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A method combining life cycle assessment (LCA) and real options analyses is developed to predict project environmental and financial performance over time, under market uncertainties and decision-making flexibility. The method is applied to examine alternative uses for oil sands coke, a carbonaceous byproduct of processing the unconventional petroleum found in northern Alberta, Canada. Under uncertainties in natural gas price and the imposition of a carbon price, our method identifies that selling the coke to China for electricity generation by integrated gasification combined cycle is likely to be financially preferred initially, but eventually hydrogen production in Alberta is likely to be preferred. Compared to the results of a previous study that used life cycle costing to identify the financially preferred alternative, the inclusion of real options analysis adds value as it accounts for flexibility in decision-making (e.g., to delay investment), increasing the project's expected net present value by 25% and decreasing the expected life cycle greenhouse gas emissions by 11%. Different formulations of the carbon pricing policy or changes to the natural gas price forecast alter these findings. The combined LCA/real options method provides researchers and decision-makers with more comprehensive information than can be provided by either technique alone. [ABSTRACT FROM AUTHOR]

Life cycle greenhouse gas (GHG) emissions associated with two major recovery and extraction processes currently utilized in Alberta's oil sands, surface mining and in situ, are quantified. Process modules are developed and integrated into a life cycle model-GHOST (GreenHouse gas emissions of current Oil Sands Technologies) developed in prior work. Recovery and extraction of bitumen through surface mining and in situ processes result in 3-9 and 9-16 g CO2eq/MJ bitumen, respectively; upgrading emissions are an additional 6-17 g CO2eq/MJ synthetic crude oil (SCO) (all results are on a HHV basis). Although a high degree of variability exists in well-to-wheel emissions due to differences in technologies employed, operating conditions, and product characteristics, the surface mining dilbit and the in situ SCO pathways have the lowest and highest emissions, 88 and 120 g CO2eq/MJ reformulated gasoline. Through the use of improved data obtained from operating oil sands projects, we present ranges of emissions that overlap with emissions in literature for conventional crude oil. An increased focus is recommended in policy discussions on understanding interproject variability of emissions of both oil sands and conventional crudes, as this has not been adequately represented in previous studies. [ABSTRACT FROM AUTHOR]

Greenhouse gas (GHG) emissions associated with extraction of bitumen from oil sands can vary from project to project and over time. However, the nature and magnitude of this variability have yet to be incorporated into life cycle studies. We present a statistically enhanced life cycle based model (GHOST-SE) for assessing variability of GHG emissions associated with the extraction of bitumen using in situ techniques in Alberta, Canada. It employs publicly available, company-reported operating data, facilitating assessment of inter- and intraproject variability as well as the time evolution of GHG emissions from commercial in situ oil sands projects. We estimate the median GHG emissions associated with bitumen production via cyclic steam stimulation (CSS) to be 77 kg CO 2 eq/bbl bitumen (80% CI: 61-109 kg CO 2 eq/bbl), and via steam assisted gravity drainage (SAGD) to be 68 kg CO 2 eq/bbl bitumen (80% CI: 49-102 kg CO 2 eq/bbl). We also show that the median emissions intensity of Alberta's CSS and SAGD projects have been relatively stable from 2000 to 2013, despite greater than 6-fold growth in production. Variability between projects is the single largest source of variability (driven in part by reservoir characteristics) but intraproject variability (e.g., startups, interruptions), is also important and must be considered in order to inform research or policy priorities.