Category Archives: Oil sands

Posts relating to the oil sands

Two things Canada’s oil industry needs to understand

First — any expectation that ‘business as usual’ in the sense of rapid growth in production will return is ill-founded. Most importantly, this is because an effective global transition to low-carbon energy requires countries like Canada to stop investing in new fossil fuel infrastructure as well as to develop serious plans to phase out fossil fuel production that already exists. Combined with volatile fossil fuel prices, the very high per-barrel cost of production in the bitumen sands, and the heavy environmental impact there is no reason to expect a return to the rapid growth projections which were once do dominant in Canada.

Second — the fact that any political jurisdiction happens to own coal, oil, and gas doesn’t grant a right to exploit these resources regardless of the impact on others. Based on what we have learned about the harm caused by climate change, it’s ethically and politically imperative that the arbitrary use of the atmosphere as a dumping ground for carbon pollution comes to an end.

By all means we should be providing support to individuals and communities that want to transition away from the fossil fuel industry. What we need to collectively reject is the idea that any jurisdiction has the right to impose climate change on the rest of the world and future generations. People deserve support in transitioning away from fossil fuel dependence, but there is every reason for Canada as a whole to reject new fossil fuel export infrastructure, particularly bitumen sands pipelines and coal ports.

Why divest from fossil fuels?

Campaigns at universities especially can benefit from this document, prepared for the University of Toronto:

The Fossil Fuel Industry and the Case for Divestment: Update, by

Contributors to original brief: Milan Ilnyckyj, Emily Barrette, Stuart Basden, Tim Berk, Tamara Brown- stone, Mie Inouye, Neal Lantela, Amy Luo, Monica Resendes, Jessica Vogt, Miriam Wilson, Cameron Woloshyn, and Jon Yazer

Contributors to update: Milan Ilnyckyj, Anne Ahrens-Embleton, Jacqueline Allain, Lila Asher, Jody Chan, Ben Donato-Woodger, Joanna Dowdell, Rosemary Frei, Graham Henry, Katie Krelove, Amanda Lewis, Ariel Martz-Oberlander, and Monica Resendes

Canada should phase-out fossil fuel exports

There are a few scientific facts about the world that are vital and increasingly well understood. Foremost among them is the reality that human beings have already put a dangerous amount of greenhouse gas pollution into the atmosphere. Nonetheless, the world as a whole continues to demonstrate a ferocious appetite for fossil fuels. Burning those fuels will inevitably contribute still more to climate change, turning a dangerous situation into a potentially catastrophic one.

In order to avert the worst-case outcomes, humanity as a whole needs to work toward keeping most of the planet’s remaining fossil fuels underground, while achieving a global transition to a low- and ultimately zero-carbon economy.

In a world where states, companies, and individuals behaved rationally, we would already be working aggressively to phase-out fossil fuels. As it is, nothing like the necessary level of effort is being made. In an ideal world, Canada would be finding itself with fewer and fewer willing buyers of coal, oil, and gas; as it is, we should choose to restrain production and exports unilaterally.

Right now, Canada is helping to feed the fossil fuel addiction of the United States. Under the current Conservative government, we also aspire to help feed the addictions of China and others. If the world is to avoid catastrophe, those addictions must be curbed. By voluntarily reducing our exports of fossil fuels, Canada can play a disproportionate role in driving that necessary transition.

Canada may not have much population or total wealth when compared to giant states like China and the United States, but we do have vast reserves of coal, oil, and gas. When we export those fuels, we help keep the world on an economic development pathway that is tightly linked to fossil fuel use, and in which well over 2ËšC of climate change will eventually occur.

Catastrophic global climate change would serve the interests of nobody, but states are not thinking ahead and responding appropriately to the dangers we face. Within that context, Canada has the choice between continuing to be an enabler of unethical and destructive fossil fuel use or voluntarily restricting fossil fuel production and export. Hopefully, Canada will eventually find itself in a situation where nobody wants to buy these dangerous fuels, and where the world as a whole recognizes the value of keeping them underground. In order to help drive the emergence of such a world, the best thing Canada can do is to stop fueling the fossil fuel addictions of other countries, while also working to decarbonize our domestic economy.

Intensity-based targets for the oil sands are inadequate

There has been a bit of talk in the media about adopting federal intensity-based greenhouse gas pollution standards for the oil sands:

“The federal government is using Alberta’s greenhouse-gas emissions target – criticized as too accommodating to industry – as the launching point for a national oil and gas carbon policy, even as the province itself looks to toughen those standards.

Alberta today requires large energy companies to achieve a 12-per-cent reduction in emissions, on a per-barrel ‘intensity’ basis that allows overall emissions to still climb dramatically.

That 12-per-cent standard “is part of the conversation, for sure” as the federal government seeks to write its rules, Environment Minister Peter Kent said in an interview Friday.”

The idea is to drive firms to reduce how much greenhouse gas pollution they produce in the course of producing each barrel of synthetic crude oil – not to restrict how much pollution they produce in total. Under an intensity-based plan, total emissions can continue to grow, particularly given how our measuring system ignores the biggest source of pollution associated with the oil sands.

Intensity-based targets ignore the main source of pollution associated with the oil sands: the actual barrels of synthetic crude that the oil sands industry exists to produce. Inescapably, when those barrels are burned, the carbon they contain will be added to the already-dangerously-large stock of carbon dioxide in the atmosphere.

We need a plan to wind down the oil sands as a whole as part of a fair global transition to a carbon neutral economy. We certainly don’t need a regulatory regime that permits continued growth in oil sands output.

Why ‘ethical oil’ may be an own goal

Don’t tell him, but I think Ezra Levant’s whole ‘ethical oil’ concept might be a psychological own goal for the people trying to promote the unrestricted growth of Canada’s oil sands.

The intent of the campaign is to draw attention to ethical abuses connected to oil from sources outside Canada. For instance, the lack of rights for women in Saudi Arabia. For people who are already convinced that Canadian oil is A-OK, the contrast between the appeal of buying oil from ‘good’ Canadian companies rather than ‘bad’ foreign companies or governments seems stark.

The reason why I think the slogan may be self-defeating is that by trying to draw attention away from arguments that Canadian oil is itself unethical, it reinforces the point that the choices we make about energy are ethical choices, not mere consumer choices. If you have come to accept buying fossil fuel as a perfectly ordinary part of life, with no more thought accorded to it than to buying a pack of gum or a bus token, seeing a blaring campaign about how Canada’s oil is ethical while oil from elsewhere is not may bring to mind the very arguments that the campaign is seeking to discredit.

Plenty of people are aware of how problematic our society’s dependence on oil is. They are also aware of the dubious business dealings and environmental damage associated with all oil companies, including those in Canada’s oil sands. Oil companies are bad neighbours. When operating normally, they produce air and water pollution that saturates the world with toxic and cancer-causing chemicals. When something goes wrong, they cause catastrophic accidents that end human lives and spoil large areas of nature. Their operations and product are also inescapably linked with climate change. They profit while the people downstream and downwind suffer.

Reminding people that oil is an ethical issue may end up encouraging those with a balanced view to make less use of it and search more energetically for alternatives. To put it briefly, the oil industry loses when oil gets discussed as an ethical matter; for them, it is much better when people see oil amorally as an essential enabler for things they value doing like driving cars and flying in airplanes.

One side note about ‘ethical oil’ – one of their standard photo ops is to get a couple of women to wear black body-covering garments in the style of a burqa in front of environmental protests. The people being photographed often have a sign suggesting that OPEC is pleased by environmental protests, since they restrict hydrocarbon development in North America and keep the continent dependent on imports. On one level, these protests seem like fair comment on the oppressive government policies in some major oil-producing states. At the same time, it seems possible that the intention behind the protest is to take advantage of xenophobic or anti-Muslim sentiment. Appealing to the moral sentiment that women should not be subjugated by their governments is one thing, but using Islamophobia to try to discredit your opponents is much less morally upright.

Peak oil is unlikely to solve the climate crisis

An interesting report released by Leonardo Maugeri (PDF) at Harvard’s Belfer Center argues that the world still has huge amounts of unconventional oil and that recent concerns about ‘peak oil’ are ill-founded:

“My field-by-field analysis suggests that worldwide, an additional unrestricted supply of slightly less than 50 mbd is under development or will be developed by 2020. Eleven countries show a potential outflow of new production of about 40.5 mbd, or about 80 percent of the total. After adjusting the world’s additional unrestricted production for taking into account risk-factors, the additional adjusted supply comes to 28.6 mbd , or 22.5 mbd for the first eleven countries – as shown in Figure 3 (more extensive data are shown in Table 3, Section 4).

These numbers carry at least two important messages:

* They represent the largest potential addition to the world’s oil supply capacity since the 1980s.

* They point to a tectonic shift in the oil geography and geopolitics, by making the Western Hemisphere the fastest growing oil-producing region in the world, with the United States and Canada combined outpacing any other country.

This suggests that the hopes of some environmentalists that there might not be enough oil available to cause catastrophic or runaway climate change may not be realized. Of course, even if oil were scarce, there is a lot of planet-altering gas and coal left in the world.

Maugeri concludes that in the medium term, substantially more oil production is possible:

“In any case, the single most important issue that emerges from my analysis is that, from a purely physical and technical point of view, oil supply and capacity are not in any danger. On the contrary, they could significantly exceed world consumption needs and even lead to a phase of oil overproduction if oil demand does not exceed a compounded rate of growth of 1.6 percent each year to 2020.”

He identifies Iraq, the United States, and Canada as the countries most capable of increasing their oil output during that timespan.

Maugeri also highlights the long investment lag-times and asymmetries that exist in the fossil fuel sector:

“The industry tends to increase investment gradually as the price of crude oil increases, but once the new investments are started, they are very difficult to stop, even when consumption and crude oil prices suddenly collapse. In other words, the industry behaves like an elephant running: it starts very slowly, but once it gets going, no one can stop it.

In fact, as an oil company gradually spends its budget, the investment assumes a life of its own, and it becomes unprofitable to block the spending, especially when hundreds of millions of dollars have already been spent. The need to obtain an economic return on capital already invested takes priority over almost any other consideration, unless there are dramatic changes in the market situation.

To complicate matters, contractual commitments are made by the oil companies with the countries owning the deposits, which often make it difficult to block or reduce the spending. Indeed, these commitments demand heavy economic penalties or even revocation of the concessions granted by the host government if, by pre-established dates, the agreed number of wells and the needed infrastructure are not realized, and initial production is not achieved.”

Once companies make the gigantic investments necessary to access these unconventional oil reserves, it is unreasonable to think that they will be willing to stop exploiting them in the future, or that politicians will be willing to force them to accept such losses. Arguably, the only way to stop an unconventional fossil fuel bonanza that wrecks the climate is to keep it from ever starting.

George Monbiot has also written a column about Maugeri’s report.

NRTEE report on climate policy

The National Round Table on Energy and the Environment has released a new report on Canada’s climate change policy:

Reality Check: The State of Climate Progress in Canada

In their summary of the report, they explain:

Despite making progress in reducing greenhouse gas emissions, Canada is not on track to achieve the federal government’s 2020 reduction target of 17% below 2005 levels. Canada will not achieve its 2020 GHG emission reductions target unless significant new, additional measures are taken. More will have to be done. No other conclusion is possible.

Reality Check: The State of Climate Progress in Canada was undertaken last year at the request of the federal Minister of the Environment to inform the government’s regulatory approach to reducing emissions. NRT’s research is based on original modelling using Environment Canada’s data as a principal source, as well as extensive consultations with the provinces and territories, academic and public policy experts.

The report serves as a reality check on the state of climate progress in Canada today. It reinforces some key truths about climate policy in Canada: that a national target needs a concerted national policy behind it, that policy uncertainty still exists and stifles progress, that the country has yet to implement effective policies to address some large sources of emissions, and that all this means progress has been and will remain difficult and uneven across the country.

It is worth noting that NRTEE will be eliminated if the budget implementation act (C-38) becomes law. The bill is currently under consideration by Parliament.

Government interference in the Northern Gateway pipeline review process

Both the public statements and the actions of Canada’s federal government have served to undermine the independence and integrity of the ongoing review of the proposed Northern Gateway pipeline.

Neither government ministers nor the prime minister have been shy about asserting that the pipeline is to be built regardless of the concerns of local residents and aboriginal groups and regardless of how it would put their climate change targets even further out of reach.

The implementation bill for the latest federal budget would also give cabinet the authority to overrule the National Energy Board and build the pipeline regardless of what they decide.

In the short term, these government actions may seem to improve the odds that the pipeline will be built. One significant consideration, however, is how the courts will respond to this bullying. In the event that aboriginal opposition to the pipeline is ignored by the government, it seems virtually certain that First Nations groups will go to the court to seek an order to block construction. The more the government undermines the legitimacy of the environmental assessment process, the more likely it is that judges will rule that the government has behaved improperly and the higher the odds the pipeline will be blocked by judicial means.

The oil sands can’t be sustainable

Disturbingly often, Canadian politicians describe how they intend to develop the oil sands “sustainably”.

Whenever they do this, they demonstrate that they don’t especially care if they are expressing themselves in a sensible way or describing a cogent idea. It’s just a rhetorical way to try and respond to the concerns of environmentalists without actually questioning the logic of developing fossil fuels.

Climate scientist Gavin A. Schmidt expressed the fundamental issue very clearly:

“If you ask a scientist how much more CO2 do you think we should add to the atmosphere, the answer is going to be none. All the rest is economics.”

The long-term processes that remove CO2 from the atmosphere take much longer than a single human lifetime to operate. That means that a big chunk of the CO2 generated when we burn fuels from the oil sands sticks around in the atmosphere for a longer span of time than most politicians ever even consider. There is already a dangerous amount of CO2 in the atmosphere, so no activity that adds more can be said to be ‘sustainable’. We need to be using the world’s existing fossil fuel infrastructure as a way to build a post-fossil-fuel world, rather than simply persisting in the heedless production of hydrocarbons.

British journalist George Monbiot expresses this well in his criticism of Ed Davey’s proposed energy bill:

“Davey’s “transitional” technologies, gas and coal (which are transitional in the sense that chocolate fudge cake is a transition to a low calorie diet), will knacker his supposed long-term goals many years before the “short term” comes to an end.”

Asking how the oil sands can be developed ‘sustainably’ is like a person who is already overwhelmed with debt asking how many more credit-card-funded shopping sprees will be ‘sustainable’. Fossil fuel use is the problem we need to overcome, not a pathway to overcoming it. So, when politicians talk about sustainable oil sands development, they are talking nonsense.