No. This is a gasoline versus diesel fuel story.

Note that 100% of the transportation sector GHGs realized in Europe between 1990 and 2007 derive from the shift of the passenger vehicle fleet from gasoline (‘petrol") to ultra low sulphur diesel fuel. Alberta’s oil sands are relatively high (but not the highest) GHG generators if they are used to make gasoline.

But wellhead-to-tailpipe GHGs fall, significantly, when we convert oil sands feedstocks to ultra low sulphur diesel and incent the passenger vehicle market to shift—as Europe has done—from gasoline to diesel consumption.

Finally, the best potential "sink" for refinery CO2 is into bioreactors that make biodiesel from algae. This biodiesel can be run through refinery hydro-crackers to stabilize the biofuel for use in cold climates, then blended with petroleum-based ultra low sulphur diesel.

When we combine the same passenger vehicle fuel switch strategy with the integration of the biodiesel blend into the fuel supply for commercial and heavy duty diesel trucks, Canada can achieve a much deeper reduction in transportation sector GHGs than Europe has achieved, in less time and at lower cost. If we shut down the oil sands, this solution falls out of reach.

Please note that Ontario’s three refineries increasingly rely on oil sands feedstocks. It is not just Alberta resource producers that are at risk when "oil sands shutdown" is suggested. All three Ontario refineries would also likely shut-down, as a result. If they do not shut down and we cut eastern Canadian refiners off from the Alberta oil sands feedstocks, they will become increasingly dependent on potentially higher GHG Nigerian and Venezuelan crude oil imports.

Therefore, a rational Canadian GHG management plan would possible be entitled: "Canada: Diesel Nation". Of course, I would not have made this recommendation before ultra low sulphur diesel was made available in Canada. Now that we have lowered the sulphur levels in Canadian diesel fuel supply, diesel passenger vehicles can operate efficiently after catalytic converters and fine particulate traps have been installed to also reduce smog-creating emissions. These established add-on technologies could not function in combination with higher sulphur diesel.

How Do Oil sands GHGs Compare to Other Crude Feedstock Supplies?

Upstream extraction, transport and upgrading ("recovery") GHGs are higher than the range of oil sands GHG factors (illustrated by high and low technology options in the last two columns in the following graph) for 27%of current US crude oil supplies. Most notably, GHGs associated with the recovery of 2/3 of California onshore crude oil supply are substantially higher than the GHGs associated with crude feedstocks originating in the Alberta oil sands.

The California Low Carbon Fuel Standard disguises this agreed fact by assigning a single common recovery GHG factor to all crude feedstocks used in California refineries (65% Saudi, Mexico, 25% California thermal, 10% other). Then the LCFS assigns a discrete and conservative (high) GHG factor to feedstock from the Alberta oil sands. This procedure creates a cross-subsidy for California crude—a subsidy that is largely born by suppliers of crude oil from Saudi Arabia and Mexico.

The graph of refining GHG emissions below actually overstates the refining GHGs associated with most of the oil sand-originating feedstocks that are used in the US. This is because most oil sands feedstocks are used in refineries that are designed to maximize diesel/distillate output.

The GHG factors immediately below reflect the use of oil sands feedstocks in refineries geared to maximize gasoline, not diesel, output.

On average, GHGs from refineries that convert oil sands-originating feedstocks primarily into diesel and distillates discharge up to 15% less GHGs, per MJ of finished product, than refineries that convert that feedstock into gasoline (as illustrated in the second graph below). But there is little difference between gasoline and diesel upgrading/refining emissions for the other feedstocks.

When we look at actual wellhead to gas pump for gasoline, considering the actual mix of gasoline and diesel produced in the US from these feedstocks, the GHG factor for gasoline made from Alberta oil sands-originating crude is—as expected—slightly higher than the US average (107.6grams of CO2 per megajoule of energy produced).  But it is not as high as the GHG factor for gasoline derived from California heavy oil (2/3 of California onshore oil production). And the differential, relative to the US average, is 3.7%, not the oft-cited 15%.

This  3.7% difference is not statistically significant given the estimation error associated with any GHG estimation exercise.

If all Alberta upgraders and refineries co-generated steam and/or hot water for district heating, the GHG factor for even gasoline derived from oil sands feedstocks would drop well below the US average.

So if we ruled that all Alberta upgraders had to add heat co-generation at existing upgraders and refineries to supply new district heating systems—using well-proved and tested technologies—and we commercialize diesel from algae (already being done at a cement plant in Ontario), and if we incented the Canadian passenger vehicle fleet to replace gasoline-powered vehicles with Canadian diesel (adding another 15% to 40% reduction in tailpipe emissions to the reductions we will have realized in wellhead to gas pump emissions), Canada could very cost-effectively realize a substantial reduction in Canadian transport sector GHGs.

Read part II.