May 6, 2013 | 12
By Scott McNally
With the U.S. Department of State currently reviewing TransCanada’s application for a presidential permit of the Keystone XL pipeline, protests from environmental groups opposing the pipeline have been heating up. The main reason for the opposition to the pipeline is that environmentalists generally consider oil sands to be “dirty” – partially because mining oil sands results in a lot of surface disruption and water pollution concerns, but also because it takes a lot of energy (in the form of burning natural gas) to produce and upgrade oil sands. Therefore, the carbon footprint, and the energy required to produce oil sands, may be higher when compared to conventional oil. I recently spoke at the 2013 Connecting the Dots energy conference at Stanford University, and one anti-Keystone attendee raised an interesting point. He said, “Because you burn so much natural gas upgrading oil sands, you actually use more energy than you get from the oil. The only reason they are doing it is because oil is so valuable and natural gas is so cheap! The energy return is negative!”
That claim was quite alarming. Would Canadians really put more energy into producing oil sands than they would get out? After all, a low energy return on energy invested is one argument against corn ethanol (actually, for every unit of energy you put into growing, harvesting, refining and transporting corn ethanol, you get about 1.3 units of energy out. So it is borderline but slightly positive.).
As it turns out, researchers have been investigating the answer to the oil sands energy return question. That is, how much energy goes into oil sands compared to how much energy we get out? This relationship is generally known as the Energy Return on Investment (EROI), but it can go by many names (net energy return – NER, energy return ratio – ERR, and so on). For conventional oil, this number can range from around 5 to around 30, depending on where you are and how you are producing the oil. The average EROI for oil these days is about 18. That means for every 1 unit of energy you put into locating, drilling, and producing that oil, you get 18 units of energy out. For ‘easy conventional oil’ in places like Saudi Arabia, the EROI is likely much higher than the average, but for ‘hard unconventional oil’, like oil sands, tight oil, or deepwater offshore, the EROI is often lower than the average.
However, a disturbing trend has been uncovered by researchers at the State College of New York. According to their analysis, our global energy return on investment has been getting worse over time. Much worse.
Why is this trend happening? Well as you can imagine in the early days of oil production, we didn’t really know what we were doing. We didn’t really understand geology. In fact, the theory of plate tectonics had not even been conceived yet. However, there was a lot of easy oil around. In many places, it just bubbled out of the ground, and you could literally dig it up with a shovel. Over time, as we learned more about geology and technology, we got more and more efficient at extracting oil, and our EROI kept going up. But then something happened. The rate at which we were producing easy oil outpaced the rate at which we were becoming more efficient. According to the study at the State College of New York, oil produced in 1992 had an EROI of 26, and in 1999, the EROI had increased to 35. But since then, the EROI has been declining dramatically. In 2006, the average EROI was 18 – about half of what it was less than a decade earlier. Now these numbers come from just one study, and while they may not be perfect, they highlight an important trend. Today, we have to go farther, work harder, drill deeper, spend more energy, and turn to unconventional sources like oil sands to satisfy our demand for oil.
So how bad is the Energy Return on Investment for oil sands?
From a societal perspective, surprisingly, it may actually be good. Just in the province of Alberta, Canada, there is about 1.7 trillion barrels of oil. How much oil is that? It is a little bit more than the total amount of oil that humankind has used so far. That’s right; Alberta has more oil than all humans have used to date. In addition, because oil sands tend to be in remote locations, the extraction process has become energy self-sufficient. Energy independent, if you will. In the process of extracting oil sands, you can use some of what you produce to fuel the production process. Therefore, you don’t need to use much external energy at all. You don’t need to pipe in natural gas, use electricity from a power plant, or even take diesel from a refinery to fuel your trucks. According to a recent study at Stanford University, from an external perspective, the EROI for oil sands is a whopping 30, almost twice as good as the current conventional average.
However, from an internal EROI perspective, oil sands are not so good. Even though you are using energy that was internally produced, you are still using energy. If you include this energy in the total, the EROI for oil sands is around 5. And because you have to use more energy to fuel the process, this could mean more carbon emissions per barrel of oil produced.
But – oil sands emissions do not have to be so high. When oil sands are ‘upgraded’, they are actually converted from a heavy tar into three things: a synthetic natural gas, a light, low carbon oil, and petroleum coke. (petroleum coke is a black powdery substance that is mostly made up of carbon. It is very similar to coal.) Much of the natural gas goes back to fuel the process, and the light oil is sold (or blended with heavier oil, and then sold, like in the case with Keystone XL). The natural gas and light oil produced from oil sands have a lower carbon footprint than conventional oil because so much of the carbon goes into the coke. Thus, the total carbon footprint of oil sands all depends on what you do with the coke. If you burn the coke, or sell it to someone that burns it (coal plants often buy coke – it is a good substitute for coal), the carbon emissions will be high. But in some oil sands production fields, the coke is actually sequestered (buried) back in the mine. If this is the case, the oil sands will have a smaller carbon footprint, but will also have a lower EROI, since coke contains energy.
Now, how bad or good you think oil sands are is all a matter of perspective. If you want to reduce oil imports from the Middle East, become North American Energy Independent, and produce more oil to fuel society, than oil sands have a clear benefit. If you are primarily concerned about carbon emissions, we should really get off oil – including oil sands – altogether.
Scott McNally holds a bachelor of science degree in chemical engineering from the University of Texas at Austin. He is pursuing dual master’s degrees in energy resources engineering at Stanford University and in public policy at Harvard University. Scott has previously worked as a renewable energy project administrator at Austin Energy, a project development engineer at Shell Oil Co., an energy and climate research intern at the White House Council on Environmental Quality, and an Oak Ridge Institute for Science and Education fellow at the U.S. Department of Energy. He was originally invited to submit guest posts by Plugged In’s Melissa C. Lott.
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