RPT-COLUMN-Canadian tar sands lobby muddies CO2 impact-Gerard Wynn
By Gerard Wynn LONDON, Dec 7 (Reuters) - The Canadian tar sand oil lobby is deliberately using uncertainty over the carbon emissions from heavier crudes to wriggle out of oversight in a tactic which further tarnishes the sector's environmental image. Green groups have stepped up tar sands opposition as the United States plots a delayed Keystone XL pipeline to U.S. Gulf Coast refineries while some regulators take steps which may limit demand. The EU and California have each set targets to cut carbon emissions from road transport fuels under wider measures to tackle climate change and promote clean energy. That tar sands are more carbon emitting than the average crude oil is undisputed and stems from energy-intensive extraction. European and Californian regulators now want to assign a high carbon label to tar sands, spelling out emissions per unit of energy, which may discourage refiners facing CO2 targets from using it. But the industry has seized on its own commissioned study, which suggests the European Commission exaggerated the carbon impact, to argue that tar sand emissions be treated as other crude. Tar sands are important because of their scale on a par with Saudi Arabia's vast oil fields. Despite uncertainty over the exact CO2 emissions from tar sands, these are certainly higher than most conventional crude, and the case remains for highlighting this with a label as California and the European Commission propose. LOBBY TACTIC Most road transport emissions come from burning fuel (70-85 percent), not producing it, so it makes sense to focus most on car efficiency standards. Nevertheless, a barrel of tar sands oil does produce more carbon emissions than the average crude, and the industry should accept this. The industry is using two key blocking arguments. One is to say that some other crudes are as high carbon as tar sands. It is true that some Russian and Nigerian crude fall into this category. Lobbyists argue that because they lack reliable accounting, they can't be regulated, and so Canadian tar sands shouldn't be either. "It would not be possible given the standards of data collection available globally to implement such a scheme any time soon," said one energy industry source. That's a race to the bottom which should be dismissed. A second related argument surrounds the administrative burden in general to track the CO2 emissions of each barrel. The head of the California Air Resources Board (CARB), Mary Nichols, answers that in a recent letter obtained by Reuters to her EU counterpart the Climate Commissioner Connie Hedegaard, in an interesting display of collaboration. (see link above) "The expected administrative burden ... is minimal. Oil companies already track and report their crude oil information as a normal course of business. Any additional production related reporting going forward would be no more burdensome than those currently placed on low carbon fuel providers," she wrote. MEASURE Emissions estimates vary widely according to calculation assumptions, the tar sands projects (some of which are cleaner running) and an error margin of about 5 percentage points which leaves plenty of room for interpretation according to the particular lobby. Estimates also depend on which parts of the product life cycle are included. Tar sands oil is extracted either by strip mining sand from the surface or by pumping steam into deeper seams to make it flow. The oil is then converted either into a synthetic crude or diluted with condensates before being shipped off to a refinery. Diluting the raw oil sand bitumen also dilutes the carbon emissions per barrel of the end product. The initial extraction is three to five times more carbon emitting than conventional crude recovery, according to a study by Stanford University's Adam Brandt. However, that margin is proportionately smaller after adding the much bigger emissions from refining and combustion, amounting to about 15-20 percent more than average European crude, Brandt told Reuters. If dilution of the product is included, tar sands are only about 11 percent more emitting than average European crude, according to a study by consultants IHS Cera, paid for and championed by oil companies and at the lower end of estimates. Given that the diluent is usually refined with the tar sand as a single product, according to IHS Cera, it seems fair to include it. Going forward, more of the diluent will be stripped out and recycled, in which case it shouldn't be included. Regulators' figures come in higher: the European Commission measures tar sands emissions at 22 percent above the average crude baseline. EU member states will debate the proposal in mid-January. California may produce its own estimate later this month. The wide range illustrates a need for greater transparency, but shouldn't be seized on as an excuse for inaction: a compromise, "high carbon crude" figure can be found. If the tar sands lobby tries to duck out altogether - and there is evidence of present frantic Brussels lobbying - that will tarnish its image further.