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Study: Oil Transition Carries Major Environmental Risks
8 December 2006
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| Global supply of liquid hydrocarbons from all fossil resources and associated costs in dollars (top) and GHG emissions (bottom). Click to enlarge. |
The increasing use of substitute fossil-based liquid hydrocarbons—either unconventional crude oils or synthetic liquid fuels (synfuels)—will dramatically increase global greenhouse gas emissions unless mitigating steps are taken, according to a new study by researchers at UC Berkeley.
The authors argue that the global energy system is in the early stages of a transition from conventionally produced oil to a variety of substitutes, bringing economic, strategic, and environmental risks. They further argue that without appropriate policies, tradeoffs between these risks are likely to be made so as to allow increased environmental disruption in return for increased economic and energy security.
Their work is reported in the paper “Risks of the Oil Transition,” published in the new Institute of Physics open-access electronic-only journal, Environmental Research Letters (ERL).
Liquid fuels for transportation are increasingly coming from a wide range of sources other than conventional petroleum. We call this the oil transition and we conclude that the environmental risks associated with this transition are much bigger than the risk to a country’s economy or the security of their fuel supply.
—Alex Farrell, lead author
Under the category of substitutes for conventional petroleum (SCP), the authors consider synthetic crude produced from oil sands and oil shale, heavy oil production, and Fischer-Tropsch synthetic fuel production.
We have calculated that production of fuels from low-quality and synthetic petroleum, such as tar sands, could have greenhouse gas emissions 30%-70% greater than the emissions from conventional gasoline. Tar sands are already being used as a source for gasoline, with over one million barrels refined each day in Alberta, Canada. With oil selling for $60/barrel on the international market, the $30/barrel production cost for tar sands is no longer an obstacle to production as it used to be.
—Alex Farrell
The authors suggest approaches that can mitigate all three risks, beginning with the diversification of energy supply and including demand reduction and better transportation planning.
Fossil-based SCP technologies with CCS [carbon capture and storage] could provide supply diversity in the near term if adequate investments were made. Because of the fuel-related GHG emissions, fossil SCPs might be appropriate only as a short-term response, although the path dependence of energy system investments suggests there may be no such thing as a purely short-term response.
The true challenge of the oil transition is to develop and deploy environmentally acceptable energy technologies (both supply and demand) rapidly enough to replace dwindling conventional oil production and meet growing demand for transportation energy.
Because of the large environmental and security externalities involved, markets alone will not respond to this problem, so government policies to manage the all three risks of the oil transition are needed now.
Resources:
“Risks of the oil transition”; A E Farrell and A R Brandt; Environmental Research Letters, Volume 1, Number 1, October-December 2006
December 8, 2006 in Carbon Capture and Storage (CCS), Climate Change, Coal-to-Liquids (CTL), Gas-to-Liquids (GTL) | Permalink | Comments (31) | TrackBack (0)
Comments
Posted by: JJ | December 09, 2006 at 07:57 AM
Allen,
I tend to agree with your assessment. They say you will not realise peak oil until after the fact. Will we reach 100 million barrels a day before peak? With India and China coming online, we better hope so.
Posted by: SJC | December 09, 2006 at 12:05 PM
Right wing climate killers out of U.C. Berkely?Not exactly a bastion of evangelical or "big oil" science.They went through pains to avoid hyperbole and simply paint a picture of where we are in energy.We are letting the market find the alternatives and assuming it will successfully pick the correct path.It may well pick the right path for security and affordability but lead to significantly worse environmental impact.That is why they call for govt to "manage"{regulate}the risks.Not exactly the call from a big oil whore.
Posted by: Earl | December 10, 2006 at 06:20 AM
Engineer-poet
I think you will find that this study will provide the incoming congress with the understanding that they need to look at such things as the legacy fleet.The congress will want to reward their home {corn,coal,shale}state.They are already pointing to these efforts as steps towards cleaner more secure energy future.There is a whirlwind of alternative energy activity.Without a plan the combination of market priciples and pols pandering could lead to a bad end.Meet the new boss{dems} same as the old boss{repubs} we wont get fooled again.Or will we?
Posted by: Earl | December 10, 2006 at 06:39 AM
It is good to look at all sides of the issue. Using coal to make ethanol does not sound good. Using natural gas to get tar sands oil could be wasteful. When there is profit to be made, sometimes other issues are not fully considered.
Posted by: SJC | December 10, 2006 at 09:43 AM
Mr Brandt,
congratulations on a very thoughtful, as well as thought provoking paper.
I have a specific question on your methodology regarding the cost-ranges for substitutes: are those just operational costs, or do they include the cost of capital? The reason I am asking is that, with respect to the tar sands resources, my understanding is that they are extremely capital-intensive, which may not necessarily be the case for GTL. In that case I would expect to see GTL to be more comparable to tar sands/heavy oil on cost basis.
On the other hand, the quoted costs for GTL probably do not reflect the opportunity costs of selling the gas directly for other purposes: electricity generation, industrial, heating, etc. In other words, is it economically attractive for gas companies to produce GTL fuel at $20-30 per bbl to be sold for $60 per bbl, as compared to producing natural gas for ~$1 per MMBTU to be sold for $8 per MMBTU? Unlike coal, there is just not that much gas around for the synfuel to be fully incremental to gas sales. There will have to be some trade-off and resource allocation.
Posted by: Krassen Dimitrov | February 20, 2007 at 05:45 PM
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What the report seems to be saying is that at +$60 a barrel, bad fossil based liquid hydrocarbon sources (tar sands, heavy crude, bla, bla, bla etc) will become a financially viable source. That is, if compaies spend billions of dollars to develop these bad sources then they be around for a long time to come and they won't go away until some sort of return on investment (ROI) is realized. I think the hope of all readers of this site (GCC) is that Bio/Renewable sources (BTL, Wind, Solar, PHEV's, EV's, bla, bla, bla - I KNOW I LEFT OUT A LOT OF OTHERS BUT PLEASE CONSIDER THEM INCLUDED BY REFERENCE -- WHAT EVER THEY MAY BE!) will be able to bubble to the top of the "Competitive Free Market" choice of fuels -- a little tax help from all Governments around the world could help wean us all off of those remaining bad carbon sources but we need to do that sooner rather then later -- or before they spend billions developing these bad sources.