Report: U.S. Poised To Shift Most New Refining Capacity To Dirtier Tar Sands Oil Emitting Three Times More Global Warming Emissions In Extraction



    Traditional Crude Oil Seen Making Way for Dirtier Crude From Canadian Tar
    Sands; Proposed Tar Sands Production Increase Would Be the Equivalent of
    16 New Refineries in the U.S.

    WASHINGTON and TORONTO, June 4 /CNW/ - Future oil refining in the U.S.
may soon get much "dirtier" -- including three times more greenhouse gas
emissions in the extraction process -- as refineries place their bets on a
shift away from traditional crude oil to Canadian tar sands, according to a
major new report issued today by the independent Environmental Integrity
Project (EIP). The Washington, D.C. EIP released its new report today in
conjunction with Toronto-headquartered Environmental Defence Canada (EDC).

    
    Titled "Tar Sands: Feeding U.S. Refinery Expansions With Dirty Fuel," the
report notes:

    -   Two thirds -- 1.1 million barrels per day (bpd) - of the currently
        proposed increase in U.S. refining capacity of 1.6 million bpd would
        come from refining heavier, dirtier crude oil from Canadian tar
        sands.

    -   At the same time, more than 800,000 bpd of existing U.S. conventional
        crude capacity is proposed to be converted to processing oil from tar
        sands, so that conventional crude refining capacity is expected to
        undergo a net decrease of over 300,000 bpd, and the total net
        increase in refining capacity to come from tar sands would be over
        1.9 million bpd.

    -   Since the average capacity of an oil refinery in the United States is
        116,395 bpd, the contemplated 1.9 million bpd of increased tar sand
        capacity would be equivalent to constructing more than sixteen new
        refineries dedicated to tar sands. Increased tar sand refining
        capacity is contemplated in Illinois and Texas (495,000 bpd
        together); Indiana (205,000 bpd); Louisiana (180,000 bpd); Michigan
        (15,000 bpd); Montana (13,000 bpd); North Dakota (65,000 bpd); Ohio
        (316,120 bpd); Oklahoma (44,700 bpd); South Dakota (400,000 bpd); and
        Wisconsin (200,000 bpd).
    

    Eric Schaeffer, director, Environmental Integrity Project, said: "It is
hard to imagine what else it is that the U.S. oil industry could do to go
backwards further and faster than to rely on Canadian tar sands or similar
resources in the United States. Not only would this mean significantly more
pollution overall, but it would substantially boost the greenhouse gas
emissions linked to global warming. The U.S. government needs to get more
involved in this situation to ensure that we do not end up with an
environmental setback of truly staggering proportions."
    Matt Price, project manager for Alberta/BC Energy and Climate and
contributor to the new report, Environmental Defence Canada, said: "The tar
sands project is the most destructive project on Earth. Nowhere else are we
talking about ripping up an area the size of Florida, creating massive toxic
lakes you can see from space with the naked eye, and giving off three times
the greenhouse gas emissions to produce oil when compared with conventional
crude."
    Although a new oil refinery has not been built in the U.S. for over
30 years, five new refineries are currently under consideration, three of
which would process tar sand oil (two in North Dakota and one in South
Dakota), and one of which would process oil from U.S. oil shale deposits
(North Dakota), which may be as destructive to mine and as dirty to refine as
tar sand oil.

    
    OTHER KEY EIP REPORT FINDINGS
    -----------------------------
    The EIP report also notes:
    -   Although oil shale is more expensive to mine and process than tar
        sands, with the price of oil currently well over $100 per barrel,
        exploitation of shale deposits in Colorado, Utah, Wyoming, North
        Dakota, and Montana may also now be profitable. The development of
        shale, like tar sands, entails strip mining huge areas of land and
        using vast amounts of water and energy.

    -   Refining the extra heavy sour crude oil extracted from tar sands
        would result in higher air emissions of harmful pollutants such as
        sulfur dioxide (SO2), hydrogen sulfide (H2S), sulfuric acid mist, and
        nitrogen oxides (NOX), as well as toxic metals such as lead and
        nickel compounds.

    -   The consequences of tar sand oil extraction include the clear-cutting
        and strip-mining of huge portions of intact boreal forest ecosystem,
        the creation of vast un-reclaimable toxic lakes of wastewater, the
        consumption of enormous amounts of water and energy, and the
        production of three times more greenhouse gas as extracting
        conventional crude oil.
    

    Commenting on the findings, Ben Wakefield, senior attorney and principal
report author, Environmental Integrity Project, said: "The U.S. oil refining
industry is contemplating an enormous investment and deep commitment to
perpetuating U.S. and global reliance on oil as our primary source of energy
into the next generation and beyond, and tying that reliance to even dirtier
and more destructive sources of oil than at present. At a time when the world
searches for alternatives to fossil fuels that will avoid the catastrophic
consequences of global warming, the oil companies are building the
infrastructure to not only extend our addiction to oil, but to actually make
global climate change much worse. If we allow the destruction wrought by tar
sands exploitation, we can expect the oil companies to next turn their gaze
upon U.S. oil shale."

    
    EIP REPORT RECOMMENDATIONS
    --------------------------
    The EIP report outlines several major steps that should be taken:

    -   The U.S. government can and should act to address the environmental
        consequences of tar sand and oil shale development.

    -   The United States must reduce its consumption of oil by improving
        energy efficiency standards applicable to automobile manufacturers
        and implementing lifecycle carbon content fuel initiatives.

    -   The U.S. EPA should regulate greenhouse gas emissions from oil
        refineries pursuant to the "New Source Performance Standards"
        ("NSPS") applicable to newly modified or constructed oil refineries.

    -   The U.S. EPA should limit greenhouse gas emissions and consider
        alternatives to tar sand oil feedstock in its "best available control
        technology" ("BACT") and "lowest achievable emission rate" ("LAER")
        determinations under the "new source review" ("NSR") provisions of
        the Clean Air Act when issuing construction permits for refinery
        expansions or new refineries.

    -   The U.S. EPA should account for the increased air emissions of SO2,
        H2S, sulfuric acid mist, NOX, and toxic metals such as nickel and
        lead produced as a result of processing tar sand feedstock when
        issuing construction permits under NSR.

    -   When permitting the pipelines to carry tar sand crude to U.S.
        refineries, the responsible U.S. environmental and public lands
        agencies should consider the cumulative effects on air quality and
        global warming of all U.S. refineries which process tar sand oil, as
        well as the global warming impacts of extraction of tar sand crude in
        Canada on the United States.

    -   The United States and Canada must work together to protect human
        health and the environment when regulating the extraction,
        transportation, and refinement of oil from tar sands and oil shale.
    

    ABOUT THE GROUPS
    ----------------
    The Environmental Integrity Project
(http://www.environmentalintegrity.org) is a nonpartisan, nonprofit
organization established in March of 2002 by former EPA enforcement attorneys
to advocate for effective enforcement of environmental laws. EIP has three
goals: 1) to provide objective analyses of how the failure to enforce or
implement environmental laws increases pollution and affects public health;
2) to hold federal and state agencies, as well as individual corporations,
accountable for failing to enforce or comply with environmental laws; and
3) to help local communities obtain the protection of environmental laws.

    Environmental Defence Canada (http://www.environmentaldefence.ca)
protects the environment and human health. We research solutions. We educate.
We go to court when we have to. All in order to ensure clean air, clean water
and thriving ecosystems nationwide, and to bring a halt to Canada's
contribution to climate change.

    EDITOR'S NOTE: A streaming audio recording of the June 4, 2008 event will
be available on the Web on a same-day basis as of 7 p.m. EDT at
http://www.environmentalintegrity.org.





For further information:

For further information: Patrick Mitchell, for Environmental Integrity
Project, (703) 276-3266 or pmitchell@hastingsgroup.com; Jennifer Foulds, for
Environmental Defence Canada, (416) 323-9521 ext. 232 or (647) 280-9521
(cell)


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