Earth Equity News

The Cost of Dirty Fuels. By Kate Galbraith, NYTimes, October 8, 2008. "Producing fuel in unconventional ways, such as from oil sands or coal, would significantly increase carbon emissions relative to conventional oil production, according to a study [Unconventional Fossil-Based Fuels: Economic and Environmental Trade-Offs, PDF 98 pp; report summary, PDF, 9 pp] released on Wednesday by the RAND Corporation, the nonpartisan research institute based in Santa Monica, Calif. The study... found that crude derived from oil sands is already cost-competitive, and would likely remain so even if policymakers introduced a cap on carbon emissions that drove up the price of the fuel. However, the economics of coal-to-liquids are less certain, RAND found, because the technology is largely untested and its viability would be significantly affected by fluctuation in oil prices... The study avoided a determination on the emissions profile and price of oil-shale production, another unconventional domestic energy source, due to technological uncertainties... It found that producing synthetic crude oil from oil sands had 10 to 30 percent higher emissions than conventionally produced crude. (Oil-sands production also requires a huge amount of water, another environmental concern.) Coal to liquids carried more than twice the emissions of conventional crude... Because of the concerns about emissions, carbon capture and storage 'would basically have to be a pre-condition' of coal-to-liquid fuels, said Paul Bledsoe of the National Commission on Energy Policy, which sponsored the report. 'It's clearly going to take a good deal of government demonstration projects as well as significant tax incentives for commercial-scale application to begin,' he said. The study found that carbon capture and storage could add 25 percent to the cost of coal to liquids production. The RAND study was concluded before President George Bush signed into law last week's bailout bill, which included incentives for dirty fuels such as oil shale and coal-derived airplane fuel, as [NYTimes reporter] Jad Mouawad wrote last week. The law also includes incentives for carbon capture and storage."