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									                Comparing Approaches to Life Cycle Analysis of Crude Oil


                                        Key Messages
      From a Workshop organised by the Centre for European Policy Studies (CEPS)
                                  Brussels, 21 March 2011


Given the impact of crude oil on the local and global environment, numerous life cycle analyses
on crude oil and oil sands have been undertaken. These studies have reached different results.
On 21 March 2011, CEPS held a half-day workshop to discuss life-cycle and well to wheel
assessments and to present and compare three different studies with the aim to point out
differences, identify knowledge gaps and discuss possible policy implications of the various
approaches. The overarching objective was to increase understanding of the reasons for the
differences by trying to identify sources for disagreement, e.g. data, methodology, political
preferences or other.
The approximately 35 participants in the workshop were experts from academia and the policy-
making community, as well as from the broader stakeholder community including industry and
environmental non-governmental organisation. The workshop was designed to allow maximum
time for discussion. It was supported by the Mission of Canada to the European Union. Please
see the Annex for the Agenda.
The presentations made at the workshop can be accessed through the following link:
http://www.ceps.eu/content/workshop-comparing-approaches-life-cycle-analysis-crude-oil

                                        Key Messages
As the workshop has been held under Chatham House Rules, the following Key Messages
constitutes a summary by Christian Egenhofer, Senior Research Fellow at CEPS and Chairman of
the workshop. Although a draft has been circulated to all workshop participants for comments,
the content remains the sole responsibility of the author.
Methodologies
1. There was an agreement among the authors of the three studies (i.e. Jacobs Consultancy,
   Stanford University, CERA) that the quality of each others’ work was strong, and that
   differences in the lifecycle GHG values they presented can be traced back to the questions
   that the studies are trying to answer. For example, the difference of outcome of the Jacobs
   Consultancy stems from the fact that it was based on a first principle engineering model of a
   generic process/utility configuration analysed a particular project while the other two
   studies focus on industry average emissions.

2. Variations of outcomes of studies can in addition be explained by different assumptions.
   These differences typically include system boundaries (i.e. what is incorporated and what
   not?), reliability of data, baselines, structure of the refining industry, assumed rate of
   improvements or the sudden use of a new technology or process, and the way refining,
   transport or land-use are calculated. The variation in lifecycle GHG emissions of
   conventional oil is primarily affected by GHG emissions associated with crude production


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    and in particular depends on several factors, including reservoir geology, maturity of the
    well, crude viscosity and production methods1. Production methods, including flaring and
    venting of associated gas, can have a major impact on GHG emissions. There was agreement
    by all researchers of the benefits from more comparative studies.

3. It became clear that lack of available data and the questionable quality of data on the
   emissions of global crude sources remains an important issue for further work and policy
   development. However, there were differences in the conclusions on this issue. Some
   argued that the weakness in the data undermines the sound policy basis of government
   regulations that are intended to be based on the carbon content of crude oils. Others
   expected that the increasing focus on regulation will ultimately lead to better data
   developed by researchers, governments and industry itself, which has an interest in
   accurate data sources to be used by governments. Obtaining better data over time may be
   possible in some OECD and other developed countries but may find its limits in other
   regions of the world.

4. The view was expressed by some participants that the EU and other OECD and developed
   countries may be well served to discuss the gaps in data availability and quality and its policy
   implications in an international setting, whether in an existing or new forum. Such a forum
   could for example explore protocols and/or agreed methodologies to calculate GHG and
   other emissions. Other issues such discussions could address are of course data, system
   boundaries and methodologies to normalise refining and transportation issues.
Policy Issues
5. The authors of the three main studies agreed that oil sands do not necessarily have the
   highest emissions of all crude oils. Although on average oil sands do have higher GHG
   emissions than average crude oil emissions, in some cases crude oils can emit more than oil
   sands. As an example, the case of Nigeria was mentioned: The country supplies 3-4% of EU
   crude imports and continues to flare, but because this activity is illegal it may not be fully
   accounted in the footprint.

6. Some argued that high-carbon crudes are incompatible with EU GHG reduction objectives,
   especially for the long term and consequently would make achievement of these targets
   more difficult. Others held that within the GHG intensity target the EU has set, it did not
   matter which crudes were brought to the EU as long as suppliers found a way to meet the
   target. If EU legislation discourages the use of high-carbon crudes, they would be used
   elsewhere, which could result for example in sub-optimal trade flows with higher emissions
   globally as a result of trade diversion, as well as higher costs for Europe.

7. It was argued by some that policies based on life cycle analysis have the most impact on
   countries that have transparent GHG monitoring regimes (effectively penalizing them for
   their transparency). It was also argued by some that there might be inadvertent impacts
   from increased monitoring (i.e. when flaring is penalized, some countries might be attracted

1
  According to a study undertaken by CARB – Detailed California-Modified GREET Pathway for Ultra Low
Sulfur Diesel (ULSD) from Average Crude Refined in California from January 2009, GHG emissions emanate
as follows: Crude production (8%)n crude transport (1%), oil product transport (< 0.5%), crude refining
(13%) and tank to wheel (78%) (taken from presentation of Jacobs Consultancy slide 7).

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    to venting gas which has 25x more GHGs, and cannot be captured by satellite imagery as
    flaring can be).




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ANNEX
Agenda:
Chair: Christian Egenhofer, Senior Research Fellow, CEPS
12:30 Sandwich lunch
13:15 Introduction to the workshop: motivation and objectives
      Christian Egenhofer, Senior Research Fellow, CEPS
13:30 Well-to-Wheels: Setting the scene
      Michael Lane, Concawe
13:45 Short overview of the European Platform on LCA and the current state
      Cristina de la Rua, Joint Research Centre, European Commission
13:55 Presentations of 3 studies (30 minutes each)
        Ian Moore, Jacobs Consultancy
        Adam Brandt, Stanford University
        Jackie Forrest, Cambridge Energy Research Associates
15:25 General discussion
16:15 Open discussion led by the Chair on a number of themes such as data,
      methodologies, political preference, other.
17:15 Chair’s conclusions
17:30 End of workshop, followed by light refreshments




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