Canadian Oil: Maybe Not The Villain It’s Been Made Out To Be

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Canadian Oil: Maybe Not The Villain It’s Been Made Out To Be

By Darci Stanger, Senior Editor

Canadian heavy crude oil, which is extracted mostly in the oil sands of northern Alberta, has long been labeled as “Dirty Oil” and many trade partners have attempted to block its importation. The European Union recently attempted to change legislation to prevent the importation of this type of Canadian oil into the EU.[1] The legislative change likely would have been passed if the trade sanctions against Russia had not prevented the EU from importing oil from Russia, making Canadian oil an essential EU energy resource, as it was already a secured supply.[2] The U.S. has also recently taken measures to restrict the importation of Canadian oil from the oil sands, rejecting and scrapping the Keystone Pipeline XL project. During a speech on Friday, November 6, 2015, President Barrack Obama explained that “shipping dirtier crude oil into our country would not increase America’s energy security,” the U.S. is attempting to “reduce our reliance on dirty fossil fuels,” and “approving the project would have undercut [the U.S.’s] global leadership [in fighting climate change].”[3]

Negative effects on climate change, deforestation, and danger to wildlife have long been cited as some of the reasons to oppose Canadian crude oil because of the extensive amount of energy utilized to extract and refine the oil. While Canada produces several types of oil, the majority of criticisms are directed at bitumen that is mined from the Canadian oil sands. Bitumen is too viscous to flow through pipelines, so it is often diluted with condensate or some other gas before being transported, createing what is referred to as dilbit.[4] It is this dilbit that contains the crude oil that is often criticized. But these criticisms may mischaracterize the picture. Canadian oil may not actually be the dirtiest oil.

Data Shows Canadian Oil not the Dirtiest

When Canadian dilbit, an oil blend that contains crude from the oil sands, is compared to dilbit from other areas of the world it has been shown to produce a lower level of upstream emissions. California’s Low Carbon Fuel Standard released findings that may be surprising to many regarding diluted bitumen (“dilbit”) and upgraded synthetic crude (“SCO”):

  • “There are 13 oil fields in California, plus crude oil blends originating in at least six other countries, that generate a higher level of upstream greenhouse gas emissions than Canadian dilbit blends;
  • Crude oil from Alaska’s North Slope, which makes up about 12 per cent of California’s total crude slate, is actually ‘dirtier’ than the Canadian dilbit known as ‘Access Western Blend’;
  • The ‘dirtiest oil in North America’ is not produced in Canada, but just outside Los Angeles, where the Placerita oil field generates about twice the level of upstream emissions as Canadian oilsands production; and
  • The title of ‘world’s dirtiest oil’ goes to Brass crude blend from Nigeria, where the uncontrolled release of methane during the oil extraction process generates upstream GHG emissions that are over four times higher than Canadian dilbit.”[5]

This data seems to be contrary to some of the comments that President Obama made regarding the reliance on dirty fossil fuels because the Gulf Coast refineries will continue to rely on oil that has been shown to be much dirtier than the Canadian oil , as the Gulf Coast refineries are much better equipped to refine heavy international crudes.[6]. In fact, much of the oil exported to the EU from the U.S. has a much higher emissions level than that of Canadian dilbit.[7] And perhaps the most astonishing evidence that the opposition to the Keystone Pipeline XL project is unfounded lies in the fact that roughly “80 percent of the emissions attributable to a barrel of oil occur during the downstream combustion of refined fuel in a vehicle –not during the upstream production of crude oil.”[8] So it appears that the real battle should not be with the actual production and transportation of crude oil but rather with the refinement and combustion of this oil.

The overwhelming criticism directed at Canadian bitumen seems largely overblown when many parts of the world are producing oil that has been shown to be much dirtier. Keystone XL, however, has been rejected by the United States, and Canadian oil producers will need to find another way to get their oil to market. This will likely include methods more environmentally harmful than the pipeline, such as transportation by train or truck.

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[1] Darci Stanger, “Dirty” Oil Supply: Geopolitical Turmoil Sinks Environmental Concerns, Georgetown Envtl. L. Blog (Oct. 16, 2014), https://gelr.org/2014/10/16/dirty-oil-supply-geopolitical-turmoil-sinks-environmental-concerns/#more-1533.

[2] Id.

[3] Polly Mosendz, Read: The Full Transcript of President Obama’s Speech Rejecting the Keystone XL Pipeline, NEWSWEEK (Nov. 6, 2015, 1:13 PM), http://www.newsweek.com/read-full-transcript-president-obamas-speech-rejecting-keystone-xl-pipeline-391609

[4] Canadian Ass’n of Petroleum Producers, http://www.capp.ca/canadian-oil-and-natural-gas/oil-sands/oil-sands-development (last visited Nov. 21, 2015).

[5] Peter Burn, How Clean is Our ‘Dirty’ Oil? You’d be Surprised, IPOLITICS (Jul. 18, 2014, 4:27 PM), http://ipolitics.ca/2014/07/18/how-clean-is-our-dirty-oil-youd-be-surprised/.

[6] Javier E. David, U.S. Oil Output Booms –Now Refiners Have to Catch Up, CNBC (Jul. 13, 2014, 12:02 PM), http://www.cnbc.com/2014/07/13/us-oil-productoin-refiners-struggle-with-fruits-of-us-shale-boom.html.

[7] Id.

[8] Id.

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