Friends of the Lubicon
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March 12, 2008
Details regarding how green house emissions from the Alberta tar sands are to be handled in Canada have started to dribble out and one thing is clear. While Canadian politicians are openly worried about threats that people might refuse to buy tar sands oil because it's production contributes so significantly to global warming -- and together with their oil company cronies are trying to counter that potential threat with a typical Canadian public relations campaign -- neither level of Canadian government is talking seriously about reducing overall green house gas emissions at least during the term of office of the current crop of Canadian politicians.
The Alberta government is talking about making carbon sequestration "widely possible by 2015" -- whatever that means -- by which time the current rate of production of tar sands oil will have tripled to an estimated 3 million barrels a day. Green house gas emissions from production of tar sands oil between now and 2015 will of course also increase significantly.
The province intends to variously encourage the oil companies to reduce the amount of green house gas emissions generated per barrel of tar sands oil starting in 2020. However the provincial "climate change" plan contemplates that the amount of green house gas emissions being put into the atmosphere will actually continue to increase -- not decrease -- for an unspecified number of years after 2020.
The eventual provincial "target" is to reduce green house emissions being put into the atmosphere to 14 per cent below 2005 levels by 2050. However achieving that goal merely through encouraging the oil companies to reduce the amount of green house gas emissions generated per barrel of oil is unimaginable unless the rate of production of tar sands oil decreases or at least levels off at the anticipated 2015 rate of 3 million barrels a day -- something that isn't likely unless the market for abundant tar sands oil dries up or production of tar sands oil is somehow constrained. (It is estimated that tar sands oil will last for 400 years at a production rate of 3 million barrels a day and the oil companies -- who know how to talk convincingly to provincial politicians -- don't have a history of self-restraint when lots more money can be made simply by continuing to increase production.)
The target of the federal government's "tough new green plan" is to reduce green house gas emissions to 20 per cent below 2006 levels by 2020. However it doesn't require companies to actually do anything before 2018 -- 10 years hence and only 2 years before the federal target date of 2020. Moreover it doesn't require tar sands facilities built before 2012 to capture and store green house gases -- only to pursue the same kind of per barrel "intensity targets" found in the provincial plan. In other words, under the federal government's "tough new green plan", tar sands facilities built before 2012 can keep putting more and more green house gases into the atmosphere through increased production just as long as they can somehow claim that they are reducing the amount of green house gas generated per barrel of production.
Conveniently a large number of oil companies are known to be in the midst of a huge tar sands expansion program with many of the contemplated projects slated for completion by 2012 -- something their federal government brethren undoubtedly knew when they set the 2012 cut off date.
Included below are a few articles talking about the latest federal government green scheme along with provincial and industry reaction to it.
By Jeremy Loome, Legislature Bureau
The Edmonton Sun
March 11, 2008
Alberta won't be pressured by the federal government into accepting unreasonable deadlines for reducing greenhouse gases, Premier Ed Stelmach said yesterday.
Speaking after his address to the World Heavy Oil Congress at the Shaw Conference Centre, Stelmach said federal suggestions that Stephen Harper's Conservative government might force the mandatory isolation and storage of carbon gases in the near-term - known as carbon capture sequestration - might infringe on Alberta's constitutional rights.
Alberta's existing plan calls for carbon sequestration to be widely possible by 2015 and for reductions in the intensity of emissions - if not the actual volume - to begin in 2020.
"We're not going to prejudge where the federal government is coming from," Stelmach said yesterday.
"But my job, my responsibility is to stand up for Albertans, and I will.
"We'll do our part, but we want to make sure that every other province is doing their part as well."
The federal plan, according to reports, comes after discussing the issue at length with Alberta, which is the nation's largest greenhouse gas producer, due to the oil and gas industry.
But the likely sticking point between the two sides could be timing: while Alberta has pledged a 14% greenhouse gas reduction from 2005 levels by 2050, the federal government has promised a 20% reduction of 2006 levels by 2020.
Federal Environment Minister John Baird has suggested that target can't be met unless companies are legally compelled to use carbon capture sequestration, a still-developing technology in limited use.
"When I had a brief conversation with the prime minister, our goals and their goals were within the same few years ... weren't that really different," said Stelmach.
Any decision to impose strict sequestration rules on Alberta industries would require federal financial aid, said Stelmach.
Gordon Jaremko and Jason Markusoff
The Edmonton Journal
Tuesday, March 11
EDMONTON - Oil-industry leaders called Monday for a national consumer carbon tax to help pay to build massive new greenhouse gas storage systems.
The proposal came on the day the federal government announced regulations requiring all oilsands and coal-power plants built from 2012 onwards to be ready to trap greenhouse gas emissions.
Industry leaders criticized the federal government for moving too quickly, and called instead for a levy that would put the burden of cleaning up the environment where they say it belongs, on fossil-fuel users who cause the most emissions.
Our industry is prepared to do its share," Nexen Energy president Charlie Fischer said at the 2008 World Heavy Oil Congress in Edmonton.
Only 30 per cent of carbon-dioxide emissions from oilsands production originates in Alberta with companies that mine bitumen and upgrade it into synthetic light oil ready for conversion into fuels, Fischer said.
Refineries put another 15 per cent of the greenhouse gases into the atmosphere, he estimated, citing consultant studies commissioned by Nexen, a growing oilsands developer.
Fuel users account for 55 per cent of the emissions widely blamed for global warming, Fischer said.
A new carbon tax would encourage more efficient driving and generate money to build industrial greenhouse gas collection and storage facilities, Fischer said.
Suncor Energy president Rick George stopped short of calling for consumer taxation, but said industry can't pay the entire cost for cutting greenhouse gas emissions.
"Everybody's got a piece of this," said George, whose firm leads an industry consortium proposing a multibillion-dollar network to collect and store carbon dioxide.
Despite some threatening language from Premier Ed Stelmach, the Alberta government said the new federal regulations go hand in hand with the provincial climate-change strategy.
A carbon-capture industry group, the Integrated Carbon Dioxide Network, released a consultant's report that estimated the capture and underground storage process would cost more than $60 per tonne of emissions, though some of that could be recouped by injecting the greenhouse gas into old oil wells to extract hard-to-reach deposits.
Enbridge president Pat Daniel estimated that collecting, transporting and storing carbon-dioxide will cost $80 to $100 per tonne.
The added costs associated with the federal government plan aren't likely to be enough to force cancellation of any oilsands projects, Daniel said.
The expense of carbon capture and storage would work out to one to two cents per litre of refined fuels, he said.
Daniel urged enactment of "some form of carbon tax" because cleanup costs should be paid by all who contribute to environmental problems, he said.
Ottawa's new target is "clearly extremely ambitious," said Pierre Alvarez, president of the Canadian Association of Petroleum Producers.
A task force appointed by Stelmach and Prime Minister Stephen Harper called last month for the immediate creation of a $2-billion government fund to kick-start construction of carbon storage networks.
Shawn Mccarthy And Bill Curry
Globe and Mail
March 10, 2008
OTTAWA — Alberta Premier Ed Stelmach yesterday gave a passing grade to Ottawa's new plan to impose stricter emission limits on coal-fired electricity and oil sands projects, leading critics to question just how aggressive the plan actually is.
Environment Minister John Baird released proposed regulations that target Alberta's coal-based electricity system and its booming oil sands development, saying both industries will have to slash greenhouse gas emissions for projects that become operational after 2011.
Mr. Baird warned that U.S. governments – both federal and state levels – are increasingly concerned about buying fuel produced from the oil sands because of its contribution to climate change.
The minister noted that U.S. President George W. Bush recently signed legislation that could prevent the U.S. government and the Defence Department from buying from the oil sands, while states like California are making similar threats.
"The bottom line is the oil sands is an important national resource but we've got to expand it in an environmentally friendly way," he said.
The cornerstone of the federal announcement was a new emphasis on carbon capture and storage technology, in which major industries capture carbon dioxide exhaust and store it underground.
Mr. Baird said all new coal-fired power plants and oil sands projects that come on stream in 2012 or later must virtually eliminate emissions through carbon capture and storage or a combination of other abatement technology and carbon credits by 2018.
"We hope to have in place a mass-scale carbon capture and storage system before – well before – 2020," he told reporters in Ottawa yesterday. "We think it's tremendously important."
In Edmonton, Mr. Stelmach said he was pleased that Ottawa was "following Alberta's lead" on regulating greenhouse gas emissions, saying there was ample flexibility in the approach and deadlines.
The Alberta Premier – who has been widely criticized for setting unaggressive emission targets – said he remained concerned that the federal plan could negatively affect the oil and gas sector.
Liberal environment critic David McGuinty said Mr. Stelmach's endorsement spoke volumes about the plan, which the Harper government has portrayed as a get-tough approach. "From a Canadian common sense perspective, people would go: ‘Wait a second here. The jurisdiction with the most to lose is seizing upon this announcement and saying it's all good? Something's not right here,' " he said.
As crude oil prices were topping a record $108 (U.S.) a barrel yesterday, the Liberal MP said existing oil sands operations should not be exempt from the plan.
Most environmentalists panned the announcement, saying loopholes make the targets less aggressive than they sound.
"Canada's ambition is a very, very long way from the message that is coming clearly from the scientific climate community about what needs to be done," said Matthew Bramley, a researcher at the Calgary-based Pembina Institute, a non-profit environmental think tank.
He said the target of reducing greenhouse gas emissions to 20 per cent below 2006 levels by 2020 is significantly above the level of the Kyoto Protocol, under which the former Liberal government committed to reducing emissions to 6 per cent below 1990 levels by 2012.
Mr. Bramley noted that British Columbia has prohibited the construction of new coal-fired power plants, while the federal plan allows them until 2012, and even then, gives utilities another six years to implement emission-reduction plans.
He added that oil companies are in the midst of a massive development, and many of the projects are slated to be completed before 2012. Those will face only modest emission targets, he said.
Stephen Hazell, the executive director of the Sierra Club of Canada, praised yesterday's announcement for setting an "ambitious" timeline for adopting new technology. Mr. Hazell said the plan is an improvement over the version released last year, which simply required new facilities to improve their emissions per barrel of oil by 2 per cent a year.
"It's good that it looks like they are going to demand that tar sands operations drastically reduce their greenhouse gases," he said. "Under the previous framework, the oil sands industry was totally off the hook."
Oil industry executives supported in principle the adoption of carbon capture and storage, and many companies are designing their plants to accommodate the technology. But Charlie Fisher, chief executive of Nexen Inc., said government money will be required.
Stephen Kaufman, a Suncor Energy Inc. executive who chaired an industry task force on carbon capture, said the federal plan would impose an undue burden on the industry.
"We think it is quite important for companies to have the flexibility to choose the technology that is right for them, and keeps them competitive on an international basis," Mr. Kaufman said.
Don Lowry, chief executive of Edmonton-based EPCOR Utilities Ltd., said his company is keen to proceed with carbon capture technology, but he questioned whether Alberta electricity users will support the enormous cost.
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