanic and Atmospheric Administration has launched a satellite to identify where this is taking place and measure it, but problems have developed in its seeing all the flares reported on the ground in the Bakken tight-oil fields, Brandt said. “We have no idea what’s going on in Russia because there’s no on-the-ground reporting there,” he said.

Deborah Gordon, who directs the Carnegie Endowment’s Energy and Climate Program and, as the report’s fourth author, looked at end-use GHG emissions, told OGJ prior to the report’s release that the project began 2½ years ago when crude prices and demand were high, “and a lot of new oils were racing onto the market.”

She said, “Now, there’s time to take a breath and think about how we’re going to manage this. I’d love to see an environmental impact statement before a well was drilled so a producer would know what kind of oil is down there and whether significant environmental regulations could come into play.”

Researchers were shocked when they found existing data were limited, inconsistent, and opaque, Gordon said. “More information is going to be essential if we’re going to get this right,” she said. “If we don’t, infrastructure investments will be made in the next 40 years which will need to be managed after being built. No one likes retrofits.”

Carnegie’s Oil Climate Index used three open source models:

• Oil Production Greenhouse Gas Emissions Estimator (OPGEE), which focused on specific extraction methods; activity levels per unit of production (the water-oil ratio for primary and secondary production, and steam-to-oil ratio for tertiary production); location (onshore or offshore with GIS coordinates); and flaring and venting rates.

• Petroleum Refinery Life-cycle Inventory Model (PRELIM) with reporting on updated refinery process energy requirements; refinery changes which affect product specifications and quality; and specific oil assay parameters (such as API Gravity, density, sulfur content, and volume/mass flow).

• Oil Products Emissions Module (OPEM), which covers transportation and production statistics covering global oil trade, changing trade patterns and trends, US crude and product transfers, origin dates (for crude) and destination data (for individual products) by refinery, and market prices for all oil products.

The index demonstrates that stakeholders need to make producers, refiners, and transporters more aware of how to manage and limit emissions within their industry segment, suggested David Livingston, an associate in Carnegie’s Energy and Climate Program. “As data become more available, investors will be empowered to make companies more accountable for their decisions’ environmental impacts,” he said.

Koomey said governments will need to become involved because markets can no longer be considered reliable. “Up to now, we’ve socialized the external costs of burning these fuels,” he said. “It will require a sea-change recognition that we need to minimize emissions.”

Livingston said, “This problem isn’t going to be solved by the industry’s making incremental improvements. Big governments like China and the US will need to get together and improve and integrate data.”

Contact Nick Snow at [email protected].