CARB Tackling Crude Oil’s Carbon Intensity in LCFS

Joanna Schroeder Biodiesel, Ethanol, Oil, Opinion

The California Air Resources Board (CARB) is getting ready to move forward with determining the carbon intensity of crude oil. On February 17, they are holding a Low Carbon Fuel Standard (LCFS) Crude Oil Screening Workgroup Meeting. For those following the LCFS debate, you’ll note that still under fire is CARB’s final ruling on the carbon intensity levels given for ethanol and biodiesel. When CARB determined the original levels of corn ethanol, it essentially barred the fuel from qualifying as a low carbon fuel. While CARB has amended corn ethanol’s carbon intensity levels, basically allowing corn ethanol back into the marketplace, the amendment doesn’t take take effect until July 1 although LCFS took effect on January 1 of this year.

Now it’s oil turn to be under fire. In California, 40 percent of the state’s fuel supply comes from TEOR petroleum, while 10 percent of the gasoline is blended with ethanol. Life Cycle Associates have found the value for Thermally Enhanced Oil Recovery (TEOR) to be at least 109, though it might approach 120, and to have a carbon intensity value of 20 for total production and transportation. Ironically, this is in the same ballpark as corn ethanol. They are critical of the original GREET model, which found the value to be much lower originally, near 96.

The Western States Petroleum Association (WSPA) submitted a letter to CARB with their recommendations of how crude oil should be treated under LCFS. They believe that crude oils should not be differentiated. So oil produced from tar sands should be treated the same as oil drilled in Alaska. Second, they believe that “future production from the same geographical areas and using the same techniques as represented in the 2006 California baseline, are extensions of that baseline and should receive the same treatment.” In other words, new oil fields should not be subject to a screening process and this is important because the state is moving to open new TEOR oil fields that were once considered too uneconomical to extract the oil.

Third, WSPA is arguing that given that the regulations currently call for differentiation of crudes that are not included in the 2006 baseline into high carbon intensity crude oil (HCICO) and non-HCICO categories, WSPA has been working with staff and other stakeholders in the HCICO Workgroup to develop a process to make the necessary categorizations. Finally, once the categorizations are in place, they are asking for a retroactive application of the carbon intensity of re-classified crudes. Ultimately, WSPA offered up a proposed model for the crude oil screening process.

What the ethanol industry is lobbying for as a result of the meeting is that it will be determined that TEOR is required to be submitted to a full “Method 2B” carbon intensity determination, which opens the fuel pathway up to a thorough review including public comment. In addition, they hope that CARB’s workgroup ultimately assigns a value between 109 and 120 as the carbon intensity value. Since carbon intensity does often increase over time and there is variability from one well to the next, it would seem correct to set the value near the upper band of possible values.

So on the surface what doesn’t seem to be taken into account in regard to the “sustainability” of crude oil – water use. CARB has a committee that is reviewing the sustainability of biofuel production and this committee will, in time, make recommendations on whether a fuels’ carbon intensity level should also be measured by its sustainability score.

It takes an immense amount of water to produce oil as steam is used in the extraction process – anywhere from 2.5 barrels of water per barrel of recovered oil, all the way up to 8.4 barrels of water per barrel of oil depending on the age of the well, location and type (tar sands use a crazy amount of water). If you calculated the amount of water used in California to produce oil, a state that is water poor, than I don’t believe that water use can be ignored. I realized I’m opening up a can of worms, but the biofuel industry, in comparison, uses significantly less water per gallon and as the technology improves, water use declines.

In summary, it will be interesting to see if CARB treats crude oil in the same fashion as they have treated biofuels. Fortunately, we now have some biofuel delegates on the LCFS panel and hopefully this will work in favor of biofuels.

Biodiesel, Ethanol, Oil, Opinion