Oil is one of the world’s most durable global commodities. With few ready commercial substitutes, its extraordinary staying power is demonstrated by its enduring energy sector dominance, even as market prices fluctuate dramatically and geopolitical disruptions strike. In addition to ever present economic and security concerns, climate change is a third factor that must now be fully considered. This puts a premium on the ability to quantify greenhouse gas (GHG) emissions through the oil value chain to see how they vary in upstream production and crude transport, midstream refining, and downstream product transport and end use. To address this knowledge gap, the Carnegie Endowment for International Peace, in collaboration with researchers at Stanford University and the University of Calgary, developed a first-of-its-kind Oil Climate Index (OCI). This open source web tool conducts a “crude-centric” lifecycle assessment of oil from the barrel forward through consumption of all its end products. The OCI demonstrates that total GHG emissions can vary significantly—by as much as nearly a factor of two overall, depending on the oil itself and the operating techniques employed, and a factor of ten in upstream and midstream GHG emissions. Given available data, competing fossil fuel resources can be modeled using the OCI to identify emissions reduction opportunities to successfully manage their GHG emissions.
The variations in GHG emissions between oils are large enough to matter. These differences should prompt innovations in data collection, analysis, risk assessment, and policy design. The “crude-centric” approach can help producers, refiners, oil traders, policymakers, investors, academics, NGOs, and the public focus attention on successfully mitigating total GHG emissions from the oils sector. Accomplishing these goals will require widespread adoption of this new way of “crude-centric” thinking. Future phases of the OCI will continue to probe energy sustainability via innovation, including the forthcoming addition of the GHG assessment of global gas fields to the OCI.