If Wall Street was too big to fail, Big Oil is looking too arrogant to change these days. Not more than 107 days after the Gulf spill began, the National Petrochemical and Refiners Association (NPRA) as well as Big Oil’s front group -- disguised under the misnomer “Consumer” Energy Alliance (CEA) -- both continue to plow millions of dollars to fight against major initiatives to reduce America’s dependency on oil and to cleanup oil pollution. My colleague Liz Barratt-Brown has blogged previously on CEA.
Who are members of NPRA? The industry group includes companies like – yes you guessed it – BP, as well as Exxon Mobil, Chevron, Shell, and Tesoro to name a few. Just as BP and the oil industry continue to try to assuage public anger with advertisements on their cleanup efforts and assurances about the industry going forward, their industry groups are leading campaigns to undermine initiatives that would cleanup oil pollution and help us get off oil.
The NPRA’s latest move comes through a significantly misleading and flawed study released yesterday, aimed at scaring federal and state policymakers from adopting a low carbon fuel standard (LCFS). Already enacted in California with other states following suit, the LCFS would help introduce lower carbon fuels, significantly reduce GHG emissions, and move us away from oil addiction.
Somehow, the NPRA study concludes that a policy reducing global warming pollution from fuels would increase global warming pollution. Feeling some cognitive dissonance? NPRA’s study boils down to its claim that if the U.S. requires cleaner fuels from the oil industry, one possible side-effect is that the oil industry would ship their dirtiest fuels elsewhere. The result, so the NPRA argument goes, is that there would be more ocean vessels transporting those dirty fuels elsewhere, leading to some unintended pollution.
With the oil industry’s truthfulness in question these days, we thought we would truth-test the study. Not surprisingly, Big Oil has grossly misrepresented the impacts of the LCFS, chosing to completely ignore the real and large emission reductions from increased low-carbon fuels. Instead, they focus on a very hypothetical scenario involving longer ocean shipments of oil. From an environmental standpoint, it is analogous to pointing out the oil leak under the emergency vehicle at the site of the latest pipeline spill disaster. Here’s how the NPRA analysis fails the truth-test:
- The benefits of a LCFS far outweigh this hypothetical, side effect: A study purporting to quantify the impact of unintended emissions from ocean vessels and pipelines should at least show how this compares against the total LCFS benefits. We’ve done so below, assuming NPRA’s worst case scenario that all high-carbon imports from Canadian get shuffled (correcting for their eye-popping flaw, explained below). The result is that the LCFS leads to a net benefit of 253 MMT of reductions, even accounting for NPRA’s estimated 6 MMT increase from additional transport emissions. That's a 2.4% reduction in benefits in the worse case scenario [2].
- The industry can’t actually send the dirty fuel in question (oil from Canadian tar sands) elsewhere. In establishing their hypothetical scenario, NPRA fails to even note that there are no pipelines that can send Canadian tar sands to China or elsewhere. There are no such pipelines today or expected in the near term future. The U.S. is their only market. Even if oil from tar sands went elsewhere, most refineries overseas would need to have significant, costly upgrades to take on this extra heavy crude oil.
- Transport emissions of crude oil makes up 1.5% of total emissions (on a lifecycle basis): Below is a graph showing data from the Department of Energy[1]. The emissions from transporting crude oil are small in comparison to the entire lifecycle emissions. The study also fails to consider possible scenarios where dirty fuels imported from far away don’t get produced and are displaced by home-grown fuels, thereby reducing lifecycle emissions overall (including the transport emissions).
- The study doesn’t even get its hypothetical, imagined cases correct. It assumes all Canadian crude imports to the U.S. are “shuffled” as opposed to just the dirty stuff (i.e. Canadian tar sands). The NPRA scenario hypothesizes 2,436 thousand barrels per day (bpd) are shuffled when in fact only 800 thousand bpd of this is high carbon-intensity crude oil imported to the U.S. While Big Oil’s inflation of numbers is not surprising, this seems to be a pretty eye-popping one and another example of the industry’s disregard of their own industry facts. We've corrected this error in our estimates.
- The real story is that a national LCFS will displace the need for dirty, energy-intensive sources like tar sands. The LCFS will also push tar sand producers to decrease their carbon intensity. Indeed, if 50% of the tar sand sources are displaced by cleaner fuels, together with another 25% of the dirtier crude oil producers reducing their CO2 emissions, the LCFS would achieve an additional 21 MMT CO2e reductions on top of the large net benefits shown above.
Why is the NPRA grasping at straws and focusing on theoretical increases from ocean vessel and pipeline emissions? My guess is that Big Oil would rather delay, obfuscate, and lobby rather than invest, innovate, and provide us with lower carbon, alternative fuels. That is exactly why, it turns out, we need a low carbon fuel standard.
[1] Department of Energy, An Evaluation of the Extraction, Transport and Refining of Imported Crude Oils and the Impact of Life Cycle Greenhouse Gas Emissions, March 27, 2009. DOE/NETL-2009/1362.
[2] This estimate assumes the U.S. Energy Information Administration’s forecast for transportation sector GHG emissions and that a national LCFS results in a 10% reduction in the carbon-intensity of the sector on a lifecycle basis.