White paper
Assessment of the scale of potential indirect emissions due to higher oil use
The inclusion of indirect land use change (ILUC) emissions in the life-cycle assessment of biofuels in several biofuel policies has led to increased attention to the question of whether there are similar, behavior-induced emissions sources that could, or should, be added when assessing the life-cycle carbon intensity (CI) of oil production. This study assesses a set of potential sources of indirect greenhouse gas (GHG) emissions, including:
- Induced land development
- Military involvement
- Carbon intensity of marginal oil
- Accidents (including oil spills and oil fires)
- Co-products and the carbon intensity of refining
- Price effects
The analysis shows that for several of the indirect effects studied, the magnitude and in some cases even the sign of their emissions is uncertain. Some effects, such as shifts in the carbon intensity of the marginal oil consumed, were potentially attributable to biofuels as well as crude oil.
The two effects with the largest potential impact on the life-cycle carbon intensity of crude oil are the price effect (or “rebound effect”) and the carbon intensity of the marginal oil supply. The price effect could be caused by an alternative fuel policy that decreases demand for crude oil, thus causing prices for crude oil to drop and increasing consumption (i.e., the drop in oil consumption would be less than the quantity of the alternative fuel mandate). Likewise, as oil consumption changes, the carbon intensity of the marginal oil being consumed could be either lower or higher than the average carbon intensity of the oil. The remaining effects were found to have either highly uncertain or relatively small levels of GHG emissions relative to ILUC.
None of the effects considered in this analysis would invalidate the use of an average or baseline carbon intensity value for fossil fuels in alternative fuel support legislation. Given that ILUC from biofuels is likely an order of magnitude larger than the possible indirect emissions factors associated with fossil fuel use, there is no reason that indirect effects estimated for fossil fuels need to be developed before ILUC factors could be implemented in regulations. ILUC emissions completely change the overall life-cycle emissions assessment of some biofuels, but the effects considered here would make only a modest difference to the baseline carbon intensity of fossil fuels.
