Know Your Oil Bill: Ignorance About CA Crude Is Not Bliss

California has generally been a leader in ensuring that consumers have comprehensive information about our products. We’re surrounded by Proposition 65 warnings about chemical hazards, and everything from olive oil to cannabis is subject to some pretty intense origin and ingredient disclosure requirements.

Yet somehow in all this, California’s oil industry has managed to fly under the radar. The industry is one of California’s largest polluters, with production and refining contributing roughly 50 percent of the state’s total industrial greenhouse gas emissions, not to mention other pollutants. But we actually know very little right now about the crude oils produced and refined here: what their chemical properties are, how much carbon pollution they generate, and what sorts of toxic constituents are in them. 

Fortunately, the California legislature will have a chance to change that. Assemblymember Todd Gloria has introduced the “Know Your Oil” bill, Assembly Bill 3217, which would require long-overdue disclosure of information from California’s producers and refiners about the makeup of the oil they process. The Know Your Oil bill is conceptually grounded in a Carnegie Endowment report by that name, which explains why developing full information about crude oil composition and its impact on greenhouse gas emissions is essential to sound climate policy.

Having this information about California crudes could be a huge help to regulators seeking to more effectively measure and address the carbon footprint of the state’s declining but still behemoth oil industry; as well as to California refinery communities who want to better understand the pollutants and risks they are daily exposed to. AB 3217, sponsored by NRDC and Communities for a Better Environment, would also direct the California Air Resources Board (ARB) to use the data to calculate the cradle-to-grave carbon footprint of California’s oils. 

While we currently lack extensive information about the specific makeup of California crudes, one thing we do know is that they include some of the dirtiest in the world –rivaling in some cases Canadian tar sands crude in carbon intensity, and containing high levels of sulfur. California oil fields are quite old, many having been in production since the early 20th century. The readily available oil is gone, and what’s left in many cases is a thick, gooey substance that has to be messily and carbon-intensively steamed out of the ground. This heavy oil takes more energy to refine; and the refining process produces huge volumes of petroleum coke, or “petcoke”—a dusty black end product that’s too dirty to burn for energy in many U.S. industries, so it’s exported overseas in huge quantities by California refineries. 

The problem is, that’s about all we know. For the comparably dirty Canadian crudes, we at least have a decent amount of information about their chemical makeup and carbon footprint. We have that information because when crude oils are heavily traded internationally, as Canada’s and many other countries’ are, the producers include data from a crude oil “assay” in their marketing information to prospective refiners. An assay is essentially a breakdown and full description of a crude oil’s chemical properties performed by a laboratory. A complete assay will tell you everything from a crude oil’s density, to how it will behave at different temperatures in the refining process, to what its chemical constituents are (which can include some nasty toxics like mercury and benzene). With this information, you can derive a clear picture of what the crude’s carbon emissions will be from production through combustion; and what other pollution will result from those processes. 

In California, though, producers aren’t marketing the oil internationally, they’re selling it more or less exclusively to the same California refiners they always have. These are basically handshake deals, that don’t involve use of assays as a marketing tool. Thus, while there is an online library of Canadian crude assays, publicly available assay data is largely non-existent for California. As a result, regulators trying to understand, measure, and regulate California’s crude oils are left with only a desultory smattering of assays that have been made available in the past, some of them decades old. These assays are used to define the properties of entire oil fields, even though the characteristics of oil—and hence its pollution footprint—often vary widely within a field. 

Filling this informational black hole would have multiple benefits for both California regulators and communities:

  • Keeping refinery communities informed. Communities living with refineries in their midst need to know about levels of pollutants in the crudes being processed there, and what risks they face as a result. The 2012 fire at the Chevron refinery in Richmond, after which 15,000 area residents appeared at local hospitals complaining of respiratory distress, was determined to be related in part to corrosion associated with the sulfur content of the crude oils processed there. At the very least, residents should have the tools they need to understand whether the crude being refined near them creates a heightened risk of such events; and about the levels of toxics that may be affecting their already burdened environmental quality. 
  • More effective implementation of existing climate assessments. California, via ARB, has in place groundbreaking programs to assess and mitigate its climate emissions, including the Low Carbon Fuel Standard (LCFS) and the AB 32 emissions accounting and cap-and-trade programs. Making available to ARB and the public full information about the properties of California crude oils would open up possibilities for more robust implementation of these programs. 
  • Managed decline guidance. Governor Newsom has repeatedly made clear an intention to manage the decline in California’s crude oil production. This means, among other things, making an informed decision about which crudes are the most problematic from a health and environmental standpoint, and hence should be the first taken offline. Assay data supporting accurate calculations of greenhouse gas emissions for different California crudes would be immeasurably helpful in facilitating that determination. 
  • Developing mitigation strategies. Since California’s oil industry is not going to go away overnight, it’s also important to develop effective strategies to mitigate its carbon footprint. Assay data is an essential prerequisite—particularly with respect to refining—to identifying means to eliminate carbon emissions from the process.

AB 3217 would not only require California producers and refiners to produce assays to ARB (and ARB to make them public), but would work immediate benefit from this information by directing ARB to use it to calculate the life cycle carbon emissions of California-produced crudes. It’s slightly embarrassing that even our train-wrecked federal environmental regulatory system requires a calculation of life cycle emissions associated with fossil fuel production approvals, but California does not. Under the National Environmental Policy Act, when the federal Bureau of Land Management approves drilling or mining on federal lands, the agency is required to determine the carbon footprint of both extraction and eventual combustion of the extracted fuel. California’s oil and gas regulators do nothing of the sort under the state’s counterpart California Environmental Quality Act (CEQA). 

Getting California regulators to step up their CEQA game and perform that analysis when authorizing drilling may need to wait for another day, but AB 3217’s mandate to generate life cycle emissions data is clearly a step in the right direction toward making California’s fossil fuel industry account for its carbon footprint. Among other things, the life cycle analysis would capture and force a hard look at refinery emissions individualized by crude oil type, as well as the significant fraction of the California oil industry’s life cycle emissions that are exported from the state in the form of petcoke. Petcoke combustion emissions are not included in California’s AB 32 greenhouse gas inventory since the combustion occurs outside our borders, but that doesn’t make them any less a contributor to global climate change. 

Asm. Gloria has appropriately recognized that what we don’t know about California crude oil can, in fact, hurt us quite a lot. We’re hopeful that the legislature and Governor Newsom will conclude, as he has, that ignorance about our state’s very dirty oil is not bliss.