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January 21, 2013
Emissions from Canadian Oil Sands Worse than Expected
    by Robert Kropp

Two reports focus on the implications of building the Keystone XL pipeline and the effects on levels of greenhouse gas emissions from petroleum coke, a byproduct of the bitumen refining process.

The extraction of bitumen from oil sands in Alberta, Canada, has been described as "the most destructive project on Earth," leaking millions of gallons of contaminated water into the ground and emitting unusually high levels of greenhouse gases (GHGs). In 2010, the Environmental Protection Agency (EPA) stated, "We estimate that GHG emissions from Canadian oil sands crude would be approximately 82% greater than the average crude refining in the US, on a well-to-time basis."

Because of oil sands development, Canada's GHG emissions in 2007 were 26% higher than 1990 levels and 34% higher than the target it agreed to in the Kyoto Protocol. Facing fines in 2012 for failing to reach its emissions reduction commitments under the Protocol, Canada chose to withdraw from the process entirely.

In 2011, the US State Department withdrew its support for the construction by TransCanada of the Keystone XL pipeline, after Nebraska officials objected to the proposed route of the pipeline, which would have encroached upon the environmentally sensitive Sand Hills region of the state. But this month, after TransCanada revised the proposed route of the pipeline, the Nebraska Department of Environmental Quality determined that the project would have "minimal environmental impacts" on the state's freshwater supplies.

When fully operational, the pipeline would carry as much as 830,000 barrels of crude oil per day from the oil sands sites in Canada to refineries on the Gulf of Mexico. According to Nathan Lemphers of the Pembina Institute, the State Department is close to releasing a draft environmental impact assessment; after a comment period, final recommendations will be published.

Pembina has published a backgrounder assessing the climate impacts of constructing the Keystone XL pipeline. If the pipeline is built, Pembina warns, "Filling Keystone XL with oil sands will cause a 36 per cent increase from current oil sands production, for which the higher upstream emissions alone will be equivalent to the annual emissions from 6.3 coal-fired power plants or over 4.6 million cars. This value will be higher when the additional emissions from upgrading and refining in the US are considered."

"The per-barrel greenhouse gas emissions associated with oil sands extraction and upgrading are estimated to be 220 to 350 per cent (3.2 to 4.5 times) higher than conventional crude oil produced in Canada or the United States," the report continued.

Between 1990 and 2010, Pembina reports, emissions from oil sands extraction nearly tripled. Emissions are expected to more than double again between 2010 and 2020. "If Keystone XL was filled, it would support over a 36 per cent increase in oil sands production," the report states.

"In the absence of a credible plan for responsible development of the oil sands, including mitigating GHG emissions growth to a level that would allow Canada to meet its international climate commitments, the United States should not go ahead with the proposed Keystone XL pipeline," Pembina concluded. "It would send a clear signal to oil sands producers, the Canadian government and financial markets that the current high carbon content of oil sands has become a liability for future oil sands growth and the long-term competitiveness of the US economy."

It turns out that even Pembina's projections do not account for a significant contribution to increasing emissions from oil sands extraction. A report from Oil Change International focuses on petroleum coke, a byproduct of the bitumen refining process, which can be burned in coal-fired power plants. "Because it is considered a refinery byproduct, petcoke emissions are not included in most assessments of the climate impact of tar sands or conventional oil production and consumption," Oil Change International reports.

A ton of petcoke yields on average 53.6 percent more CO2 than a ton of coal, the report found. Yet industry analysts have assumed a one-for-one replacement of coal with petcoke; therefore, additional emissions are considered to be zero.

"But the fact that petcoke has higher CO2 emissions than coal and is a refinery byproduct that sells at a discount to coal means that petcoke makes coal-fired generation cheaper and dirtier," the report argues. "Not including petcoke emissions in estimations of the GHG emissions of tar sands and other crude oils that yield petcoke means the climate impact of oil production is being consistently undercounted."

"Petcoke emissions are significant and cheap petcoke dumped on the market could constitute a crutch for a declining coal-fired power industry," the report concludes. "Without greater recognition of the role of petcoke in the global energy mix, we risk underestimating the impacts of the emerging transition to heavier oil and tar sands bitumen in the oil market."

In October, Ceres announced that a coalition of 49 investors representing some $2 trillion in assets under management had delivered an investors' statement of expectations to Canada's Oil Sands Innovation Alliance (COSIA), a group of 12 major oil sands producers.

The investors recommended that COSIA members reduce GHG intensity in their operations "to at least that of conventional oil production," and to do so not by the purchase of offset credits but by actual emissions reduction.

"However," the investors observed, "we are skeptical about whether these concerns can be adequately resolved while oil sands development continues on its present trajectory."


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