Comparing Approaches to Life Cycle Analysis of Crude Oil
From a Workshop organised by the Centre for European Policy Studies (CEPS)
Given the impact of crude oil on the local and global environment, numerous life cycle analyses on crude oil and oil sands have been undertaken. These studies have reached different results. On 21 March 2011, CEPS held a half-day workshop to discuss life-cycle and well to wheel assessments and to present and compare three different studies with the aim to point out differences, identify knowledge gaps and discuss possible policy implications of the various approaches. The overarching objective was to increase understanding of the reasons for the differences by trying to identify sources for disagreement, e.g. data, methodology, political preferences or other.
The approximately 35 participants in the workshop were experts from academia and the policy-making community, as well as from the broader stakeholder community including industry and environmental non-governmental organisation. The workshop was designed to allow maximum time for discussion. It was supported by the Mission of Canada to the European Union. Please see the Annex for the Agenda.
The presentations made at the workshop can be accessed through the following link:
As the workshop has been held under Chatham House Rules, the following Key Messages constitutes a summary by Christian Egenhofer, Senior Research Fellow at CEPS and Chairman of the workshop. Although a draft has been circulated to all workshop participants for comments, the content remains the sole responsibility of the author.
1. There was an agreement among the authors of the three studies (i.e. Jacobs Consultancy, Stanford University, CERA) that the quality of each others’ work was strong, and that differences in the lifecycle GHG values they presented can be traced back to the questions that the studies are trying to answer. For example, the difference of outcome of the Jacobs Consultancy stems from the fact that it was based on a first principle engineering model of a generic process/utility configuration analysed a particular project while the other two studies focus on industry average emissions.
2. Variations of outcomes of studies can in addition be explained by different assumptions. These differences typically include system boundaries (i.e. what is incorporated and what not?), reliability of data, baselines, structure of the refining industry, assumed rate of improvements or the sudden use of a new technology or process, and the way refining, transport or land-use are calculated. The variation in lifecycle GHG emissions of conventional oil is primarily affected by GHG emissions associated with crude production and in particular depends on several factors, including reservoir geology, maturity of the well, crude viscosity and production methods. Production methods, including flaring and venting of associated gas, can have a major impact on GHG emissions. There was agreement by all researchers of the benefits from more comparative studies.
3. It became clear that lack of available data and the questionable quality of data on the emissions of global crude sources remains an important issue for further work and policy development. However, there were differences in the conclusions on this issue. Some argued that the weakness in the data undermines the sound policy basis of government regulations that are intended to be based on the carbon content of crude oils. Others expected that the increasing focus on regulation will ultimately lead to better data developed by researchers, governments and industry itself, which has an interest in accurate data sources to be used by governments. Obtaining better data over time may be possible in some OECD and other developed countries but may find its limits in other regions of the world.
4. The view was expressed by some participants that the EU and other OECD and developed countries may be well served to discuss the gaps in data availability and quality and its policy implications in an international setting, whether in an existing or new forum. Such a forum could for example explore protocols and/or agreed methodologies to calculate GHG and other emissions. Other issues such discussions could address are of course data, system boundaries and methodologies to normalise refining and transportation issues.
5. The authors of the three main studies agreed that oil sands do not necessarily have the highest emissions of all crude oils. Although on average oil sands do have higher GHG emissions than average crude oil emissions, in some cases crude oils can emit more than oil sands. As an example, the case of Nigeria was mentioned: The country supplies 3-4% of EU crude imports and continues to flare, but because this activity is illegal it may not be fully accounted in the footprint.
6. Some argued that high-carbon crudes are incompatible with EU GHG reduction objectives, especially for the long term and consequently would make achievement of these targets more difficult. Others held that within the GHG intensity target the EU has set, it did not matter which crudes were brought to the EU as long as suppliers found a way to meet the target. If EU legislation discourages the use of high-carbon crudes, they would be used elsewhere, which could result for example in sub-optimal trade flows with higher emissions globally as a result of trade diversion, as well as higher costs for Europe.
7. It was argued by some that policies based on life cycle analysis have the most impact on countries that have transparent GHG monitoring regimes (effectively penalizing them for their transparency). It was also argued by some that there might be inadvertent impacts from increased monitoring (i.e. when flaring is penalized, some countries might be attracted to venting gas which has 25x more GHGs, and cannot be captured by satellite imagery as flaring can be).
Chair: Christian Egenhofer, Senior Research Fellow, CEPS
Introduction to the workshop: motivation and objectives
Christian Egenhofer, Senior Research Fellow, CEPS
Well-to-Wheels: Setting the scene
Short overview of the European Platform on LCA and the current state
Cristina de la Rua, Joint Research Centre, European Commission
13:55 Presentations of 3 studies (30 minutes each)
Ian Moore, Jacobs Consultancy
Open discussion led by the Chair on a number of themes such as data, methodologies, political preference, other.
End of workshop, followed by light refreshments
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