The People of America's Oil and Natural Gas Indusry

The Science of Obfuscation

Mark Green

Mark Green
Posted June 24, 2015

A few observations on an Energy Department-funded study that reportedly asserts Canadian oil sands will yield significantly greater emissions than conventional crude oil. We say “reportedly,” because the study itself isn’t out yet, just the abstract. Even so, the Wall Street Journal breathlessly says the “findings provide ammunition to foes of the proposed Keystone XL pipeline and other critics of surging Canadian oil output.”

Now, take a deep breath.

We’ve posted on this claim before. President Obama brought it up a couple months ago to justify more than six years of delaying a decision on the Keystone XL pipeline by the White House. Certainly, assigning alarming greenhouse gas (GHG) emissions to oil sands boosts an anti-KXL, anti-oil sands position. But it’s a faulty comparison. Here’s why.

According to the study abstract, researchers compare oil sands crudes to crudes conventionally produced in the U.S., not to the average U.S. crude consumed. It’s a critical distinction. By setting up that comparison, the study:

  • Ignores U.S. consumption of domestic tight oil and other foreign crudes entirely – an amazing omission given that U.S. conventionally produced crude represents only about 30 percent of total U.S. crude consumption.
  • Avoids having to acknowledge that many of these other foreign crudes are just as GHG intensive as oil sands.
  • Over-represents the potential impact of increased oil sands use by ignoring the fact – as a number of studies have established – that U.S. refiners will continue to process heavier crudes of similar carbon intensity to oil sands regardless of the availability of oil sands.


Last year IHS Energy produced a special report, “Comparing GHG Intensity of the Oil Sands and the Average US Crude Oil.” IHS said:

Forty-five percent of the crude oils consumed in the United States are within the same GHG intensity range as those from the Canadian oil sands. Comparing the oil sands against the average crude oil baseline estimated by IHS for 2012, refined products from oil sands has life-cycle GHG emissions that are between 1% and 19% higher than the average crude oil consumed in the United States. This places oil sands within the same GHG intensity range as 45% of crude oil supplied to US refineries in 2012. Two-thirds of the crudes in this range came from Latin America, Africa, the Middle East, and some US domestic production.

Here’s an IHS chart showing the array of imported crudes and their well-to-wheels GHG emissions, showing that oil sands’ GHG intensity is comparable to other heavy crudes – and indeed is below that of the average California heavy crude:

welltowheels

The IHS report also points out that comparing a specific type of crude oil to a baseline average – to draw a conclusion about GHG emissions – isn’t a good idea:

… it is misleading to use the baseline as a reference point when estimating the incremental GHG emissions associated with greater US consumption of one type of crude oil. For example, an increase in the import and consumption of oil sands will most likely replace a similar crude oil, not the average crude oil. The most likely substitute for Canadian oil sands in the United States is Venezuelan crude oil, which has a GHG intensity within the same range as the Canadian oil sands.

IHS adds:

Oil sands will not replace the average crude consumed in the United States. The vast majority of future oil sands production growth will be heavy crude oil that targets US Gulf Coast refineries that are configured to processing heavy crude oils. Growing volumes of Canadian heavy crude are likely to displace other heavy crude oils imported from Venezuela and Mexico. Based on our earlier analysis … crude from Venezuela is in the same GHG intensity range as oil sands. Further, if Canadian oil sands supply to the US Gulf Coast is limited, Venezuela is the most likely alternative source of supply.

In other words, it appears the new study’s comparison is largely irrelevant.

Of course, we also have the U.S. State Department’s environmental review – the last of five such reviews – which said Keystone XL (and the oils sands it would carry) would not significantly impact the environment, climate or otherwise.

We also know that Canada has worked hard to reduce oil sands emissions. According to the Environment Canada 2014 report, between 1990 and 2012, GHG emissions associated with every produced barrel of oil sands crude were reduced 28 percent. In the same report: Oil sands account for 8.7 percent of Canada’s emissions and about 0.13 percent of global emissions.

The main point here is that questions about Keystone XL and oil sands have been asked and answered for years now. Bottom line: This new study offers nothing to justify lessening our strategic energy partnership with Canada, our No. 1 source of imported oil.

In the Wall Street Journal article referenced above, Stanford’s Adam Brandt, a co-author of the study, is quoted as praising the data collected by himself and the other authors. The study, Brandt said, will “provide greater clarity for the regulatory process.”

Greater clarity? We don’t think so. This kind of analysis only serves as fodder for political skirmishing that picks and chooses among crude types to distort the facts for policymakers and the public.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.