The properties of oil gravity and sulfur content (pictured above) are not clearly correlated with a crude stream’s life-cycle GHGs. The GHG emissions intensity of refining oil varies significantly based on how the crude oil was produced and the specific processes used at a refinery. Source: US Energy Information Administration Among the top 10 most used crude oils, Urals crude, which comes from Russia’s oil fields in Western Siberia, is the most produced crude stream at nearly 10 mbd and has the highest upstream (oil well) CO 2 intensity.Įxhibit 1: Key properties of crude oils by source Half of Russia’s crude oil sales to the EU are in the form of Urals crude with roughly average properties (see Exhibit 1), while the other half are unspecified but are less dense and lower in sulfur. The most common defining properties affecting refinery operations are sulfur content and API gravity, or similar measurements of crude oil density. Refineries are specifically designed to process a narrow range of crude streams based on various characteristics. Intermission: Matching Low-Emissions Crude to the Right RefineriesĮurope’s primary challenge is replacing Russian oil with sources that are chemically similar and competitively priced, and that also provide an opportunity to reduce the carbon footprint of fossil fuel supplies. The sanctions target a 90 percent reduction in Russian oil imports by year-end through the immediate phaseout of seaborne oil (nearly two-thirds of EU’s Russian imports) and eventual phaseouts of oil by pipeline, although the timing for the latter remains undetermined. Russia accounted for over 25 percent of 2021 EU oil imports across 2.2 million barrels per day (mbd) of crude and 1.2 mbd of refined products. The EU adopted broad sanctions on Russian oil that take effect by the end of 2022. Act 1: Disrupting 25 Percent of the EU Crude Oil Status Quo More climate-conscious decisions by EU refineries can lead the way. Governments and oil executives must support full supply-chain emissions visibility through these shifts, thinking through the lens of greenhouse gas (GHG) intensity to maximize financial and climate benefits. The global oil industry will need to retool to meet this new landscape and can profitably reduce emissions in the process. An analysis of the viable replacements for Russian oil imports shows that lower-emissions alternatives are available to the EU, but making the switch will not be as simple as dropping in one crude oil stream to replace another. Until then, Europe’s phaseout of Russian oil supply introduces opportunities to reduce supply-side emissions and shift oil prices closer to their true climate cost. Europe needs to accelerate the build-out of its clean energy infrastructure to reduce oil demand.
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