# Presentation: 765455

- Hybrid Input-Output
- Lifecycle Models

- Heather L. MacLean
- University of Toronto
- hmaclean@ecf.utoronto.ca

- Oil Transition Workshop
- April 20, 2006

## Outline

- Motivation for life cycle perspective in informing oil transition
- Life cycle approaches
- Conventional process model based
- Economic Input-Output (EIO) based
- U.S., Canadian, Binational
- Hybrid life cycle approaches
- EIO model limitations/advantages
- Future application of hybrid model to oil sands

## Motivation

- Life cycle perspective required for informed decision-making for oil transition
- Multi-attribute nature of decision problem
- Requires broader analysis than conventional life cycle assessment
- Focus on energy use, greenhouse gas & air pollutant emissions
- Fuel cycle and conversion system
- Limited set of supply chain activities
- Strength is analysis of existing systems

## Analysis (optimally) should include;

- Three components of sustainability
- Environmental (global, regional, local)
- Economic
- Social
- Also,
- Technological change
- Dynamic analysis
- Expanded boundary (activities, international)
- Explicit uncertainty analysis
- Transparency

## Life Cycle Assessment (LCA)

- Conventional process-based (SETAC/EPA)
- Economic Input-Output based (EIO-LCA)
- Hybrid approaches

## Circularity effects in economy must be accounted for:

- Cars are made from steel, steel is made with iron ore, coal, steel machinery, etc. Iron ore and coal are mined using steel machinery, energy, etc...

- emissions

- product

## Economic Input-Output (EIO) LCA

- $100 Million  Demand for Motor Vehicles

- IO tables quantify interrelationships between industrial sectors in an economy (Leontief, 1941)
**Environmental IO extends IO analysis to account for direct and indirect environmental effects in an economy**

## U.S. Economic Input-Output Life Cycle Assessment (EIO-LCA) model

- Originally developed by Carnegie Mellon University’s Green Design Institute (1995)
- 1 million users to date
- Standard augmented SNA framework
- 1997 US Benchmark Input-Output Table
- 	(491 industry sectors)
- Coupled to wide array of environmental data
- Energy, fuel use, greenhouse gases, air pollutants, toxic releases, social costs, OSHA
- Available at: _[www.eiolca.net](http://www.eiolca.net/)_

**Notes:**
Standard augmented SNA framework:

## Canadian EIO model

- Developed by University of Toronto
- 	(Bjorn et al., 2004)
- Augmented SNA framework
- 1997 Canadian IO table (117 sectors)
- Energy and fuel use, greenhouse gases, toxic releases (Statistics Canada)
- Next steps: water use, air pollutants
- 	Both US and Canadian models have competitive import assumption

## Comparing US and Canada

- Propane

- Coal

- Petroleum Products

- Electricity

- Natural Gas

**Agriculture**

**Mining, Oil & Gas**

**Manufacturing**

- U.S.

- Canada

- U.S.

- Canada

- U.S.

- Canada

- Significant international differences in fuel use:

## Binational U.S./Canada EIO model

- 	Based on a Chenery-Moses Multiregional IO Framework (Chenery & Clark, 1959; Moses, 1955)
- 76 sectors
- Separates out trade in the U.S./Canada IO tables
- Final demand = domestic demand + exports
- Economic output = domestic output + imports

**Notes:**
Modified to account for competitive imports

## US energy “pull” on Canada (top sectors)

- US energy “pull” on Canada (top sectors)

- Energy Use Resulting from $1M U.S. Final Demand

- TJ/$US Million of U.S. Final Demand

***Petroleum mfg.***

***Oil & gas extraction***

## Canadian energy “pull” on US (top sectors)

- Energy Use Resulting from $1M Canadian Final Demand

**TJ/$US Million of Cdn. Final Demand**

***Pesticides, fertilizer mfg***

***Chemical mfg.***

## Energy use: final demand $25,000 motor vehicles sector in Canada

**Notes:**
2211 Electric power generation
3361 Motor vehicle manufacturing
3310 Primary metal manufacturing
221A Natural gas distribution & utilities
336A Motor vehicle body, trailer, & parts mfg.
4820 Rail transportation
3251 Basic chemical manufacturing
5418 Advertising and related services
4840 Truck transportation
3270 Non-metallic mineral product mfg.

## EIO-LCA

- Limitations
- Simplified linear, static view
- Aggregation issues
- “Cradle-to-gate”
- Not sufficient for regional/local implications
- Monetary vs physical units basis
- Strengths
- Intersectoral detail
- System boundary is entire economy (US/Canada)
- Quick, transparent – often needed for ‘real-world’ policy (publicly available data)
- Good first-round estimation for a snapshot in time

## Potential of hybrid LCA models

- Incorporate advantages of SETAC/EPA and EIO models, lessen disadvantages
- Include detailed, process-level data, as well as the economy-wide effects
- What questions could the model address?
- Effects of choice of resources/ conversion processes on environmental impacts
- Impacts on economic variables of a transition from conventional oil

## Alberta’s oil sands

**Notes:**
In situ crude bitumen can be used directly by some refineries
Mined requires upgrading

## Oil sands prod. 2004

*Source: CAPP 2005*

*Oil sands prod. 2004*
*1 million bpd*

*WCSB = Western Canada Sedimentary Basin*

## Schematic diagram of oil sands hybrid LCA

**Canada/US**
**EIO**
**model**

**Region**
**and**
**sector**
**specific**
**process **
**model**

**Oil sands **
**extraction**
**and**
**upgrading**

**Oil & gas**
**extraction**

**Machinery**
**manufacture**

**Non-res.**
**construction**

**Natural gas**

**Construction**

**Labor**

**Bitumen**

**Refined**
**products**

**Electricity**

**National emissions/**
**$ econ. activity**

**Regional emissions**
**factors**

**Process & assoc. **
**emissions**

**Notes:**
EIO-LCA model of Canadian (US) economy
Region and sector-specific process model
Data specific to oil sands technologies

Non res. = non residential
In-situ, mining
Upgrading facility

## Auto-21 Network Centre of Excellence
General Motors
NSERC

Jon Norman, Ph.D. student
Thomas Ferguson, MASc. student
Shiva Habibi, postdoctoral fellow
Prof. Scott Matthews, Carnegie Mellon U.

- Auto-21 Network Centre of Excellence
- General Motors
- NSERC
- Jon Norman, Ph.D. student
- Thomas Ferguson, MASc. student
- Shiva Habibi, postdoctoral fellow
- Prof. Scott Matthews, Carnegie Mellon U.

- Acknowledgments

## Questions? Comments.

## Slide 22

## Linking Methodology

- Linking Methodology

- _Captures Biregional Feedbacks:_
- Demand Canada 
-   Production Canada &
- 	Demand U.S. Imports Production U.S.
-  Demand Can Imports  Production Canada
- 	....etc.

## Integration of Conventional LCA data into EIO-LCA 

**EIO-LCA**

## Integration of EIO-LCA data into conventional LCA 

**Conventional LCA**

**EIO-LCA**

## Economic Input-Output (IO) analysis

- Uses IO tables to quantify interrelationships between industrial sectors in an economy (Leontief, 1941)
- Systems of National Accounts (SNA)

**Interindustry Demand**
**Z**

**Outputs**

**Inputs**

**Total Output, Xi = Zij + Yi**

**Value Added**

**Final Demand**
**Y**

## Extends IO analysis to account for direct and indirect environmental effects in an economy

Environmental effects are considered in a satellite account of impact coefficients (pollutant / 1$ sector output)

- Environmental effects are considered in a satellite account of impact coefficients (pollutant / 1$ sector output)

**Leontief**
**Inverse**

- Environmental IO analysis

**Chg. in Final **
**Demand**

**Env. Coefficients**

**Total**
**“****Impacts”**

**Y**

**(I-A)****-1**

**P**

**E**

- {

**‘****n’ sectors**

- X

- X

- =

- {

**‘****k’ **
**“****impacts”**

**∆****X = Change in economic output by sector**

**A****ij**** = Z****ij**** / X****j**