Report: Carbon-Neutral Oil Sands SCO Possible for an Extra $1.76 to $13.65 a Barrel
24 October 2006
|Annual Projected GHG Emissions (Mt CO2e) from Canada’s Oil Sands, 2003–2020 (showing the range between low and high projections). Click to enlarge.|
In a report released by the Pembina Institute, a detailed cost analysis demonstrates that the oil sands industry could achieve carbon-neutral (no net greenhouse gas emissions) production of synthetic crude oil (SCO) for as little as US$1.76 per barrel or as much as US$13.65 per barrel depending upon the operating scenario and the approach taken.
The oil sands are projected to contribute up to 47% of the projected business-as-usual (BAU) growth in Canada’s total greenhouse gas (GHG) emissions between 2003 and 2010, making them the single largest contributor to Canadian GHG emissions growth.
For as little as US$2.50 per barrel an oil sands company could eliminate 100 per cent of its GHG pollution. To put this in perspective it costs up to US$1.75 per barrel to remove lead from gasoline.—Marlo Raynolds, executive director of the Pembina Institute
The report, entitled Carbon Neutral by 2020: A Leadership Opportunity in Canada’s Oil Sands, describes a variety of solutions including energy efficiency, fuel switching, carbon capture and storage (CCS), and carbon offsets. The detailed cost analysis assessed the costs of utilizing carbon capture and storage and carbon offsets to achieve carbon neutral oil sands production. It considers three scenarios:
- Maximum CCS: all point sources are captured and stored;
- Moderate CCS: only CO2 from hydrogen production is captured and stored; and
- Maximum Offsets: CCS is not used and all emissions are offset.
The report evaluates those scenarios in three operating situations under both low and high emissions conditions:
- 55% mining and 45% in-situ;
- 100% mining; and
- 100% in-situ.
GHG emissions intensity for a given oil sands operation can vary depending on a number of key factors, including:
- Variability in bitumen quality;
- Level of process integration (affecting level of energy efficiency);
- Technologies applied (gasification can greatly impact hydrogen production values);
- Fuel source for electricity generation; and
- Types of process controls utilized.
|Cost range per barrel of synthetic crude oil (SCO) for carbon neutralization. Click to enlarge.|
The Pembina authors conclude that costs for full carbon neutralization across the range of conditions could range from US$1.76 to US$13.65 per barrel. (See chart at right.) Costs per barrel of synthetic crude oil are slightly higher when maximizing CCS options over purchasing offsets.
The report urges oil sands companies to assume a leadership role in tackling climate change, and recommends that they set a target of becoming carbon neutral by 2020.
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