New Study Finds Influx of Canadian Oil Sands Hasn’t Increased GHG Emissions Intensity

IHS CERA Finds:

–          The United States has increased imports of Canadian oil sands by 75% from 2005 to 2012.

–          Despite the influx of Canadian oil sands, “The GHG emissions rate for the average crude oil consumed in the United States was unchanged between 2005 and 2012.”

–          “45% of US oil supply falls within the same GHG intensity range as oil sands.”

–          “Growing volumes of Canadian heavy crude are likely to displace other heavy crude oils imported from Venezuela and Mexico.”

A new study by IHS CERA has put yet another nail in the coffin of anti-Keystone XL activists’ climate claims.  Contrary to their contention that Keystone XL would bring a whole new kind of oil to the United States, IHS CERA finds that the United States has been importing Canadian oil sands for years – yet greenhouse gas emissions intensity hasn’t increased:

“Between 2005 and 2012, US imports of oil sands (diluted bitumen [dilbit] and synthetic crude oil [SCO]) and other Canadian heavy supply increased by 900,000 barrels per day (bd), or 75%—from 1.2 million barrels per day (mbd) to nearly 2.1 mbd. In 2012, about 1.5 mbd was sourced from the oil sands, accounting for about 14% of US imports.” (p 4).

And yet despite this, the study finds that:

“The GHG emissions rate for the average crude oil consumed in the United States was unchanged between 2005 and 2012.” (p. 13)

This is because,

45% of US oil supply falls within the same GHG intensity range as oil sands.” (p. 13, emphasis added)

Specifically, as the report explains, increased imports of Canadian oil sands have not led to increased greenhouse gas emissions because U.S. tight oil has replaced a lot of GHG-intensive crudes, while Canadian oil sands replaced some of the heavier oils the U.S. imports from countries like Venezuela.  In fact the carbon intensity of the average crude oil consumed in the United States decreased very slightly, by 0.6 percent at the same time imports of Canadian oil sands were ramping up significantly.

Along with the increase in oil sands, imports of heavy oil from countries like Venezuela have decreased.  As the report states, there have been

“Declines in imports of Venezuela heavy crude oil, along with resources from other Latin American suppliers. In 2012, combined US imports were 400,000 bd lower than in 2005.” (p. 5).

As IHS CERA noted in a previous study – which found that Keystone XL will have “no material impact” on greenhouse gas emissions – this trend will only continue if the United States gives the green light to Keystone XL.  According to IHS CERA’s new study:

“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 reported in IHS Energy Insight Keystone XL Pipeline: No Material Impact on US GHG Emissions (download at www.ihs.com\oilsandsdialogue), 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.” (p. 10).

That’s why IHS CERA’s previous report said that Venezuela would be “the number one beneficiary of a negative decision” on Keystone XL.

Why is a report like this so important?  IHS CERA explains it this way:

“This question matters because policies are being rolled out based on various assumptions that could have significant economic consequences for different crudes, notwithstanding the validity of those assumptions […] For example, it has been a main topic in the debate about approving new crude oil pipelines between Canada and the United States. This was most evident in President Barack Obama’s 25 June 2013 climate address when he pledged not to approve the Keystone XL pipeline if the project would “significantly exacerbate the problem of carbon pollution.” (p. 4)

That’s right, the one year anniversary of President Obama’s speech – in which he pledged he would not approve Keystone XL if it significantly increased greenhouse gases – is nigh.  And one year later it’s abundantly clear that it won’t.

This latest IHS CERA report bolsters five assessments from the State Department, as well as the findings of climate scientists and energy experts, including Fatih Birol, chief economist of the International Energy Agency who said last year that it would be “definitely wrong to highlight [oil sands] as a major source of carbon dioxide emissions worldwide.”  Yet again, Keystone XL opponents have been found to be “definitely wrong.”

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