The misconception with 'west-to-east' pipeline proposals like Enbridge’s Line 9 or TransCanada’s Energy East is shipping western Canadian oil to eastern Canada means ‘Canadian oil for Canadian refineries.’ This assumption overlooks the fact eastern Canadian refineries cannot refine a certain type of Canadian oil – tar sands bitumen.

Bitumen is the heavy unconventional oil found in the Alberta tar sands (also called oil sands). Only a specialized refinery can process bitumen and turn it into refined products such as fuels. Few refineries in Canada can do it. None of the refineries in eastern Canada can refine large quantities of bitumen.

TransCanada and Enbridge claim their west-to-east pipelines will transport mainly conventional oil and only small amounts of bitumen. This is unlikely to be true in the long term as conventional sources of oil dry up in Canada and bitumen production continues to increase.

If no eastern Canadian refinery makes the massive investment to outfit their operation to refine bitumen, Line 9 and Energy East are destined to ensure more bitumen will flow to markets overseas, not Canadian refineries.

“Building more tar sands pipelines will lock Canada into a highly polluting carbon-based economy for decades,” says Adam Scott, a climate and energy program coordinator for Environmental Defence Canada based in Toronto.

“We cannot support any pipeline that furthers the ongoing reckless and unchecked expansion of the tar sands,” Scott told DeSmog Canada.

TransCanada's proposed Energy East pipeline route

Refineries Require an Expensive Coker Unit to Refine Bitumen

Bitumen is not the black liquid that many people think of when they think of oil. It is low-grade oil with the consistency of peanut butter and riddled with impurities.

Bitumen is high in carbon and low in hydrogen. High quality oils such as light sweet conventional crude oil are just the opposite. Much of the carbon in bitumen needs to be stripped in order to convert bitumen into refined products that can be sold.

Like what you're reading? Sign up for our email newsletter!

Refineries usually require a coker unit to remove the carbon from bitumen. To remove the carbon, bitumen is heated in large steel coke drums at higher temperatures (480 degree Celsius) and for longer periods of time than typical conventional oil refinery is capable of. Hydrogen is added afterwards to make bitumen more like a liquid-fuel.

Suncor’s Montreal Refinery May Refine Bitumen if Line 9 is Approved

A few refineries in Alberta and one in Ontario have coker units. A massive investment $2 billion is required to install a coker. None of the three eastern Canadian refineries – Suncor, Valero, and Irving – have publicly announced their intentions to make this investment.

“Suncor is the most likely to install a coker because the company has tar sands projects in Alberta. Irving and Valero do not,” says Lorne Stockman, research director at Oil Change International (OCI) in the US.

“There is plenty of lighter, easier to refine oil coming out of new sources such as Bakken oil shale in the US. Irving and Valero will probably to stick to processing lighter oils for the time being,” Stockman told DeSmog Canada.

Neither Valero nor Irving appears interested in buying a coker at the moment. Irving, which has equipment to process small amounts bitumen, is investing in a $300 million marine terminal in Saint John, New Brunswick to export oil from the proposed Energy East pipeline. Valero announced earlier this year oil from Texas will be sent to its Quebec City refinery.

“Suncor may make more of a profit supplying its Montreal refinery with bitumen than by selling bitumen to its competitors,” says Stockman. 

There is speculation Suncor will announce its plans to construct a coker unit at its Montreal refinery after the National Energy Board (NEB) – Canada’s independent energy regulator – makes its decision on Line 9. The NEB decision on Line 9 could come as early as January 2014.

The US Has the Most Capacity to Refine Bitumen in the World

The probable destination of Energy East's or Line 9's bitumen is a refinery somewhere in the US, although some bitumen refining capacity does exist in Europe as well as China.

In the US, 59 of the 134 refineries are equipped with coker units. Approximately 30% of the US's bitumen refining capacity is in the nine Gulf of Mexico refineries TransCanada seeks to supply through its controversial Keystone XL pipeline. Sea-faring oil tankers traveling from Saint John, Quebec City or Montreal could also access these refineries.

Pet coke: the Coal Hidden in the Tar Sands

A major problem with refining bitumen is it has a rather nasty byproduct called petroleum coke or ‘pet coke’. Pet coke contains most of the heavy metals, sulphur and other impurities removed from bitumen during the coking process. Approximately 15% of a barrel of bitumen will become pet coke.

The research and clean energy advocacy group Oil Change International describes pet coke as “the coal hiding in the tar sands” because it has emerged as an inexpensive alternative to coal since the bitumen boom in Alberta began ten years ago.

“Pet coke is providing coal-fired power plants with a cheaper and dirtier source of fuel. It is breathing new life into the industry, which is cause for concern as the world desperately tries to reduce its carbon emissions output,” says Stockman of OCI.

The majority of pet coke produced in North America is sold to Asia and Latin America where regulations on sulphur releases from coal-fire power plants are lax. Pet coke produces 5-10% more greenhouse gas (GHG) emissions than coal per unit of energy.

In Canada, pet coke is largely being stockpiled in Alberta. There are some exports of Canadian pet coke to Asia via ports near Prince Rupert, British Columbia.

Last August, the mayor of Detroit ordered the removal of pet coke piles sitting uncovered along the Detroit River. The piles were three-storeys tall. Dust particles containing the toxic heavy metals in pet coke were blowing off the piles and into the air and river.

The pet coke piles were from Marathon's refinery in Detroit. The refinery began refining bitumen in November 2012.

Oxbow Corporation is one of the largest sellers of pet coke in the world. The company is owned by William Koch, brother of the infamous pro-fossil fuels billionaires Charles and David Koch.

Image Credit: Northern Rockies Rising Tide, TransCanada, Enbridge, Oil Change International.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

This is a guest post by Caroline Selle

Much of the debate around the Keystone XL pipeline has focused on the dangers of extracting and transporting the tar sands. Left out, however, are those in the United States who are guaranteed to feel the impacts of increased tar sands usage. Spill or no spill, anyone living near a tar sands refinery will bear the burden of the refining process.

Tar sands oil is produced from a mixture of sand, clay, water, and the sticky, peanut-butter like form of petroleum known as bitumen. Unlike conventional crude, it’s essentially solid at room temperature, has a higher heavy metal content, and has to be diluted for transport. The diluents are trade secrets, and the content mixture – which often contains benzene, a human carcinogen – isn’t something companies are required to report.

DeSmogBlog has covered the impacts of tar sands extraction on indigenous communities, and the dangers of moving tar sands through a network of pipelines is aptly covered here. And while major nonprofits have completed studies on the dangers of transporting tar sands, there is significantly less information available on how refining tar sands differs from processing conventional crude.

Additional heavy metals and benzene might sound like a recipe for disaster anywhere, but the location of several major tar sands refineries is already overburdened with pollutants. In Harris County, Texas – home to the city of Houston – people are already surrounded by refineries and factories spewing toxic pollution into the air. And as the southern leg of the Keystone XL project slowly fills in its missing pieces, the spectre of toxic bitumen looms.

Harris County, Texas, is home to the Lyondell Houston Refinery. The Lyondell facility is expanding its ability to refine tar sands bitumen, attempting to more than double its capacity to process Canadian crude. Never mind that the refinery already has numerous Clean Air and Clean Water Act violations. If the facility expands as planned, its capacity will increase from 60,000 to 175,000 barrels a day.

The air quality in Harris County is already dangerous without the added burden of tar sands pollution. Although levels of many chemicals have decreased in recent years, residents are reaping the rewards of living so close to massive amounts of cancer-causing pollution. A 2006 study by the Texas government found increased rates of certain cancers in the Harris County population.

Children living in the areas with the highest level of 1,3 butadiene had a 153% higher chance of developing acute myeloid leukemia than those living in areas with the lowest concentrations of the same chemical. A 2003 study found a positive correlation between ozone density and asthma in Harris County residents, and the cancer risk of Houston residents living in the most contaminated areas is increased by a factor of 1000.

Though the Lyondell website advertises winning “13 national safety awards in the past five years,” the Lyondell Chemical Co. has the second highest rate of disposing of toxics of any industrial facility in Harris County. The more you learn, the worse it gets. In 2011, Harris County accounts for 14.74 percent of total Toxic Release Inventory (TRI) measured chemical releases and transfers in Texas. Texas already ranks 3rd highest (worst) in terms of pounds of toxics released and or transferred  – out of 56 states and territories.

Lyondell Chemical Co. owns Houston Refining, a facility in Manchester, Texas which has been the subject of four formal EPA enforcement acts in the last five years. The company was fined $549,055 for violating the Clean Air Act, and yet, as of April, 2013, the facility has had 12 consecutive quarters of non-compliance. The area around Houston refining is 80% minority, with about one out of every four people below the federal poverty line.

Despite these grim statistics, the refinery was granted a pollution permit from the Texas Council on Environmental Quality without the requested public hearing in 2010. Residents were concerned about benzene exposure, which is likely to increase with greater refining of the tar sands. Already, the neighborhood has seen struggles over controlling the amount of benzene in the air.

A 2011 report by the Texas Center for Environmental Quality revealed decreasing levels of toxics in the air, but some residents claim that the data is based off of faulty and broken air quality monitors. Still, the decreasing levels are likely unsafe: Texas has some of the highest ‘safe’ benchmarks for carcinogens in the country. Additionally, the cumulative effect of lifetime exposure to a “toxic soup” of “safe” levels of chemicals is unknown.

With toxic chemical exposure nearly certain, it is unclear what the next step will be for residents of Harris County. It’s clear the area isn’t facing the impacts of the Keystone XL on the same timeline as the rest of the nation. President Obama already approved the lower leg of the pipeline, and the connection from Cushing, OK to Port Arthur, TX is almost complete.

Once built, the Cushing hub will connect to other pipelines and transportation systems moving tar sands from Alberta. For many residents of Harris County, this is a life or death struggle more immediate than the “what-if” of a pipeline spill. And it’s not a “what-if.” For Harris County, the fight is “right now.”

Image credit: Oil Refinery on Shutterstock

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Thanks to Alberta's tar sands, coal-powered energy production just got cheaper, and dirtier.

That is largely due to an often overlooked byproduct of bitumen upgrading: petroleum coke. The byproduct, commonly referred to as petcoke, is derived from the excess heavy hydrocarbons necessarily processed out of bitumen in the production of lighter liquid fuels like gasoline and diesel. The leftover condensed byproduct, petcoke, bears a striking resemblance to coal, and is being integrated into coal power plants across the US and internationally, contributing a tremendous amount of carbon emissions to the tar sands price tag that has been previously unaccounted for.

That is, until the research group Oil Change International released a research report that calculates the use of petcoke in American energy generation increases the proposed Keystone XL Pipeline's emissions by a staggering 13 percent. 

The report, Petroleum Coke: The Coal Hiding in the Tar Sands, suggests that while groups like the European Commission use specific inputs to determine a 'well-to-wheels' analysis of tar sands emissions – which figures the unconventional fuel emits emissions 23 percent greater than conventional crude – such calculations do not account for petcoke and so only tell a portion of the story.

"Petcoke," states the Oil Change website, "has even higher carbon emissions than already carbon-intensive coal, emitting between 5 to 10 percent more CO2 than coal per unit of energy produced. A ton of petcoke yields on average 53.6 percent more CO2 than a ton of coal."

What is worse, as a byproduct petcoke is sold at a "to move" price, pushing the dirty fuel source into the market at a 25 percent discount to coal. Because petcoke undercuts the price of coal so significantly, the coal industry has begun to incorporate petcoke into its power generation.

"At the end of 2011 nearly 80 million tons (72.3 million metric tons of petcoke was stockpiled in Alberta. The stockpile is growing at the rate of about 4 million tons (4.4 million metric tons) a year." Image located on page 20 of the report.

"Indeed industry analysts have shown that a typical 1 gigawatt coal plant can save around $120 million per year in fuel costs by blending petcoke with coal in their boilers. That sounds to us like a boon for coal-fired generators and a bad deal for cleaner fuels competing with coal in a tight market."

The Petcoke Craze

The report's introductory blog post by Lorne Stockman highlights some significant statistics on the relationship between tar sands production and petcoke. 

• There is 24 percent more CO2 embedded in a barrel of tar sands bitumen than in a barrel of light oil.

• 15 to 30 percent of a barrel of tar sands bitumen can end up as petcoke depending on the upgrading and refining process used.

• Of 134 operating U.S. refineries in 2012, 59 are equipped to produce petcoke.

• U.S. refineries produced over 61.5 million tons of petcoke in 2011 – enough to fuel 50 average U.S. coal plants each year.

• In 2011, over 60 percent of U.S petcoke production was exported.

"Petcoke in the tar sands is turning American refineries into coal factories."

"Keystone XL refineries are among the biggest petcoke factories in the world," is the caption to this image, figure 3, found on page 17 of the report.

The Keystone XL refineries have a petcoke production capacity of 50,375 tons per day. 

Because of this, the "Keystone XL will fuel five coal plants and thus emit 13 percent more CO2 that the U.S. State Departmet has previously considered." The five coal plants would produce "16.6 million metric tons of CO2 each year."

 The "PetKoch" Connection

Oxbow Corporation, owned by lesser-known Koch brother William Koch (sibling of oil and gas magnates Charles and David Koch), is the largest petcoke trader in the world. The corporation is one of the largest donors to Republican Super PACs, with political contributions tallying at $4.25 million. 

The company also spent $1.3 million on lobbyists in 2012 alone.

Oxbow ships "11 million tons of petcoke annually around the world primarily from the Gulf Coast to Asian, Latin American and European markets."

The report states that "Oxbow's biggest facility and primary laboratory and testing facility are located in Port Arthur, Texas, where the Keystone XL pipeline would terminate and where some of the biggest petcoke producing refineries in the world are located."

Industry's Downplay

Last week, TransCanada, the company currently building the southern leg of the Keystone XL pipeline, announced the pipeline's construction was proceeding smoothly and without delay. This despite a prominent and ongoing protest along the route, with future sit-ins scheduled for Washington DC. 

"We factor things like that into our planning," Shawn Howard, a spokesman for the company told Reuters. "We've got a pipeline route that's hundreds of miles long so if there are activities that take place on one property, our crews still have plenty of work to do."

According to The Washington Post, the oil industry was quick to dismiss the findings of Oil Change International's report. 

TransCanada said the report contained "nothing new" and was merely "the latest attempt by professional activists who opposed Keystone XL to change the discussion." 

A statement issued by the company read, “Let’s be frank: this is not about the Keystone XL Pipeline, diluted bitumen, emissions or a substance that is in a particular blend of oil. It’s about a group that wants to end the use of fossil fuels entirely.”

Jack Gerard, president of the American Petroleum Institute, one of the most power oil and gas lobby groups in the U.S., had this to say: “It once again boils down to a political decision by the White House: will they follow what’s in the best interest of the country, or will they follow other political pressures?”

“It clearly is in the national interest, and that’s the only decision the president needs to make,” Gerard told The Washington Post, adding he saw carbon emissions as one of the “tangential issues to the conversation.”

The Keystone Conundrum

The Keystone XL pipeline will introduce a consistent stream of tar sands bitumen into the United States. The bitumen boom is creating a petcoke boom that is "an insidious aspect of tar sands production that is, until now, undocumented."

The report adds, "to date, petcoke has been hidden in most discussions about the Greenhouse Gas (GHG) intensity of the tar sands." That, crucially, includes discussions surrounding the Keystone XL.

If the pipeline is approved, "around 15,000 tons of petcoke per day will be produced from the bitumen in the dilbit it will deliver…That is over 50,000 tons of CO2 every day or over 18.3 million tons (16.6 metric tons) of CO2 a year."

The reality of the rise of petcoke means that the tar sands are significantly worse for the environment than previously thought. And the growing dependence on petcoke-generated energy will only increase that carbon-burden for the forseeable future.

At the very least, these are not numbers we can afford to ignore any longer.

"With more than 300 billion barrels of recoverable tar sands bitumen still in the ground in Alberta and hundreds of billions of barrels of extra-heavy and heavy oils in reserves around the world, it is time we understood the full impact of exploiting these low quality, high impact hydrocarbons."

The report traces the rise of petcoke energy and emissions through investments that have "transformed North America into the petcoke production center of the world." Pg 18.

The Consumption Quandary

Petcoke use, in comparison to coal-generated energy production, is small at this stage, although the overall effect of discounted petcoke in the energy market is unknown at this point. 

A number of negative consequences of increased petcoke consumption are likely, however, such as the lengthened life-span of coal-fired power power plants enabled by a steady stream of cheap petcoke. This in turn will assist in the continued suppression of large-scale investments in cleaner sources of energy in the U.S. and internationally. 

While an in-depth consequential life-cycle analysis of tar sands production may enable us to make more precise estimations of the greenhouse gas impact of opening up this vast resource, it seems clear the impact is subject to the basic laws of economics. More supply lowers prices, increases demand and competes with cleaner alternatives that are fighting to achieve the economics of scale. 

 

in addition, we must not forget that even if petcoke did replace coal consumption one-to-one and did not represent an increase in coal demand, which seems unlikely, its emissions are five to ten percent higher on a unit of energy basis. Petcoke is making coal-fired power generation more carbon intensive and cheaper at exactly the time that we urgently need low carbon solutions to energy production. 

The report concludes:

considering tar sands emissions in their entirety must surely lead to the conclusion that we cannot possibly exploit all the recoverable tar sands bitumen. this in turn should highlight the urgent need for society to grapple with one of the most crucial and challenging questions of our time: Which fossil fuels should we leave in the ground and how do we manage the process? 

Be sure to take a look through the entire report, which is thorough, informative and full of interesting visuals, graphs and images that bring this formerly obscure subject to light.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.