Plea for visionary

Canadian government urged to lead way in tackling greenhouse gas emissions

Gary Park

For Petroleum News

The Canadian government should take the lead role in crafting an energy vision that integrates the social, economic, environmental and energy goals shared by Canadians that promote energy development while reducing greenhouse gas emissions, says the Conference Board of Canada.

In a new report entitled “Canada’s Energy Future — An Integrated Path,” the not-for-profit research agency agreed in particular with those who see the rapid growth of Alberta’s oil sands coming into conflict with the pressure to reduce carbon emissions.

Oil sands development, which involves 51 projects costing C$96.6 billion at various stages, has “implications for the environment that are more significant than the conventional hydrocarbon development of the past,” the board said.

Along with realizing the continued economic benefits of energy sector growth, Canadians must consider the environmental implications of their energy and industrial priorities, it said.

“Current policy has led to a strong energy industry that has contributed to national prosperity, but the policy was developed within the context of unconstrained GHG-emissions,” the report said.

“As we come to terms with a lower emissions future, our competitiveness will depend on a comprehensive strategy, collaboration among governments, investments in low-carbon-emission technologies, an attractive investment climate and, perhaps most importantly, an integrated policy vision that reflects energy and environmental imperatives.”

Provincial governments need to be onboard

“A clear vision, specific strategies and measurable outcomes will ensure continued progress towards the clean energy superpower status that Canada seeks,” the report said.

The 60-page report was based on a detailed examination over 18 months of energy legislation, policies and plans, along with observations from 25 companies, organizations and governments active in the energy industry.

It covered crude oil and natural gas, natural gas liquids, coal and uranium, hydroelectricity and wind-generated power, but paid especially close attention to the water consumed by the oil sands sector and its “significant environmental footprint.”

The board said Canada has yet to deal with the apparent contradictions between exploitation of the oil sands and the concerns about rising GHG emissions, which leads “many Canadians to believe that these forces push in opposition directions.”

But progress has been slow towards integrating energy and environmental policies and Canadian governments have yet to find a consensus.

Report urges new technology development

It also called for caps on GHG emissions and trade mechanisms to reduce the environmental impact of the oil sands.

One of the board’s most immediate concerns is that Canada is lagging behind other world governments in charting courses to lower GHG emissions, while Canada’s emissions continue to rise.

It said three imperatives must be met to secure a prosperous, long-term energy future:

• Transforming Canada’s energy system to contribute to a sustainable and lower-carbon-emitting future economy;

• Collaboration by all levels of government to integrate energy and environmental policy matters; and

• Attracting capital investment to facilitate energy developments.

The board said substantial efforts are under way on all three categories, but “the real work and difficult choices are fast upon us,” including changing weather and climate patterns and melting polar icecaps.

Carbon dioxide chief GHG target

In fact, it relied on an International Energy Agency projection that oil will be the main energy source to feed a projected global energy consumption increase of 71 percent between 2006 and 2030.

As models of what can be accomplished in setting fresh courses, the board said the United Kingdom government is among the leaders in linking energy policy directly to reducing GHG emissions, thus establishing the base for a sustainable future economy.

It also credited the European Union for establishing a long-term energy plan that positions Europe to be globally competitive in a low-carbon-emitting future.

Board: signs U.S. ‘becoming fully engaged’

States and municipalities “are pursuing aggressive policies to reduce emissions in absolute terms (as opposed to the reduced intensity targets underpinning short-term Canadian policy),” the board said.

Some of those actions “will place constraints on energy suppliers that wish to sell into specific (U.S.) markets,” specifically California and several northeastern states, the study warned.

With more than half of Canada’s natural gas and crude oil production being exported to U.S. markets, there is an incentive for Canada to take actions to preserve market access.

However, “collaborative industry efforts to achieve substantial GHG reductions independent of government initiatives are lagging.

“Individual companies have been diligently investing in carbon-reducing initiatives, but we have yet to see the scale of collaborative private sector actions as have taken wing in the U.S.,” the board said.

“It is time to view GHG reduction as an opportunity rather than a burden.”

Canada offers climate change strategy

Speaking in advance of the Group of Eight economic summit, he said that when his Conservative government took office at the start of 2006, Canada’s GHG emissions were 33 percent above the Kyoto target signed in 1997.

Meeting those targets would have been impossible “without crippling our economy.”

Instead Canada has turned to a strategy of intensity-based reductions on GHGs, forcing companies to cut emissions for each unit of production (a barrel of oil or thousand cubic feet of gas), without imposing absolute reductions that made no allowance for rising output, he said.

“There are elements of our plan that we believe could work not just for Canada, but for many countries in the world — including some of the large emitters that did not accept targets under the Kyoto protocol,” Harper said.

“It is urgent that we start work to develop a new universal consensus on how to prevent global warming,” he said.

Harper: reduction targets needed

“Of course, it may not be possible for all countries, or all industries and firms within all countries, to reduce their emissions by the same amount on the same time line,” he said.

The Canadian plan is forecast to lower GHGs by 20 percent from 2006 levels by 2020, but many European countries are already well ahead of the Kyoto goals, with Germany lowering its emissions by 18.4 percent as of 2004.

European nations are calling for a global reduction of 50 percent below 1990 levels and a new protocol to be administered under the United Nations.

The United States has proposed a meeting by the end of 2008 of major polluting companies to plan ways to bring down GHGs.

The extent of the challenge facing Canada is contained in Environment Canada’s latest numbers which show GHGs climbed from 677 million metric tons in 1997 to 747 million metric tons in 2004 and 2005.

To comply with Kyoto between 2008 and 2012 would require a dramatic decrease in GHGs to 563 million metric tons.

—Gary Park