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

1. Monetisation of fossil resource depletion by
assessing the surplus cost T.C. Ponsioen1, M.D.M. Vieira1, and M.J. Goedkoop1. E-mail contact: ponsioen@pre-sustainability.com
1 PRé Consultants BV, Printerweg 18, NL-3821 AD Amersfoort, The Netherlands
1. Introduction
Depletion of fossil resources has a large impact on our energy intensive lifestyles. In life
cycle impact assessment (LCIA), indicators for pollution-related impacts are relatively
well established. For resource depletion, however, there is still little agreement on the
impact pathway approach [1]. The different types of LCIA methods that have been
developed for fossil resource use, each describe different effects [2]. Some methods
describe the future consequences of resource extraction, based on the concept that
extracting easily found resources now means that in the future (lower value) resources
need to be extracted under more challenging conditions and with alternative
technologies. The additional efforts that are required can be described by higher energy
requirements or additional costs, which have an increased effect on the environment
and economy [3] [4].
We propose a method to assess future consequences of fossil resource extraction by
monetisation. The method is based on surplus cost, as first applied by the ReCiPe
method [4]. This study intends to improve the method by using new data and insights.
2. Materials and methods
The environmental mechanism of the indicators in the method here proposed is
illustrated 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 caused
by depletion of fossil resources that are extracted using the lowest cost production
technique and/or geographical distribution. For example, when all conventional oil is
depleted, alternative techniques, such as enhanced oil recovery or deep water
extraction, will be applied. The marginal cost increase (MCI) is the cost of the additional
inputs needed to produce another unit of the resource. The MCI was calculated for
crude oil, natural gas and coal separately, based on data from the International Energy
Agency [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 of
one 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 also
chose different fixed discount rates for those perspectives (individualist 0%, hierarchist
3% 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 and
surplus cost is calculated for three perspectives – individualist, hierarchist and
egalitarian – as a damage indicator.
• When expressing the characterisation factors per gigajoule, the impacts are highest
for crude oil and lowest for coal.
• In absolute terms, the impacts at endpoint level are highest in the egalitarian and
lowest in the individualist perspective.
• The MCI ratios between the different fossil resources are similar to the ratios of the
surplus cost in the individualist and hierarchist perspectives.
• The depletion of other resources, such as minerals, can be modelled in a similar way
to calculate comparable characterisation factors.
References
[1] EC-JRC-IES. 2011. International Reference Life Cycle Data System (ILCD) Handbook - Recommendations for Life Cycle
Impact Assessment in the European context. First edition November 2011. European Commission-Joint Research Centre -
Institute for Environment and Sustainability. Luxemburg. lct.jrc.ec.europa.eu/pdf-directory/Recommendation-of-methods-
for-LCIA-def.pdf.
[2] Steen, BA. 2006. Abiotic Resource Depletion Different perceptions of the problem with mineral deposits. International
Journal 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, De
Schryver, A, Struijs, J, Van Zelm, R. 2009. ReCiPe 2008 A life cycle impact assessment method which comprises harmonised
category 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 be
released 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 on
environment; ENV.2009.3.3.2.1: LC-IMPACT - Improved Life Cycle Impact Assessment methods (LCIA) for better
sustainability assessment of technologies, grant agreement number 243827.
0
10
20
30
40
50
60
70
80
90
100
0 1000 2000 3000 4000 5000
Productioncost(2008USDperbarrel)
Cumulative production (billion barrels)
Oil shales
Heavy oil bitumen
Arctic
All deep water
Other EOR
CO2 EOR
Other conv. oil
MENA conv. oil
Figure 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 Egalitarian
Crude oil 0,72 2,9 14,1
Natural gas 0,25 1,5 6,7
Coal 0,0043 0,033 3
0
2
4
6
8
10
12
14
16
Surpluscost(US$perGJ)
Figure 3. Average and standard deviation of the surplus cost in US$ per GJ fossil fuel for different
perspectives using fossil fuel production
3. Results and discussion
The characterisation factors derived show that the ratios between the indicators of the
different types of fossil resources (crude oil : natural gas : coal) are rather constant in
most cases, only in the egalitarian perspective the ratio deviates because only there
zero discounting is applied (individualist 100:39:0.7; hierarchist 100:54:1.1; egalitarian
100:47:21) (Figure 3). The MCI gives a similar ratio (100:48:1.0); so, in general, the MCI
gives a good indication of the impact indicator. However, there are large differences
between the surplus cost characterisation factors for each perspective in cost per
gigajoule (egalitarian > hierarchist > individualist). From Monte Carlo simulations, we
found that data uncertainty is rather low. However, the results are extremely sensitive
to the assumed discount rate.
Marginal cost increase of crude oil
(US$/GJ)
Crude oil use
Future production of crude oil
Surplus cost (US$)
Production
technique/
location
Crude oil demand
Population growth
Economic growth
Substitution
Technological
development
Reduced availability at current cost
Figure 1: The environmental mechanism of the surplus cost indicator for crude oil