Most of the oil sands refineres in the U.S. are in the Chicago and Denver metropolitan areas…The point of the Keystone XL pipeline is to [bring] oil sands to the Gulf Coast. Our refineries produce more diesel than we can use, and they have excess gasoline, so there's some trade across the Atlantic of gasoline or diesel.
The oil sands are growing pretty rapidly, so it could be conceivable in the future that Europe would import oil sands directly…But that's not currently in place.
ICN: What are some best practices that the oil sands industry can use to reduce their emissions?
Brandt: It's a challenge. To their credit, the Canadians are putting a lot of effort into this…It's not that they don't know what they're doing or that they don't understand the science or that they're purposefully doing something with high emissions. It's that the resource [bitumen] is more challenging to extract.
There's potential for improvement for the subsurface operations, where they inject steam. They've been reducing the amount of steam they have to inject, per unit of oil produced, pretty significantly over the last 20 years, and they're getting better at it. A typical steam-injection rate is 3 barrels of steam per barrel of oil. Some projects produce tens of thousands of barrels of oil a day. That's a lot of water you have to boil, over the course of a day in an oil field, so if you can reduce the amount of steam, then they can reduce the emissions by quite a bit.
Another thing they can do is shift their fuel use towards natural gas and away from fuels like coke. Petroleum coke is a byproduct of the upgrading or refining process—they use this in some of the oil sands operations. It's a high carbon fuel that looks like coal. So they can shift essentially from using that fuel to using natural gas, which has lower carbon intensity. Some of the newer operations do this…There's lots of work going on, lots of research.
It's a relatively new industry—the first commercial plant started in the late 1960's, and they only started scaling up in the last 15 years or so…The hope is that as the science improves, they can continue to reduce these emissions, and reduce this difference between the oil sands and conventional oil.
ICN: Could the industry's expansion cancel out the progress it makes in reducing greenhouse gas emissons?
Brandt: It certainly could. There are plans to expand the industry quite a bit. So that could definitely offset improvements in terms of the total emissions.
Right now they're producing 1.5 million barrels per day—it's a little bit more than that now. From the projects that have been announced or proposed through the regulatory process…I've seen totals of somewhere around 7 million barrels per day. But you never know how many of these are actually going to be built, or how long it's going to take. It could take 15 to 20 years for those to get built…[and] the regulatory process takes quite a long time.
You see a lot of projections for doubling [production] over the next 10-15 years, going to 3 and 4 million barrels per day by the mid 2020s. Again, those are guesses. It depends on what happens with the oil price, what happens in Asia, with growing demand in China. It depends on a lot of things.
ICN: Other reports have come up with different values for the carbon intensity of oil sands. One that has received a lot of press was prepared by Jacobs Consultancy for the Alberta government.
Brandt: They've taken a different approach than my look at industry average values. They looked at specific crudes and specific oil sands extraction techniques, and they've emphasized that in some cases, the oil sands operations have lower emissions than some of the conventional oil operations…whereas my study was [about] the average industry values.
ICN: The Pembina Institute, a Canadian think tank that promotes sustainable energy, says the Jacobs report "effectively cherry-pick[ed] examples of the cleanest oil sands projects" and doesn't account for the volume of oil sands produced from a wide range of oil sands operations.
Brandt: I don't know if I would phrase it that way myself, but the goal of the Jacobs report was not to compute an industry average value. I do think that an average value is what you should be looking at for something like the [EU] fuel-quality directive. Also, it is not clear that they sampled the full spectrum of conventional oil operations or the full spectrum of oil sands operations. More work needs to be done in this area to better understand the range of emissions in both conventional and oil sands operations.
ICN: Can you talk about some other studies?
Brandt: There's the GHGenius model out of Canada and the GREET model out of Argonne National Lab. There's been some work done at NETL, the National Energy Technology Lab, and quite a bit of work done at the University of Calgary.
GHGenius looks very similar to mine. NETL also looks similar. GREET looks a bit lower than mine, and the studies at Calgary are still coming out, so it's hard to know exactly where they'll come out.
ICN: Why does GREET have different results?