Oil industry-backed study highlights concerns Sacramento agrees to address to ensure foreign crude doesn’t gain an unfair advantage in the market over in-state production due to gaps in data from California’s fuel “carbon intensity” rating system.
Last month’s report from the nonprofit Institute for Energy Research highlighted what it called serious flaws in Stanford University’s oil production greenhouse gas emissions estimator. , or OPGEE, which the California Air Resources Board uses to determine combustion costs attributed to refineries.
CARB challenged some of the report’s findings via email, but conceded that the OPGEE system would be more accurate if it took into account more data from foreign and domestic oil producers. He noted that the agency was already considering crediting domestic producers for reducing methane emissions, which was one of the report’s recommendations.
Where the two sides may continue to disagree is over whether the state is correctly estimating the emissions volumes associated with imported oil. OPGEE uses a default value that the IER study finds unrealistic, but which CARB has defended as contributing to a “conservatively high” climate intensity score for foreign oil.
The Kern-centric state oil industry has long accused the Newsom administration of hobbling California producers by tightening control and banning certain technologies while refusing to recognize environmental and labor conditions in Ecuador and Saudi Arabia, California’s two main foreign sources. With the IER study released July 18, the industry sees what it sees as further evidence of an uneven playing field amid the state’s gradual transition to a cleaner energy future.
California Independent Petroleum Association trade group CEO Rock Zierman called for OPGEE to be fixed not only because the system is used to set state targets, but also because its rankings are cited by industry critics.
“These groups are actively asking the state to replace domestic production (70% at Kern) with imported foreign crude and justifying it with the misconception that imports are ‘cleaner,'” Zierman said via email.
Stanford, which designed and maintains OPGEE, did not respond to requests for comment.
A group of environmental advocacy and environmental justice groups active in shaping petroleum regulatory policy declined to comment on the IER study.
For its part, CARB has opened the door to limited adjustments to the system, including new credits for state producers. He said the agency “is open to operators submitting more specific field data to potentially supplement the inputs used in OPGEE.”
The IER, championed by industry for its research on national energy policies, noted in a study published July 18 that OPGEE is supposed to estimate the emissions created during the production, processing and transportation of fuel from transportation. The system determines which deficits and credits under California’s low-carbon fuel standard cost refiners more or less money depending on where the fuel they process comes from.
The study lists several ways that OPGEE overestimates the carbon intensity of oil produced in California and underestimates that of foreign oil.
He alleges that the system ignores real, verified data that CARB has already collected on oil produced in the state, and that the state’s use of the system underrepresents emissions from Ecuador and India. Saudi Arabia.
OPGEE also ignores the impact of California mandates on greenhouse gas reductions and the fact that foreign producers are not participating in the state’s cap-and-trade program on air pollution, said the exam, developed by Catalyst Environmental Solutions Corp., a Santa Monica consulting firm. specializing in areas such as the energy sector, and Yorke Engineering, a San Juan Capistrano-based company specializing in environmental permits and compliance.
“Each of these factors individually disadvantages in-state production in favor of imports. Combined, these errors create a very skewed picture of California’s IC production,” the report said. “This means compliance with the LCFS is easier if imported crude oil is used in preference to domestic production in the state.”
He said the simple application of data on greenhouse gas reduction success stories would show substantial and ongoing reductions in the carbon intensity of oil produced in California.
“If the goal is GHG reduction,” he said, “then correcting the OPGEE model should be an immediate priority.”
CARB’s email comments on the IER review began with the general observation that California crude tends to be heavier than major foreign sources refined in the state. In many cases, steam is needed to produce oil in the state, which in turn increases its OPGEE carbon intensity score.
Regarding accusations that CARB is ignoring its own verified oil intensity data, the agency said the information it has is not designed to support the full life cycle analysis required by the OPGEE. For example, he said his data does not address changes in land use, transportation, or the upstream production of process fuels like natural gas.
He invited California oilfield operators to provide detailed, field-specific data on production methods that could be considered by OPGEE.
CARB has denied IER’s allegation that it underestimates the pollution emitted by tankers carrying foreign oil to US ports. He said the study erred in reporting that OPGEE calculates transportation emissions using a default value of 5,082 miles and only considers one-way trips. In fact, the CARB email says it incorporates the 13,076 miles to Saudi Arabia plus the total return distance.
On the issue of allegedly inaccurate estimates of emissions from foreign oil production, CARB noted that OPGEE assigns default parameters when it does not have oilfield-specific data, which is often the case with crude supplied abroad. He defended these defaults as being based on the best information available, although he acknowledged that the system is not perfect.
“CARB staff believe that these default settings generally result in high conservative CI (carbon intensity) estimates for crudes that lack more specific field input data,” he writes.
The agency went on to say that it is aware of the impacts of greenhouse gas reduction programs. CARB instead said it was considering updating its modeling to better reflect methane reductions in the state. But he dismissed the idea of giving more weight to the use of solar power in oil production, saying credit is already given to companies doing the work.
CIPA’s Zierman cautioned against assuming that foreign oil imports into California are always lighter than domestically produced crude. Since refineries in the state primarily consume heavy oil, he said, tighter regulation under the Newsom administration means California oil is increasingly being replaced by heavier imports.
“That’s why imports from Ecuador, which are heavy, are now the number one source of imports into North America,” he said.
Oil industry-backed study highlights concerns Sacramento agrees to address to ensure foreign crude doesn’t gain an unfair advantage in the market over in-state production due to gaps in data from California’s fuel “carbon intensity” rating system.
Last month’s report from the nonprofit Institute for Energy Research highlighted what it called serious flaws in Stanford University’s oil production greenhouse gas emissions estimator. , or OPGEE, which the California Air Resources Board uses to determine combustion costs attributed to refineries.
CARB challenged some of the report’s findings via email, but conceded that the OPGEE system would be more accurate if it took into account more data from foreign and domestic oil producers. He noted that the agency was already considering crediting domestic producers for reducing methane emissions, which was one of the report’s recommendations.
Where the two sides may continue to disagree is over whether the state is correctly estimating the emissions volumes associated with imported oil. OPGEE uses a default value that the IER study finds unrealistic, but which CARB has defended as contributing to a “conservatively high” climate intensity score for foreign oil.
The Kern-centric state oil industry has long accused the Newsom administration of hobbling California producers by tightening control and banning certain technologies while refusing to recognize environmental and labor conditions in Ecuador and Saudi Arabia, California’s two main foreign sources. With the IER study released July 18, the industry sees what it sees as further evidence of an uneven playing field amid the state’s gradual transition to a cleaner energy future.
California Independent Petroleum Association trade group CEO Rock Zierman called for OPGEE to be fixed not only because the system is used to set state targets, but also because its rankings are cited by industry critics.
“These groups are actively asking the state to replace domestic production (70% at Kern) with imported foreign crude and justifying it with the misconception that imports are ‘cleaner,'” Zierman said via email.
Stanford, which designed and maintains OPGEE, did not respond to requests for comment.
A group of environmental advocacy and environmental justice groups active in shaping petroleum regulatory policy declined to comment on the IER study.
For its part, CARB has opened the door to limited adjustments to the system, including new credits for state producers. He said the agency “is open to operators submitting more specific field data to potentially supplement the inputs used in OPGEE.”
The IER, championed by industry for its research on national energy policies, noted in a study published July 18 that OPGEE is supposed to estimate the emissions created during the production, processing and transportation of fuel from transportation. The system determines which deficits and credits under California’s low-carbon fuel standard cost refiners more or less money depending on where the fuel they process comes from.
The study lists several ways that OPGEE overestimates the carbon intensity of oil produced in California and underestimates that of foreign oil.
He alleges that the system ignores real, verified data that CARB has already collected on oil produced in the state, and that the state’s use of the system underrepresents emissions from Ecuador and India. Saudi Arabia.
OPGEE also ignores the impact of California mandates on greenhouse gas reductions and the fact that foreign producers are not participating in the state’s cap-and-trade program on air pollution, said the exam, developed by Catalyst Environmental Solutions Corp., a Santa Monica consulting firm. specializing in areas such as the energy sector, and Yorke Engineering, a San Juan Capistrano-based company specializing in environmental permits and compliance.
“Each of these factors individually disadvantages in-state production in favor of imports. Combined, these errors create a very skewed picture of California’s IC production,” the report said. “This means compliance with the LCFS is easier if imported crude oil is used in preference to domestic production in the state.”
He said the simple application of data on greenhouse gas reduction success stories would show substantial and ongoing reductions in the carbon intensity of oil produced in California.
“If the goal is GHG reduction,” he said, “then correcting the OPGEE model should be an immediate priority.”
CARB’s email comments on the IER review began with the general observation that California crude tends to be heavier than major foreign sources refined in the state. In many cases, steam is needed to produce oil in the state, which in turn increases its OPGEE carbon intensity score.
Regarding accusations that CARB is ignoring its own verified oil intensity data, the agency said the information it has is not designed to support the full life cycle analysis required by the OPGEE. For example, he said his data does not address changes in land use, transportation, or the upstream production of process fuels like natural gas.
He invited California oilfield operators to provide detailed, field-specific data on production methods that could be considered by OPGEE.
CARB has denied IER’s allegation that it underestimates the pollution emitted by tankers carrying foreign oil to US ports. He said the study erred in reporting that OPGEE calculates transportation emissions using a default value of 5,082 miles and only considers one-way trips. In fact, the CARB email says it incorporates the 13,076 miles to Saudi Arabia plus the total return distance.
On the issue of allegedly inaccurate estimates of emissions from foreign oil production, CARB noted that OPGEE assigns default parameters when it does not have oilfield-specific data, which is often the case with crude supplied abroad. He defended these defaults as being based on the best information available, although he acknowledged that the system is not perfect.
“CARB staff believe that these default settings generally result in high conservative CI (carbon intensity) estimates for crudes that lack more specific field input data,” he writes.
The agency went on to say that it is aware of the impacts of greenhouse gas reduction programs. CARB instead said it was considering updating its modeling to better reflect methane reductions in the state. But he dismissed the idea of giving more weight to the use of solar power in oil production, saying credit is already given to companies doing the work.
CIPA’s Zierman cautioned against assuming that foreign oil imports into California are always lighter than domestically produced crude. Since refineries in the state primarily consume heavy oil, he said, tighter regulation under the Newsom administration means California oil is increasingly being replaced by heavier imports.
“That’s why imports from Ecuador, which are heavy, are now the number one source of imports into North America,” he said.