Oil is Changing: Five Facts About Oil You Should Probably Know from the Carnegie Oil Climate Index

, senior scientist, Clean Vehicles | March 11, 2015, 9:12 am EDT
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Most drivers think of “fuel” as gasoline or diesel—an erratically priced liquid that powers our cars and gets us places. But gasoline isn’t the only fuel that we use—electricity and biofuels are major players with growing potential—and even oil itself isn’t homogenous. In fact, oil is changing, and though the gasoline or diesel you buy may not have changed, the sources and impacts of producing it are shifting in imperceptible but important ways. This week a distinguished group of experts from across North America released an Oil Climate Index that provides insight, data and models into the changing nature of oil, and what it means for the climate.

This week Deborah Gordon, Director of the Energy and Climate program at the Carnegie Endowment (and founder of the vehicles program at UCS), together with Adam Brandt and Jonathan Koomey from Stanford University and Joule Bergerson of University of Calgary released some critically important new work on how oil is changing, and the implications these changes have for climate change. Oil companies top the list of major carbon producers, and while cutting oil use with efficient vehicles and innovative clean fuels can reduce emissions from driving, this new Oil Climate Index shines a light on the enormous but hidden emissions from the oil industry’s operations: the oil fields that extract crude and the refineries that convert it into gasoline, diesel, and other products.

Oil is changing and getting dirtier, riskier to extract, and more expensive to produce. This Oil Climate Index is a treasure trove of important information that my colleagues and I at UCS will be digging into in coming months, but right off the bat, I wanted to share 5 key insights and the data that backs them up.

1. Oil is changing

The resources being used to make gasoline and diesel fuel are increasingly diverse; many bear very little resemblance to the “black gold” that kicked off the oil rush a century ago at Spindletop in East Texas. Yesterday’s oil were primarily conventional sources (in 2000, 84% of proved reserved), but today the majority of oil reserves are unconventional. The “oils” being made into fuel range from tar sands coming from Alberta, which is more similar to window putty than liquid oil, to light shale oils, commonly called tight oil, that resemble nail polish remover and are extracted from rocks using horizontal drilling and hydraulic fracturing at Eagle Ford in West Texas or the Bakken in North Dakota.

2. Carbon emissions from oil extraction varies by more than 10X

Source: Carnegie Endowment Oil Climate Index

Source: Carnegie Endowment Oil Climate Index

Some sources of oil like Norway’s Ekofisk field have emissions of below 25 Kg per barrel of oil produced, while others like Nigeria’s Obagi field involve extensive flaring and fugitive emissions of methane with total carbon emissions 10x higher, or almost 250 Kg/barrel. Flaring occurs when oil producers go after oil without putting in place the infrastructure to capture and use natural gas that is extracted with the oil—they simply burn it in place instead. This flaring is so extensive that it can be seen from space, but more importantly it is wasteful and increases the carbon emissions and other pollution associated with producing oil.

Flaring is avoidable, and Norway’s ban on flaring illustrates that it is possible to produce oil and gas without this wasteful practice. Russia and Nigeria have historically been the largest sources of flaring, but flaring in the U.S. has ramped up with the production of tight oil (tight oil requires appropriate infrastructure to avoid extensive flaring). This is an area where the U.S. has a responsibility to act.

3. Carbon emissions from oil refining vary by more than 5X

OCI Figure 6

Source: Carnegie Endowment Oil Climate Index

 

Emissions from refining some extra heavy oils and especially tar sands can be substantially higher than lighter conventional sources of crude oil. For example, the heaviest tar sands crudes can have refining emissions of greater than 80 Kg/barrel, compared with less than 20 Kg/barrel for Brent crude from the North Sea. Adding these extra refinery emissions to the high emissions from extracting tar sands is one of the reasons that these dirtiest fossil fuel resources should stay in the ground.

In recent years tar sands oil production has risen, although the current lower gas prices are causing some companies to question the profitability of some projects. Making sure fuel consumers, producers, and the investors who finance these projects understand the carbon consequences of exploiting the dirtiest resources is critical to making smart decisions.

4. Carbon emissions from different uses of oil vary by 50%

Source: Carnegie Endowment Oil Climate Index

Source: Carnegie Endowment Oil Climate Index

We think of oil being used to make gasoline and diesel fuel to power cars and trucks, but refineries produce a wide range of products which result in significantly different carbon emissions when burned. Refineries have options, but in general, different crude oils are more suitable or less suitable for particular slates of products. The emissions from gasoline are about 370 Kg/barrel, while petroleum coke—a low value product that is used as a substitute for coal—has emissions more than two thirds higher, almost 645 Kg/barrel. Some of the heavier unconventional crudes like tar sands oil are more likely to be used to make these dirtier products.

Together with affordable renewable alternatives to coal that reduce emissions in electricity generation, this is another reason to avoid the dirtiest sources of oil altogether.

5. The oil industry has choices to make

Source: Carnegie Endowment Oil Climate Index

Source: Carnegie Endowment Oil Climate Index

The dirtiest sources of oil have emissions hundreds of kilograms per barrel higher than cleaner sources. In some cases, more responsible practices like capturing rather than flaring gas can keep these rising emissions in check. In other cases, the dirtiest extra-heavy resources are best left in the ground. With the US consuming 6.7 billion barrels worth of petroleum products a year, even a relatively small 10 Kg / barrel increase in average emissions will increase carbon pollution by 67 million metric tons a year. For comparison, this is the same as the extra tailpipe emissions if all the cars in the US were suddenly getting 2.5 fewer miles per gallon.

The auto industry is making important progress cutting carbon emissions and making cars that go further on each gallon of fuel. It is important that the oil industry does their share, and doesn’t undermine this progress by ramping up emissions at oil fields and refineries with wasteful and reckless choices. Getting clear information on the carbon risks of different sources of oil will allow investors to make informed choices about which sources of oil make sense in a carbon constrained future, help governments make smart decisions on long lived infrastructure like pipelines, and ultimately hold oil companies accountable for mitigating the harm caused by their products and practices.

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  • Richard Solomon

    Thanks. This was very informative.I look forward to reading more about it as you come to understand it more thoroughly. I also hope you will advise UCS members as to how they can advocate with their elected reps to get the oil companies to act more responsibly.