Petcoke: Just Another Scapegoat

Anti-fossil fuel group Oil Change International suddenly points to a little known petroleum product as the smoking gun for Keystone XL’s demise. Problem is: experts don’t agree.

Top-line facts:

  • The State Dept. didn’t ignore petroleum coke in its environmental analysis of KXL. The Department consciously chose not to include it beyond what was already embedded in GHG estimates calculated by others because petcoke is generally considered as a one-to-one replacement for coal in power generation.
  • Similar quantities of petcoke would be produced from any heavy oil refined at Gulf refineries – not just oil sands. Crudes transported via KXL will primarily be a substitute for declining supplies of other common heavy crudes from Mexico and Venezuela.
  • Keystone XL will not result in a substantive contribution to U.S. or global GHG emissions, according to Dept. of State. Following over four years of review, Keystone XL has proven to be a safe and sound project that is in our nation’s interest

In February 2012, two prominent climatologists from Canada, Andrew Weaver and Neil Swart of the University of Victoria, published a report concluding that if all economically viable oil sands resources were burned – approximately 170 billion barrels – the resulting carbon dioxide (CO2) emissions would cause a 0.03 degree Celsius rise in average global temperature. According to Swart, “By themselves the oil sands will not cause a climate catastrophe.”

Eleven months later, Lorne Stockman, self-proclaimed anti-oil campaigner and researcher, released a report on behalf of Oil Change International (OCI) proclaiming that the oil sands are “a grave threat to the climate,” largely due to the production of a petroleum product all crude oils yield: petroleum coke. Moreover, OCI’s report “Petroleum Coke: The Coal Hiding in the Tar Sands” claims that because this product was not included in the U.S. State Department’s environmental analysis of the Keystone XL pipeline, the project should be reconsidered.

After decades of analysis, and following over four years of review of the Keystone XL project, not one respectable life-cycle analysis of Canadian oil sands crude has proclaimed that petroleum coke – or petcoke – is a cause for concern. In fact, the State Department has concluded that Keystone XL would not result in a “substantive contribution to the U.S. or global emissions.” On the contrary, the pipeline could offset as many as 200 ocean tankers per year, potentially reducing greenhouse gas (GHG) emissions by as much as 19 million metric tons.

As research goes, contradictory findings over the oil sands are nothing new. But as you sift through the ever-growing mountain of reports, you will begin to see the balance tipping to one side – with numerous experts suggesting that petcoke as it pertains to the oil sands is not the threat that OCI makes it out to be. And as for the Keystone XL pipeline, well, we think it has survived its unprecedented review process for a reason: it’s sound, safe, and will deliver a vital energy resource from Canada, a trusted trading partner, while picking up 25 percent of its capacity from the light, sweet crude in the upper Northwest..

We read through the OCI report and have highlighted a few of the reasons why the facts and findings in this report don’t quite measure up:

OCI: “Emissions from tar sands extraction and upgrading are between 3.2 and 4.5 times higher than the equivalent emissions from conventional oil produced in North America. On a lifecycle basis, the average gallon of tar sands bitumen derived fuel has between 14 and 37 percent more greenhouse gas emissions than the average gallon of fuel from conventional oil.”

FACT: OCI takes the extraction-to-upgrading emissions figure from Pembina Institute’s 2011 report “Oilsands and climate change.” Coincidently, OCI and Pembina shared a stage today to release their respective studies on oil sands crudes, which calls into question the objectivity of their choice of reference documents.

A more objective reference is the recently updated IHS CERA’s analysis, which concludes that oil sands crude oils are similar to other heavy crude oils, and when compared to an average barrel of oil sands crude refined in the United States (including diluent), has GHG emissions 9 percent higher than the average crude refined here at home. Notably, Canada’s oil sands contribute only 2 percent of the country’s GHG emissions and only 1/600th to global emissions. And out of the top five sources of imported oil to the U.S., Canada is the only country that even has GHG regulations in place. In fact, regulations put into place in 2007 have resulted in GHG reductions of 23 million tons to date – an equivalent of taking 4.8 million cars off the road.

OCI: “But as bad as these impacts already are, existing analyses of the impacts of tar sands fail to account for a byproduct of the process that is a major source of climate change causing carbon emissions: petroleum coke – known as petcoke.”

FACT: OCI’s paper is almost solely based on the concept that petroleum coke is a climate killer, and that its use is on the rise. According to the Energy Information Administration, that’s patently false. In an analysis of U.S. CO2 emissions from petcoke from 2009 to present, emissions levels have been reduced by approximately 16 percent and continue to decline.

OCI also leans on the assumption that petcoke is a major source of power generation, going as far as to say that “the anticipated increase in U.S. petcoke production … has also led to proposals to build power generation plants in the U.S. specifically designed to burn petcoke” (p.37). In a brief entitled, “Minimal petroleum-fired electric capacity has been added in recent years,” EIA explains:

“Generators reporting petroleum as their primary fuel made up 6% of total electric generating capacity at the end of 2010, but produced less than 1% of total generation that year.”

OCI: “Because it is considered a refinery byproduct, petcoke emissions are not included in most assessments of the climate impact of tar sands or conventional oil production and consumption. Thus the climate impact of oil production is being consistently undercounted.”

FACT: We’ll lead this one off with a question: Over the decades that oil sands crude has been extracted and studied by countless experts and research organizations – not to mention the decades over that petcoke has been a product of petroleum refining – should we believe that OCI uncovered an overlooked method of calculating life-cycle emissions that includes petcoke in the calculation? We’ll call that one rhetorical, but it’s generally understood that petroleum coke combustion does not result in new emissions. From IHS CERA:

“Petroleum coke can be used for a variety of applications, but the most typical use is in power generation. Because the coke is simply displacing coal that would otherwise have been burned in power generation, the net emissions from producing the petroleum coke are negligible. In life-cycle analysis, this approach is commonly used and referred to as displacement.” (p. 8)

The Congressional Research Service conducted an exhaustive review of life-cycle analyses of oil sands crude just last year and among all of the analyses considered (and considered to be the best), not a single one that looked at petroleum coke production at refineries included petroleum coke emissions – including the U.S. Department of Energy and notable academics.

OCI: “These petcoke emissions have been excluded from State Department emissions estimates for the Keystone XL pipeline. Including these emissions raises the total annual emissions of the pipeline by 13% above the State Department’s calculations.”

FACT: Petcoke emissions were excluded from State Department emissions estimates for Keystone XL, but that doesn’t mean they weren’t considered. The Department thoroughly examined the role of petcoke on GHG emissions and chose not to include them beyond what was already embedded in GHG estimates calculated by others because, as explained earlier, petcoke is generally considered as a one-to-one replacement for coal in power generation (more math on why that’s the case is in the next bullet).

In the end, the State Department was right not to include petcoke emissions in its analysis because similar quantities of petcoke would be produced from any heavy oil refined at the Gulf refineries.  Recall that Canadian oil sands crudes delivered via Keystone XL will primarily be a substitute for declining supplies of other heavy crudes from Mexico and Venezuela, Maya Heavy and Bachaquero Heavy respectively.  According to Jacobs Consultancy’s life-cycle analysis of North American fuels, these crudes produce very similar amounts of coke as bitumen.

OCI: “On a per-unit of energy basis petcoke emits 5 to 10 percent more carbon dioxide than coal.”

FACT: The estimates of CO2 per unit of energy (lbs/MMBtu) used by OCI for coal and petroleum coke are 207.95 and 222.88, respectively, a 7.2% difference.  But these numbers only account for the amount of CO2 released from the combustion of the two fuels; they do not include the emissions associated with the production and transportation (called ‘upstream emissions’).  For coal, doing this adds 12 lbs/MMBtu. For petroleum coke, no GHG emissions need to be added since it is a by-product of the refining process and the ‘upstream emissions’ are already included in the life-cycle GHG emission estimates for oil sands crudes.  (Adding them to the petroleum coke number here would be double counting.) When the adjustments are made, the difference between the two fuels declines to a trivial 1 percent. 

Comments

  1. r.frege says:

    There are several problems with this analysis.

    For one, looking at Neil Swart’s complete analysis gives a very different picture than you’re giving. In fact, I think you positively misrepresent his work:
    http://climate.uvic.ca/people/nswart/Alberta_oil_sands_2C_warming.html

    Second, you seem to be assuming at the end there that petcoke will be burned in situ. That doesn’t seem very reasonable at all. It has to be shipped to a power plant, often overseas. Right? And, is it even reasonable to assume petcoke displaces only coal?

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