27 July 2009

Two new lifecycle studies have found that greenhouse gas (GHG) emission gaps between oil sands derived crudes and conventional crudes are smaller than reported in some prior studies. Emissions from producing, transporting and refining oil sands crude, while greater on average than those from conventional crudes, overlap the conventional crude range, depending upon a number of factors. Thus, a number of Canadian oil sand crudes have lower GHG emissions than certain conventional crudes produced via energy intensive processes.

The studies were conducted by two US-based consulting companies, Jacobs Consultancy and TIAX LLC. The research was funded by the Alberta Energy Research Institute (AERI). Consistently with prior research on the subject, both studies compared direct life cycle emissions (i.e., such effects as land use change were not investigated).

The studies found that GHG emissions from the oil sands are on average about 10% higher than direct emissions from other crudes produced or imported into the United States. The reports also noted that GHG emissions for conventional crudes are likely to increase due to the shift to heavier and more difficult to produce conventional crudes, while GHG emissions from oil sand crudes are likely to decrease due to technological progress.

Variability exists in GHG emissions among both oil sand and conventional crudes. Among oil sand crudes, the lowest emissions are produced by those made from bitumen extracted via mining processes. GHG emissions for mining-derived bitumen crudes are comparable to those of many conventional crudes. Bitumen extraction through in-situ steam injection methods, on the other hand, is more energy intensive and produces higher GHG emissions.

Potential exists to reduce GHG emissions from oil sand crudes through co-generation of power and steam, and through carbon sequestration. Many new production facilities in Canada are near sites that can be used for CO2 sequestration, note the reports.

The GHG emissions from conventional crudes depend on such factors as reservoir depth, water to oil ratio (the higher the amount of water and the depth, the higher the energy loss for pumping water), and venting and flaring of produced gas. The following example crudes show widely different GHG effects:

  • Nigerian crudes are produced with some of the world’s highest levels of flaring, corresponding to as much as 12-18% of the energy content of the crude oil.
  • Deep water crudes from Gulf of Mexico are produced from depths over 15,000 ft with moderate water to oil ratio.
  • Mexican Mayan crude is produced with the aid of nitrogen injection from the world’s largest air separation plant.
  • Crude oils from Saudi Arabia are produced with relatively low energy input and therefore rank among crudes with the lowest GHG impact.

California has adopted a Low Carbon Fuel Standard (LCFS) with the objective of reducing the carbon intensity of transportation fuels by 10% by 2020. The introduction of a national LCFS in the United States may have implications regarding how the Canadian oil sector responds to the challenge of producing heavy oil and bitumen in an environmentally responsible way. The LCFS standard creates the potential to significantly burden the production of heavy oil and bitumen in Canada, while encouraging production in other parts of the world that have less stringent environmental regulations.

Source: AERI (Press release | Jacobs report | Tiax report)