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California Oil Refiners Turn to Processing Dirtier, Cheaper Crude Oil

The state's refineries emit 19 to 33% more greenhouse gases per barrel of crude oil when stacked up against comparable gas-producing regions.

By Ngoc Nguyen, New America Media/InsideClimate News

Mar 28, 2012
ConocoPhillips oil refinery in Rodeo, Calif.

California's long-running campaign to reduce air pollution has indirectly helped create a new problem: its oil refineries produce more greenhouse gas emissions than refineries anywhere else in the country.

On average, California refineries emit 19 to 33 percent more greenhouse gases per barrel of crude oil when stacked up against comparable gas-producing regions in the United States, according to a recent study commissioned by the Union of Concerned Scientists. The report analyzed national and California-specific refinery data and combined it with data gathered by author Greg Karras, who has been studying and writing about refinery operations since 1989.

California began mandating cleaner burning fuel than the rest of the nation in the mid-1990s, in an effort to combat some of the worst smog levels in the country and meet federal clean air rules. That spurred oil refiners to expand their facilities and install technology to remove more pollutants like sulfur, so car tailpipes would spew out less of it.

In the last decade, however, oil refineries have begun processing heavier and dirtier types of crude oil, including Canadian tar sands oil, which requires more cleaning to meet California's standard. And that extra cleaning means that plants use more energy and emit more CO2.

"With respect to emissions intensity, California officials have been running around claiming California's oil refineries are so much more energy efficient, that they are just cleaner ... Obviously they were wrong," said Karras, a senior scientist with Communities for a Better Environment, a California nonprofit that advocates for residents who live near oil refineries.

The study's findings emerge as California is taking another groundbreaking step to reduce global warming gases. A.B. 32, a climate change law passed in 2006, aims to slash greenhouse gas emissions by 15 percent by the end of this decade and 80 percent by 2050. One of the ways it will do that is by capping emissions at oil refineries and other industrial facilities.

Under a market-based mechanism known as cap-and-trade, refineries must gradually lower their emissions or buy or trade "allowances" to meet the new standard. Dave Clegern, a spokesman for the California Air Resources Board (CARB), the agency tasked with implementing A.B. 32, said the emissions cap, which will gradually be lowered over time, will reduce greenhouse gases across key industrial sectors, including oil refining.

Clegern hasn't seen the new study, but he said he's "not terribly surprised to hear" that the state's oil refineries use more energy and emit more greenhouse gases than facilities elsewhere. 

Part of the problem, he said, is that "there's a large age discrepancy" among California refineries. "Some are old and some are not," he said.

Oil refineries produce 10 percent of California's greenhouse gas emissions and up to 40 percent of its industrial emissions, according to a 2009 report by Communities for a Better Environment.

Eric Schaeffer, executive director of the Environmental Integrity Project (EIP), said he was surprised to learn that California's refineries are processing so much heavy crude oil. A nonpartisan, nonprofit organization, EIP was founded by attorneys who had worked for the U.S. Environmental Protection Agency and now advocate for more effective enforcement of environmental laws.

Schaeffer said the study presents the state with an even bigger challenge right at a time when it is trying to tamp down on industry emissions, especially from this key sector.

"Turns out, it is a little more daunting [to curb emissions] in California" than people thought, he said.

California's Crude Oil Switch

Oil refineries have turned to dirtier crude in recent years because it is cheaper than light, sweet crude. Oil refineries that have the flexibility to process a wider spectrum of crude oils—from light to heavy—have a competitive advantage and are more profitable, industry analysts say.

According to investor reports, some of the state's top gasoline producers have upgraded their facilities to process heavier, higher sulfur crude oils. The Chevron refinery in El Segundo and the Shell refinery in Martinez have added sulfur removal or recovery units. Chevron built a plant to produce hydrogen in El Segundo and has a permit pending for a similar expansion in Richmond. The Tesoro refinery in Avon/Martinez and Chevron's El Segundo operation are both adding coking facilities.

All of these processes require a lot of energy, but they can also help refineries strip out more sulfur to meet clean air rules, or help them produce more high-quality end products from lower quality crude.

For example, several refineries have built separate plants to produce their own hydrogen, which binds to sulfur and effectively removes it during the refining process. Hydrogen is also added in the refining process to make "light, hydrogen-rich motor fuels from the carbon-dense, hydrogen poor components of crude," according to the study.

Adding coking facilities allows refineries to generate gasoline and diesel from lower-value fuel oils. Coking also produces a desired byproduct—petroleum coke—that can be used to fuel power plants. "The coking units are installed at existing refineries to increase the refinery's ability to process heavier crude oils," according to an EPA white paper on energy efficiency technology and petroleum refining.

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