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US low-carbon fuel standard would increase global GHG: NPRA study


August 5, 2010
by PLANT STAFF

WASHINGTON: The implementation of a nationwide low-carbon fuel standard (LCFS) in the US would not reduce global greenhouse gas emissions: it would increase them, according to a new study.

The research, conducted by Barr Engineering Co. of Minneapolis for the National Petrochemical & Refiners Association (NPRA) in Washington DC, challenges the notion there is an environmental benefit to be derived from not importing oil sands petroleum from Western Canada.

It assumes that because an LCFS would prevent US refineries from importing oil sands petroleum from its next-door neighbour, the US would instead have to import more oil in tankers from the Middle East and elsewhere. At the same time, the Canadian oil would be shipped in tankers across the Pacific to China and other Asian locations.

The study calls this long-distance logistics a “shuffle” that would result in higher carbon dioxide emissions. It found that LCFS would result in greenhouse gas emissions increasing by 7.1 million to 19 million metric tons per year, depending on the displacement of Canadian crude imports.

Canada is currently the largest supplier of petroleum imported into the US, but the study notes other nations are looking to the Canadian oil sands as a potential energy source. China alone has already invested more than $6 billion in Canadian oil sands projects as it continues to rapidly increase its presence in overseas energy production.

A June 2010 report by Charles River Associates found that a nationwide LCFS implemented in 2015 would by 2025 result in the loss of between 2.3 million and 4.5 million US jobs; increase by up to 170% the price of gasoline and diesel fuel; and cut the US GDP by 2% to 3 per cent.

“These findings simply reinforce NPRA’s long-held belief that a federal low-carbon fuel standard is a policy of all pain and no gain,” said NPRA president Charles Drevna.

Janet Annesley, vice-president of communications for the Canadian Association of Petroleum Producers (CAPP) in Calgary told PLANT the report supports the view that Canada’s oil sands crude can be environmentally competitive with other options.

“We can’t speak to the science of the report, but the results are certainly consistent with other life-cycle fuel studies from credible groups such as Cambridge Energy Research Associates and Jacobs Engineering which show oil sands competes fairly with other crudes imported into the US.”

She said it’s also worth noting that while most crude oil sources are getting heavier, Canadian oil sands producers have reduced GHG emissions by almost 40% per barrel since 1990 and “continue to innovate.”

Click here for a copy of the study.
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