EISA Section 526: Impacts on DESC Supply
Abstract
Section 526 of the Energy Independence and Security Act of 2007 (EISA) limits federal agencies with respect to the purchase of petroleum products derived from unconventional or alternative fuel sources whose lifecycle greenhouse gas emissions exceed those from conventional crude oil. Petroleum products derived from oil sands crude are estimated to have lifecycle emissions exceeding those from conventional oil and under some interpretations of section 526, might be significantly restricted from government purchase. The Defense Energy Support Center (DESC) is the principal purchaser of petroleum products for the U.S. military. DESC wants to examine the impacts of section 526 on its domestic bulk purchases of military fuels, specifically those that might be derived from Canadian oil sands recovered crude (COSRC). We find that section 526 is not completely clear concerning what is covered nor the amounts involved. One interpretation is that the Department of Defense is only constrained from specifically contracting for products produced from oil sands crude. Another is that products supplied to DESC cannot be predominantly produced from oil sands crude. And a third is that products supplied to DESC can contain only incidental amounts of oil sands crude, DESC's bulk fuel purchases of fuels will be importantly affected by which of these interpretations governs. Refiners invest in certain types of processing equipment to handle large quantities of heavy crudes such as those from oil sands. Generally, refiners who process such crudes in significant quantities have catalytic hydrocracking or coking (CorC) capabilities. In this study, we examine which of DESC's suppliers pos-sessed such equipment in FY03?06 and which are planning to add it over the next few years. Taking into account CorC processing capability plus access to pipelines, pub-lished reports, and private communications, we could identify only four DESC suppliers that definitely have been processing COSRC.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 01, 2009
- Accession Number
- ADA502264
Entities
People
- Michael E. Canes
- Rachael G. Jonassen
Organizations
- LMI