Greehouse Gas Emissions and Northern Gateway

The issue of greenhouse gas emissions came up during the Northern Gateway hearings on September 17th. Northern Gateway is a pipeline proposed by Enbridge, and the proposed route is from Edmonton to Kitimat, which has the third largest port on the west coast. There has been considerable public debate regarding the merits of the pipeline, with substantial opposition from a number of groups and individuals in British Columbia. The National Energy Board has a Joint Review Panel currently evaluating the pipeline proposal. The Panel’s purpose is to gather information, assess the environmental effects of the project, and make a recommendation on whether the pipeline should be approved. As part of the hearings, currently ongoing in Edmonton, individuals granted intervenor status can ask questions of Enbridge.

During the September 17th session, Mr. Peter of CJ Peter Engineering cross-examined Enbridge witnesses based on the Wright Mansell report’s cost-benefit analysis, which included GHG emissions associated with the construction and operation of Northern Gateway. From reading the transcript, it seems to me that he is trying to make the point that Northern Gateway will cause GHG emissions to increase, as noted in a Calgary Herald article on September 18th.

One thing Mr. Peter didn’t consider was the greenhouse gas emissions of transportation alternatives to Northern Gateway. Producers have essentially three ways to get the crude out of Alberta: pipeline, rail and truck. While pipeline is the preferred method – it is faster and cheaper – as long as the price is high enough, rail and truck will be viable options.

The expected capacity of Northern Gateway is 525,000 barrels of oil per day. The Wright Mansell report assumes Canadian oil sands production remains the same in the presence of Northern Gateway. That means in the absence of Gateway, the same 525,000 barrels per day will be shipped in some other manner. So the effect of Northern Gateway will be to move production to BC (and onward) which would otherwise have gone to other markets via other pipelines, truck or rail. I’ll continue with that assumption – this is a post about GHG emissions from different transportation alternatives, though of course any estimate of emissions will depend on how much oil is transported, and in what fashion.

Mr. Peter is claiming extremely high emissions will be associated with Northern Gateway. He has a rough calculation of the well-to-wheel GHG emissions: 101,771 metric tonnes per day. At $20 per metric tonne, the cost per year is $742,930,000. This calculation includes emissions from production, transportation, refining and use of the oil. What is important in the context of the Northern Gateway hearings is the footprint of the pipeline, not total emissions from the use of the transported product. The relevant numbers are the emissions associated with operation of the pipeline. The estimates from the Wright Mansell report are costs of $4 million per year during operation, or GHG emissions of 200,000 metric tonnes per year, equivalent to just under 548 tonnes per day.

So, what should we compare this number to? The next best alternative to a pipeline is rail. What is the GHG footprint of transporting that much oil by rail? Let’s do a quick calculation, based only on the equivalent weight of oil transported by rail. First, let’s convert barrels to tonnes. I used the characteristics of Western Canadian Select (930.1kg/m3) from the Cenovus website, and a conversion of 1 m3 to 6.23 barrels. Based on this, Northern Gateway would transport 78,379 metric tonnes per day.

The CN GHG emissions calculator gives 1.7 tonnes of carbon dioxide for transporting 79.9 tonnes 1177 km, the length of Northern Gateway.* By this rough calculation, the GHG emissions from transporting 525,000 boe are 1667 tonnes of CO2 per day. The annual cost is over $12 million dollars, and at a 5% discount rate, the present value is nearly a quarter billion.

The environmental footprint of using rail instead of Northern Gateway to transport oil is three times as large. And my estimate likely understates this difference, as the Wright Mansell numbers included emissions from the pipeline, the marine terminal and tankers in Canadian waters. While Mr. Peter’s efforts to make us consider the environmental footprint of Northern Gateway are laudable, we should be far more concerned with the footprint of transportation alternatives when considering the GHG emissions associated with pipelines.

How concerned should we be? According to CANSIM table 404-0021, in 2010 (latest data available), 1.95 million tonnes of fuel oils and crude petroleum were exported by rail from Alberta, 27% to international destinations. While it seems like a large number, it’s only 5,300 tonnes per day, substantially less than what could be transported by Northern Gateway. Though in the absence of pipeline capacity, the amount shipped by rail is bound to increase (see here and here for news articles on planned increases in rail use).

*The BNSF Railway Carbon Estimator assumes 88.1 (imperial) tons of crude oil per rail car, which is 79.9 metric tonnes.