Energy & Technology
Leading by Example 2.0: How Information and Communication Technologies Help Achieve Federal Sustainability Goals
As the nation’s largest landlord, employer, fleet operator, and purchaser of goods and services, the federal government has the opportunity, if not the responsibility, to lead by example in moving our country in a more economically efficient and environmentally sustainable direction. Faced with tightening budgets, agencies are looking for new ways to reduce costs and increase productivity, while at the same time meeting a growing list of congressional and executive mandates to consume less energy and reduce greenhouse gas emissions.
The Center for Climate and Energy Solutions (C2ES) releases a new report, "Leveraging Natural Gas to Reduce Greenhouse Gas Emissions," outlining the climate implications of expanded natural gas use and potential uses and benefits in key sectors. C2ES President Eileen Claussen will lead a CEO-level conversation and Michael Webber, deputy director of the University of Texas Energy Institute, will lead a discussion of sector-specific recommendations for capitalizing on natural gas in power generation, buildings, manufacturing and transportation.Featuring:
President, Center for Climate and Energy Solutions
Vice President, Energy Policy, Center for American Progress
CEO, Dominion Resources
President, American Gas Association
Deputy Director, Energy Institute, The University of Texas at Austin, Moderator
Technical Director, Institute for Industrial Productivity
Vice President - Marketing and Business Intelligence, New Jersey Natural Gas
Federal Public Affairs Director, Waste Management
Executive Director, Deloitte Center for Energy Solutions
Judi Greenwald speaks about ways to spur carbon capture technology development,
I live in one of those northern and western suburbs of DC that tend to lose power fairly frequently.
It used to be that one of the few nice things about losing power was the sound of silence. But those days are gone. Now losing power has a new sound: the whirring of the startup of my neighbors’ backup generators.
We need power not only to keep our food from spoiling and protect us from uncomfortable and even dangerous heat, but also to stay connected. As a nation, we are becoming ever more dependent on electronic devices. We cannot survive without our cell phones and computers, let alone our refrigerators and air conditioners. At the same time, climate change threatens the reliability of the grid through more intense heat waves and potentially more powerful storms.
While it’s easy to say we should work to prevent disruption in electricity, how much should we invest to bolster the resilience of the grid? And who should pay?
TransCanada’s proposed Keystone XL pipeline has emerged as a symbolic flashpoint in the complex debate over energy, the environment, and the economy. Pipeline advocates argue that the project will create tens of thousands of jobs and – by increasing the flow of Canadian oil into the United States – will lower gasoline prices and strengthen energy security. Pipeline opponents counter that any such benefits will be minimal and far outweighed by the project’s environmental consequences, including an increase in climate-warming greenhouse gas emissions.
While each argument has some merit, the reality is less black-and-white than either suggests:
- If rising demand for oil continues to drive development of the Canadian oil sands, the oil is likely to reach global markets with or without Keystone.
- Increased imports from Canada would reduce U.S. reliance on oil from more volatile regions such as the Mideast. But because oil is a global commodity, prices are largely a function of global supply and demand, and the U.S. would still be vulnerable to price shocks as a result of geopolitical instability and other factors affecting global oil price.
- Most of the greenhouse gas emissions come from the tailpipes of vehicles powered by gasoline produced from the oil sands. But because the process of extracting oil from the oil sands is so energy-intensive, its total carbon footprint is larger than that of most “conventional” oil. More can and should be done to reduce the carbon emissions generated on the production side. But in terms of impact on the climate, the overall level of oil consumption is far more critical than the relative carbon profiles of different supplies.
Whether or not Keystone is built is likely to have only marginal implications for the price of gasoline or the pace of global warming. The most effective response to both challenges is to reduce demand for oil and over time end our reliance on it.
Here is a more detailed look at the issues behind the Keystone debate:
Figure 1. North America Pipelines
Source: Theodora. 2008. http://www.theodora.com/pipelines/north_america_oil_gas_and_products_pipelines.html.
Key: Crude oil pipelines (Green), Natural gas pipelines (Red), and Refined petroleum products (Blue).
Figure 2. Keystone Expansion Map
Source: TransCanada (2011)
What is Keystone? An extensive network of pipelines carries crude oil, natural gas and refined petroleum products across North America (Figure 1). One piece of that network is the 2,150-mile Keystone pipeline system operated by TransCanada (solid orange line in Figure 2), which has the capacity to deliver 730,000 barrels per day (b/d) of Canadian crude oil from Hardisty, Alberta to Wood River and Patoka, Illinois; Steele City, Nebraska; and Cushing, Oklahoma.
Keystone XL (dashed line in Figure 2) is a proposed expansion of the existing Keystone system, and is one of a number of projects being proposed to transport greater volumes of Canadian oil sands crude to world market. It would transport Canadian oil sands crude to the U.S. Gulf Coast for refining or export. The planned expansion consists of a northern and southern segment:
- The approximately 1,200-mile northern segment would travel from Hardisty, Alberta to Steele City, Nebraska via the Canadian Provinces of Alberta and Saskatchewan, and the U.S. states of Montana, South Dakota and Nebraska.
- The 532-mile southern segment, referred to as the Gulf Coast Pipeline and Houston Lateral Project (or Cushing Marketlink or Southern Keystone) would run from Cushing, OK to Port Arthur, TX and Houston, TX.
Keystone is not the only oil pipeline from the Canadian oil sands. The Alberta Clipper, a 1,000 mile crude oil pipeline operated by Enbridge between Hardisty, Alberta and Superior, WI, went into service in 2010 with an initial capacity of 450,000 b/d and will have an ultimate capacity of up to 800,000 b/d.
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Where does the Keystone XL proposal stand? On January 31, 2014, the U.S. State Department issued its final environmental impact statement on the northern segment of the pipeline. In April 2014, the State Department announced it was delaying its review, citing a Nebraska court challenge over a law allowing the governor to authorize the pipeline’s route. In January 2015, the Nebraska Supreme Court ruled the law was constitutional, clearing the way for the pipeline. The State Department has asked eight federal agencies (Departments of Defense, Justice, Interior, Commerce, Transportation, Energy, Homeland Security, and the Environmental Protection Agency) “to provide their views on the national interest with regard to the Keystone XL Pipeline permit application” by February 2, 2015. There is no explicit timeline for the permit process beyond the February 2 date. At the same time, a newly elected Republican majority in the Senate attempted to approve the pipeline via legislation; however, the measure was vetoed by the President in late February.
TransCanada first applied for a permit in 2008. In November 2011, the State Department delayed a decision pending further environmental review. The delay stemmed from the State of Nebraska's decision to seek an alternative route for the pipeline that would avoid the environmentally sensitive Nebraska Sand Hills. Congress then enacted legislation forcing a quicker decision. In January 2012, citing inadequate time to assess the pipeline’s environmental impact, President Obama denied the permit, but left the door open for an alternative route for the contentious northern portion of the pipeline.
TransCanada submitted a new application proposing alternative routes for the northern portion in April 2012, aiming for an in-service date of 2015. On January 22, 2013, Nebraska Governor Dave Heineman submitted a letter to the State Department announcing his approval of the route reviewed in the Final Evaluation Report of the Keystone Nebraska Reroute by the Nebraska Department of Environmental Quality (NDEQ). On March 1, 2013, the State Department issued a draft Supplemental Environmental Impact Statement (SEIS) on the project.
Construction on the southern portion of the pipeline, which did not cross the US-Canada border and so was not subject to State Department review, began in August 2012 and the renamed Gulf Coast Pipeline went in to service in early 2014. The project will have the initial capacity to transport 700,000 b/d to the Gulf Coast, and can be expanded to transport 830,000 b/d.
Why does TransCanada want to build Keystone XL? The impetus for this pipeline’s construction is to transport a greater volume of Canadian oil sands crude to world markets. Currently, infrastructure for transporting this crude to international ports is inadequate. Increased supply, both from the Canadian oil sands and U.S. oil production in North Dakota (Bakken formation), is currently bottlenecked in Cushing, OK. Additional pipeline capacity, including the reversal of the Seaway pipeline  and the construction of the southern portion of Keystone, is likely to reduce this bottleneck. Oil sands producers are also attempting to secure permits to build the Northern Gateway and TransMountain pipelines, which would provide an outlet to world markets via the coast of British Columbia. Furthermore in August 2013, TransCanada announced its intention to construct the Energy East pipeline to deliver 1.1 million barrels per day of oil sands crude to refineries and ports in Eastern Canada (Quebec and New Brunswick). At the same time, crude shipments by rail are underway and expected to transport more than 500,000 barrels per day by the end of 2014.
The long-term supply impact of adding Keystone XL to the North American crude oil transport system depends on a number of factors, including global supply and demand over time and whether other pipelines are built to carry Canadian oil sands out of Alberta. In the short run, a rise in deliveries of heavy Canadian oil sands crude to U.S. Gulf Coast refineries is likely to fill a supply gap being created by declining imports from traditional heavy crude suppliers, notably Mexico and Venezuela; a gap that would otherwise be filled by increases from other foreign suppliers, notably from the Middle East. Therefore, it is likely in the near-term that Canadian oil sands would be refined and consumed in the United States. In the long term, with changing market conditions, Keystone XL could help facilitate exports of crude or refined product from the Gulf Coast.
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How much does the U.S. rely on oil from Canada? Canada is the largest supplier of U.S. oil imports. In 2011, Canada, Mexico and Saudi Arabia were the top three suppliers of U.S. oil imports. Canada supplied nearly 24 percent of U.S. oil imports, while Mexico and Saudi Arabia each accounted for around 10.5 percent. In 2010, Alberta oil sands supplied 15 percent of U.S. oil imports. In 2011, total oil supplied by Persian Gulf countries (Saudi Arabia, Kuwait and Iraq) averaged 1.8 million b/d, compared to total Canadian imports of 2.7 million b/d.
Total U.S. oil imports peaked in 2005 and 2006 at an average of around 13.7 million b/d. In 2011, U.S. oil imports averaged around 11.36 million b/d. The decline was due in part to a sluggish economic recovery and increasing domestic supply. Imports from OPEC countries are down around 19 percent over the same period (2005 to 2011), and total imports from Canada have increased by 24 percent.
The Energy Information Agency (EIA) predicts that U.S. oil consumption will grow very slowly over the next 25 years, because of policies that that boost the fuel efficiency of cars and increase the use of renewable fuels like ethanol.
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Oil sands are a mix of naturally occurring bitumen, sticky oil and abrasive sand; each sand grain is coated by a layer of water and a layer of heavy oil.  According to the Alberta Energy and Utilities Board, (2007) oil sands deposits total 173 billion barrels of proven reserves. About 26 billion barrels are under active development. Technologies for oil sands production are steadily improving, decreasing greenhouse gas intensity and cost of extraction while increasing the volume of recoverable reserves.
Table 1. Top 20 Countries’ Crude Oil Reserves (Billion Barrels)
United Arab Emirates*
Source: U.S. Energy Information Administration, International Energy Statistics
Currently, about half of the oil sands production is from surfacing mining, and half is extracted in place, or in-situ. Ultimately, about 80 percent of the proven oil sands reserves are expected to be produced in-situ. Surface-mined oil sands production is similar to traditional mineral mining; shovel-excavated sands are transported to processing facilities by very large trucks. Crushed sand fragments are added to swirling water (continuously recycled), and the slurry is agitated and piped to an extraction facility, where the oil can be skimmed from the top of the flow.
Figure 3. Surface Mining and In-Situ Production
Source:Nexen Incorporated 2012. http://www.nexeninc.com/en/Operations/OilSands/Process.aspx
Surface mining is used for shallower reservoirs – those less than 75 meters below the surface; however, 80 percent of the oil sand reserves are deeper and not economically recoverable with surface mining; they require in-situ extraction. There are two main in-situ extraction techniques referred to as steam assisted gravity drainage (SAGD) and cyclic steam stimulation, in which steam, solvents and/or hot air is injected directly into the oil sands in order to get the material to flow into collection pipes. For both processes, extracted bitumen is then upgraded into a lighter (lower viscosity) and sweeter (lower sulfur content) crude oil and later refined into gasoline or diesel fuels.
The Great Canadian Oil Sands (GCOS) project began operations in 1967, with rapid growth occurring over the 1990 – 2006 period. Oil sands production is projected to grow from 1.5 million b/d in 2010 to 3.7 million b/d in 2021. Overall, total Canadian oil production is expected to grow from 2.8 million b/d in 2010 to 4.7 million b/d in 2025.
Source: Canadian Association of Petroleum Producers (2011)
The U.S. Midwest is currently the primary export market for western Canadian crude oil supplies due to its geographic proximity and established pipeline infrastructure. Growing supplies of crude oil from western Canada could find a market on the U.S. Gulf Coast or world markets once they reach Canada’s West Coast, including California and Asia.
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What are the greenhouse gas implications of developing the oil sands? The draft SEIS issued by the State Department in March 2013 concluded that the Albertan oil sands will continue to be developed whether or not the Keystone pipeline is built and, therefore, that allowing the pipeline would not lead to a net increase in global greenhouse gas emissions. However, the International Energy Agency in its World Energy Outlook 2013 concluded that current expansion plans for the oil sands are contingent on the development of major new pipelines.
The production of oil sands crude is more energy-intensive, and therefore more greenhouse gas-intensive, than most conventional crudes. Due to the nature of the deposit, additional processes are required to extract the oil, remove the sand and get the oil to flow in a pipeline. Each of these processes, including the use of power shovels and trucks, operation of intermediate facilities, and so forth, requires energy. In addition, in-situ production (because it requires steam generation) is more energy-intensive than surface mining.
Several analyses of the well-to-wheels life-cycle emissions of transportation fuels produced from various crudes (emissions from both the production and the combustion of the oil) conclude that Canadian oil sands are among the most carbon-intensive. The State Department’s draft SEIS found that oil from the Canadian oil sands is 17 percent more carbon-intensive than the average oil consumed in the United States. (A report from the Congressional Research Service put the figure at 14 percent to 20 percent.) It is estimated that the U.S. greenhouse gas footprint would increase by 3 million to 21 million metric tons per year, or around 0.04 percent to 0.3 percent of the 2010 levels, if Keystone is built.
This relatively small increase in projected U.S. emissions reflects the fact that the majority of greenhouse gas emissions associated with oil result from its combustion in vehicles. Well-to-pump emissions, also known as non-combustion emissions, account for 20 to 30 percent of total life-cycle emissions, while fuel combustion accounts for 70 to 80 percent of total life-cycle emissions (Figure 5). Combustion emissions do not vary with the origin of the crude oil. Although oil sands-derived crudes are more energy-intensive than the average oil consumed in the United States, there are several types of crudes that are also higher than the U.S. average. Other carbon-intensive crude oils are produced, imported, or refined in the United States, including Venezuelan heavy, California heavy, and Nigerian.
Figure 5. Life-Cycle Greenhouse Gas Emissions
Source: IHS CERA, “Oil Sands, Greenhouse Gases, and U.S. Oil Supply.” (2010)
While the emissions intensity of oil sands are higher than the U.S. average, steps are being taken to mitigate their greenhouse gas intensity. According to the U.S. State Department, oil sands mining projects have reduced greenhouse gas emissions intensity by an average of 29 percent between 1990 and 2008. Additionally, carbon dioxide emissions from oil sands production can be lowered through technological processes such as VAPEX. VAPEX captures carbon emissions from power plants and industrial sources as an injectant for in-situ production while simultaneously sequestering carbon. In 2008, the Alberta government announced a $2 billion fund to support a combination of sequestration projects in power plants and oil sands extraction and upgrading facilities. Two large projects have received funding: Alberta Carbon Trunk Line and Shell Quest. These projects are expected to reduce Alberta’s greenhouse gas emissions by 2.8 million tonnes annually (15.8 million tonnes at full capacity) beginning in 2015.
In the future, the difference in carbon intensity between the Canadian oil sands and other crudes is expected to narrow. Emissions from surface-mining oil sands are expected to remain relatively stable over time, while advances in in-situ production are expected to lower its emissions. At the same time, tertiary recovery of other crudes is expected to become more energy-intensive.
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What other environmental concerns does Keystone XL raise? Additional environmental concerns arise from the siting of the pipeline in the United States and at the source of the oil sands production in Canada.
The proposed path of the northern branch of the Keystone XL would cross the Ogallala Aquifer. This aquifer is a significant source of drinking and irrigation water from South Dakota to Texas. Some groups are concerned that a potential oil spill could result in the fouling of this water source.
In Canada, there are a host of environmental issues, ranging from land disturbance, leveling of the Boreal forest, air pollution, water usage and fouling, interference with migratory animals, and the altering of ecosystems.
Figure 6. Surface Mine and a Tailings (Waste Water) Pond in Fort McMurray, Alberta
Source:Center for Climate and Energy Solutions 2009. http://www.c2es.org/blog/shipleyj/midwest-leading-edge-oil-sands
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What are the long-term solutions? Solutions are available to address issues associated with oil demand, oil sands production, and Keystone XL pipeline construction. Operators have a responsibility to ensure the highest levels of pipeline safety. Ongoing investments and improvements in maintenance and monitoring are imperative, and systems should be in place to minimize accidents over the life of these long-term assets.
Additional steps should be taken to reduce the greenhouse gas emissions that are the direct result of Canadian oil sands production. Techniques like VAPEX and carbon capture and storage, as well as advancements in reducing the energy intensity of in-situ mining, should be promoted and encouraged.
In the long term, the most effective way to reduce the greenhouse gas emissions associated with the oil sands is to dramatically reduce our oil consumption. This can be achieved through technological advances, including development of alternative transportation technologies like plug-in electric vehicles (PEVs) and crude oil substitutions like lower-emitting biofuels for transportation and industry consumers. Crude oil demand can be further reduced through policy initiatives, including increased fuel efficiency Corporate Average Fuel Economy standards, renewable fuel standards, and internalizing the external cost by adding a carbon price to crude oil, such as a carbon tax. The current fuel economy standard for a manufacturer’s light duty fleet is 27.3 mpg. This will increase to approximately 50 mpg by 2025. Our 2011 report titled Reducing Greenhouse Emissions from U.S. Transportation identifies cost-effective solutions that will significantly reduce transportation's impact on our climate.
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 The Seaway pipeline is a 50/50 joint venture between Enterprise Products Partners, the operator, and Enbridge. It runs from Cushing, OK to Freeport, TX, just to the south of Houston. It was initially intended to deliver crude from south to north, but work to complete its reversal was completed in May 2012. Its initial capacity is 150,000 b/d, and this is expected to reach 400,000 b/d by early 2013. This is expected to relieve the glut of oil in Cushing.
 Energy Resources Conservation Board, “Oil Sands.” http://www.ercb.ca/portal/server.pt?open=512&objID=249&PageID=0&cached=t...
 Energy Resources Conservation Board ST98–2011 Alberta's Energy Reserves 2010 and Supply/Demand Outlook 2011–2020 (ERCB, 2011).
With the latest round of international climate change talks underway in Doha this week, it’s a good time to check in on the United States’ pledge, made three years in Copenhagen, to reduce greenhouse gas emissions 17 percent below 2005 levels by 2020. Are we on track to meet that?
The short answer: Not yet. But projections depend on assumptions, so let’s look at a few recent projections.
I recently got the chance to tag along with a group of journalism fellows on a tour of some oil sands production sites in Alberta, which is home to almost all of Canada’s oil sands reserves.
The Canadian oil sands are one of the biggest energy stories of our time. The good news is that this is a huge North American resource. Because of the oil sands, Canada now has the third largest oil reserves in the world, estimated at 175 billion barrels. The bad news is that extracting this oil can seriously harm the environment. Because of these environmental risks, many oppose the Keystone pipeline, proposed to expand the already significant imports of this oil from Alberta to the United States.
Among Tuesday's election returns, voters in two states issued a split decision on ballot measures to boost clean energy. California approved a plan to fund clean energy jobs, but voters in Michigan defeated a plan to put a stronger clean energy standard for the state’s utilities into the state constitution.