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Stuart Burns

Stuart Burns

Stuart is a writer for MetalMiner who operate the largest metals-related media site in the US according to third party ranking sites. With a preemptive…

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Why we Need to Change the Way we Assess Fuel Supplies

Opposition to the Keystone XL pipeline is fierce in some quarters, led by environmentalists implacably opposed to the venture on the grounds that it will encourage further development of Canadian tar sands deposits. Even the White House has seen protests outside its doors as objectors have sought to persuade President Obama to rule against it.

Their argument is that the energy used in the extraction of the oil from tar deposits makes tar sand oil among the most carbon-intensive of fuel sources. The debate is not helped by competing reports using differing terms of measure. One analysis suggests tar sands emissions could be as high as 82 percent greater than that of average crude refining in the US, on a well-to-time basis, although the EU has recently given tar sands a 22 percent higher carbon content than conventional crude.

(Before we get inundated with comments, yes, I have seen assessments as high as 2.5 times the level of conventional US crude, as we say it varies widely, but what is not in disagreement is that it carries a heavy carbon payload). In addition, opposition groups claim, with some justification, that previous and current extraction sites have been guilty of:

• Destruction of the boreal forest ecosystem
• Potential damage to the Athabasca watershed
• The release of greenhouse gases
• Heavy consumption of natural gas
• The creation of toxic tailings ponds

But if we want a balanced argument, then we should adopt a common set of criteria for making judgments about fuel sources; otherwise, we are merely putting ourselves at the whim of the most motivated and vocal interest group. If we are looking at the total carbon footprint of fuel sources to make value judgments about their desirability, then it should be fairly applied to all sources.

As an FT article points out, unpleasant as tar sands are, they are not the worst. The article suggests there are many sources of oil that actually create higher emissions than much of the production from tar sands. Nigerian crude (associated with high rates of gas flaring), heavy oil from the Middle East, and even some oil from the Gulf of Mexico can have a larger carbon footprint.

What is not generally discussed in the more popular press is that the incredibly wasteful nature of Nigerian crude oil production results in one of the worst greenhouse gas emission (GHG) levels for any fuel source. The problem in Nigeria is that virtually none of the associated gas is collected — it is simply flared off. In the early days, the government entirely acquiesced to this policy, but in recent years have tried to coerce oil companies to build the infrastructure for gas collection.

A technical study this year reported that among EU-imported crude oil sources, Nigerian wellhead-to-refinery-assessed GHG emissions were the highest of the top twenty supply sources, coming in with a figure of 21.1 gCo2/Mj of crude oil produced. This compared to the lowest from Norway at just 1.0 gCo2/Mj. The point here is not to say the Canadian tar sands are preferable to imports from Nigeria, but rather, to have an intelligent debate we should have a common standard and method of measure. Even some Middle Eastern and Californian thermal recovery-enhanced oils have GHG profiles similar to tar sands, not to mention the very latest wheeze – oil from shale.

Lastly, while mentioning shale, it seems ironic the US is looking to export its far cleaner natural gas, made more competitive due to shale gas, as LNG to Asia. Following on the heels of exports this summer and more ambitious plans to invest in LNG export facilities in southern states, even Alaska is looking to invest in a pipeline to the coast specifically to export LNG to Asia. Noted, LNG is not crude oil, and as a starter stock for petroleum and chemicals it has different advantages and disadvantages to crude oil, but with the right incentives provides a far cleaner hydrocarbon source than Canadian heavy bitumen-based tar sands. We export one and import the other — cost triumphs over logic it seems.

The debate really needs to move on from fighting one project at a time and look at the wider picture. If global warming is a problem the government wants to seriously address, then a good starting point is to assess GHG emissions from all energy sources. It may not be the final arbiter, but along with price and security of supply, it takes some beating.

By. Stuart Burns

(www.agmetalminer.com) MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends, strategies, and trade policies that will impact how you source and/or trade metals and related metals services, MetalMiner provides unique insight, analysis, and tools for buyers, purchasing professionals, and everyone else for whom metals and their related markets matter.

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