Consultant report

Effects of possible changes in crude oil slate on U.S. refining sector CO2 emissions

This study by MathPro considers the effect that possible changes in the set of crude oils entering U.S. refineries and the mix of gasoline, diesel, and other products they produce—generally termed the crude oil and refined product “slates”—could have on emissions from the refining sector. In the coming decade, unconventional oils such as tar sands bitumen and fracked tight oil are likely to play an increasingly important part in the U.S. fuel mix. At the same time, a combination of improved vehicle fuel-efficiency standards and increased blending of ethanol are likely to reduce the ratio of gasoline to diesel in the refined product mix. In this study, eight possible future crude slates, ranging from very light (dominated by an expansion of tight oil) to extremely heavy (dominated by increased imports of bitumen) are modeled against five possible future refined product slates with gasoline-to-diesel ratio ranging from 1.16 down to 0.81.

The study finds that refining heavier oils will increase average emissions from the sector. For instance, 2025 carbon dioxide (CO2) emissions in the ‘very heavy’ oil slate case for a product slate based on the recently adopted automobile efficiency standards would be 30 million tonnes CO2 per annum higher than they would be with the current mix of crude oils—a 12% increase. This does not include the extra emissions from the energy intensive process of extracting bitumen and other extra heavy oils in the first place. If, on the other hand, the U.S. transitioned to a very light oil slate, rejecting bitumen and increasing the supply of tight oil from formations such as Bakken and Eagle Ford, sectoral emissions could drop by a similar amount (25 million tonnes per annum, 10%). Note that the petroleum refinery CO2 emissions that are the subject of this analysis are typically about 7%–9% of overall lifecycle petroleum emissions (the full lifecycle includes extraction, transport, refining and distribution).

A changing refined-product slate will also impact refinery emissions. The adoption of automobile efficiency standards and the introduction of E30 ethanol blends to reduce the gasoline to diesel ratio could reduce emissions by up to 42 million tonnes of CO2 per annum, 17% (with the base crude oil slate, compared to a reference case with the old CAFE standards). Combining a move to a lighter oil slate with a reduced gasoline to diesel ratio would deliver the largest possible refinery emissions reductions. As well as increasing CO2 emissions, transitioning to a heavier oil slate would require increased refinery investment to expand capacity for high conversion processes such as coking and hydrocracking.

In terms of carbon emissions per unit energy of crude input to U.S. refineries, the results span a range from 6.3 gCO2e/MJ to 7.9 gCO2e/MJ, i.e., varying by about ±10%. Emissions intensity would be 7 gCO2e/MJ in a reference case without the new CAFE standards and with no change in crude slate. For reference, the overall lifecycle emissions of gasoline and diesel use are of the order of 90 gCO2e/MJ for a ‘typical’ pathway. MathPro also considered a sensitivity case in which the production of petroleum coke by refineries (largely from coker units handling heavier crudes) would be eliminated by hydrogen addition. For the heaviest slates, this could increase average refining emissions to 10 gCO2e/MJ of crude input.

These findings indicate the importance of analyzing the full lifecycle impacts of the petroleum industry as well as petroleum product demands. The findings suggest that future fuel policy should consider the carbon intensity of refining processes (which are already covered by cap and trade regimes in California and Europe) if they aim to ensure the overall climate intensity of transportation fuels does not increase over time. There are opportunities to promote lower carbon fossil fuel pathways through regulatory, incentive, and industry-government partnership approaches.