Poster for SETAC Europe 2013 on fossil resource scarcity


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This poster summarizes our findings regarding the method developed to assess future consequences of fossil resource extraction by monetisation.

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Poster for SETAC Europe 2013 on fossil resource scarcity

  1. 1. Monetisation of fossil resource depletion byassessing the surplus cost T.C. Ponsioen1, M.D.M. Vieira1, and M.J. Goedkoop1. E-mail contact: ponsioen@pre-sustainability.com1 PRé Consultants BV, Printerweg 18, NL-3821 AD Amersfoort, The Netherlands1. IntroductionDepletion of fossil resources has a large impact on our energy intensive lifestyles. In lifecycle impact assessment (LCIA), indicators for pollution-related impacts are relativelywell established. For resource depletion, however, there is still little agreement on theimpact pathway approach [1]. The different types of LCIA methods that have beendeveloped for fossil resource use, each describe different effects [2]. Some methodsdescribe the future consequences of resource extraction, based on the concept thatextracting easily found resources now means that in the future (lower value) resourcesneed to be extracted under more challenging conditions and with alternativetechnologies. The additional efforts that are required can be described by higher energyrequirements or additional costs, which have an increased effect on the environmentand economy [3] [4].We propose a method to assess future consequences of fossil resource extraction bymonetisation. The method is based on surplus cost, as first applied by the ReCiPemethod [4]. This study intends to improve the method by using new data and insights.2. Materials and methodsThe environmental mechanism of the indicators in the method here proposed isillustrated with the example of crude oil in Figure 1. The additional production costs,including mining, processing and transport costs from the mine to the port, are causedby depletion of fossil resources that are extracted using the lowest cost productiontechnique and/or geographical distribution. For example, when all conventional oil isdepleted, alternative techniques, such as enhanced oil recovery or deep waterextraction, will be applied. The marginal cost increase (MCI) is the cost of the additionalinputs needed to produce another unit of the resource. The MCI was calculated forcrude oil, natural gas and coal separately, based on data from the International EnergyAgency [5] [6] [7] (for example, see Figure 2).As damage indicator, we propose the surplus cost (SC) from fossil resource depletion,which is the total additional future cost to the global society due to the production ofone unit of fossil resource and is related to a certain future global production volume.We used future production simulation results from the SRES scenario study by the IPCC[8] and chose different scenarios for three different societal perspectives. We alsochose different fixed discount rates for those perspectives (individualist 0%, hierarchist3% and egalitarian 15%).4. Conclusions• We developed a life cycle impact assessment method for fossil resource depletion,in which the marginal cost increase is calculated as an intermediate parameter andsurplus cost is calculated for three perspectives – individualist, hierarchist andegalitarian – as a damage indicator.• When expressing the characterisation factors per gigajoule, the impacts are highestfor crude oil and lowest for coal.• In absolute terms, the impacts at endpoint level are highest in the egalitarian andlowest in the individualist perspective.• The MCI ratios between the different fossil resources are similar to the ratios of thesurplus cost in the individualist and hierarchist perspectives.• The depletion of other resources, such as minerals, can be modelled in a similar wayto calculate comparable characterisation factors.References[1] EC-JRC-IES. 2011. International Reference Life Cycle Data System (ILCD) Handbook - Recommendations for Life CycleImpact Assessment in the European context. First edition November 2011. European Commission-Joint Research Centre -Institute for Environment and Sustainability. Luxemburg.[2] Steen, BA. 2006. Abiotic Resource Depletion Different perceptions of the problem with mineral deposits. InternationalJournal of Life Cycle Assessment 11 (1), 49-54.[3] Goedkoop, M, Spriensma, R. 2001. The Eco-indicator 99: A damage oriented method for Life Cycle Impact Assessment– Methodology Report. 3rd edition. Ministerie van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer.[4] Goedkoop, M, De Schryver, A. 2009. Fossil Resource. Chapter 13 in: Goedkoop, M, Heijungs, R, Huijbregts, MAJ, DeSchryver, A, Struijs, J, Van Zelm, R. 2009. ReCiPe 2008 A life cycle impact assessment method which comprises harmonisedcategory indicators at the midpoint and the endpoint level. Report I: Characterisation factors, first edition.[5] IEA. 2010. Resources to Reserves 2010. Oil, Gas and Coal Technologies for the Energy Markets of the Future. To bereleased Autumn 2010.[6] IEA, 2009a. World Energy Outlook 2009. OECD/IEA, Paris, France.[7] IEA, 2011a. Coal. Medium-term market report 2011. Market trends and projections to 2016. IEA, Paris, France.[8] IPCC. 2000. Emission scenarios. A special report of the IPCC working group III.Acknowledgement - The research was funded by the European Commission under the 7th framework program onenvironment; ENV.2009. LC-IMPACT - Improved Life Cycle Impact Assessment methods (LCIA) for bettersustainability assessment of technologies, grant agreement number 243827.01020304050607080901000 1000 2000 3000 4000 5000Productioncost(2008USDperbarrel)Cumulative production (billion barrels)Oil shalesHeavy oil bitumenArcticAll deep waterOther EORCO2 EOROther conv. oilMENA conv. oilFigure 2. Cost-cumulative production data for crude oil. Legend: EOR - enhanced oil recovery; conv.- conventional; MENA - the Middle East and North Africa region; source: [5]Individualist Hierarchist EgalitarianCrude oil 0,72 2,9 14,1Natural gas 0,25 1,5 6,7Coal 0,0043 0,033 30246810121416Surpluscost(US$perGJ)Figure 3. Average and standard deviation of the surplus cost in US$ per GJ fossil fuel for differentperspectives using fossil fuel production3. Results and discussionThe characterisation factors derived show that the ratios between the indicators of thedifferent types of fossil resources (crude oil : natural gas : coal) are rather constant inmost cases, only in the egalitarian perspective the ratio deviates because only therezero discounting is applied (individualist 100:39:0.7; hierarchist 100:54:1.1; egalitarian100:47:21) (Figure 3). The MCI gives a similar ratio (100:48:1.0); so, in general, the MCIgives a good indication of the impact indicator. However, there are large differencesbetween the surplus cost characterisation factors for each perspective in cost pergigajoule (egalitarian > hierarchist > individualist). From Monte Carlo simulations, wefound that data uncertainty is rather low. However, the results are extremely sensitiveto the assumed discount rate.Marginal cost increase of crude oil(US$/GJ)Crude oil useFuture production of crude oilSurplus cost (US$)Productiontechnique/locationCrude oil demandPopulation growthEconomic growthSubstitutionTechnologicaldevelopmentReduced availability at current costFigure 1: The environmental mechanism of the surplus cost indicator for crude oil