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Sands top enviro hit list International environmentalists, think tanks put Alberta oil sands in cross-hairs Gary Park For Petroleum News
At the same time the Alberta oil sands are gaining attention from global investors they are also becoming a target for international environmental groups troubled by the consequences of developing what is called “bottom-of-the-barrel” energy.
The latest to join the clamor against Public Enemy No. 1 on Canada’s list of greenhouse gas producers is the Natural Resources Defense Council, one of the most influential environmental groups in the United States, which is urging Washington to pass laws discouraging the use of subsidies and other incentives to exploit oil sands, oil shale and liquid coal — all of them generating disproportionate quantities of GHGs.
Compounding the uncertainty for the oil sands are memorandums of understanding signed earlier in June by California Gov. Arnold Schwarzenegger and the governments of Ontario and British Columbia, in which the two Canadian provinces agreed to adopt California’s low carbon fuel standards for transportation fuels.
That will require Ontario refiners, importers and blenders of passenger vehicle fuels to reduce carbon emissions from their fuels by 10 percent by 2020.
For Ontario, the first step will be to open negotiations with the Canadian Association of Petroleum Producers and the companies that operate refineries in Ontario — Imperial Oil, Shell, Suncor Energy and Nova Chemicals — to develop a strategy to meet the goals.
Ontario imports about one-third of its crude — which totals about 370,000 barrels per day — from eastern Canada, the British North Sea or Norway and the rest from Western Canada and the U.S.
British Columbia has two small refineries — a 52,000 bpd plant operated by Chevron in the Greater Vancouver area and a 12,000 bpd facility owned by Husky Energy at Prince George in the province’s northeast.
In the meantime, industry leaders are trying to get a fix on the implications of the memorandums, but a preliminary assessment suggests that crude from the oil sands could be ruled out altogether because they generate triple the GHGs of conventional oil.
However, a spokesman for Ontario Premier Dalton McGuinty said that is far from certain, given the difficulties of linking GHGs to the oil sands and the advances that are possible in lowering the carbon content of oil sands production.
Oil sands target of environmentalists Even so, the giant oil sands resource has moved to the forefront of worldwide targeting by environmentalists.
Greenpeace, the World Wildlife Fund and the Sierra Legal Defense Fund are all either in the process of, or planning to set up offices in the Alberta capital of Edmonton to intensify their lobbying against the rapid expansion taking place in the province’s northern region.
Adding to the mix, Deutsche Bank and the United Kingdom-based Tyndall Center for Climate Change Research have scorned the Canadian government’s climate change plan that will allow emissions to grow for at least another 40 years.
The Sierra group, which provides backing for those taking their environmental battles to court, has just filed a legal challenge against Imperial’s possible C$10 billion Kearl project.
It candidly places the oil sands at the top of its list of its “major fights” for the next five years.
Reinforcing the fast-changing tone of the opposition from local crusaders staging protests and waving banners to organizations that can draw on money, expertise and experience, the WWF has just released its own report taking issue with the oil sands impact on GHGs, water consumption, the destruction of forest habitat and the dangers to the health of residents near oil sands operations.
The WWF also intends to put the spotlight on the proposed Mackenzie Gas Project, seen as posing a threat to a fragile eco-system.
NRDC report targets oil substitutes The NRDC, a non-profit organization of scientists, lawyers and environmental specialists committed to protecting public health and the environment, teamed up with Western Resources Advocates (an active opponent of oil shale development in the western U.S.) and the Pembina Institute (an Alberta-based energy and climate change research organization) to produce its report raising concerns about the development of “oil substitutes.”
Report author Deron Lovaas said “industry and political leaders are pushing us blindly down a dangerous and expensive energy path.”
“The vast amounts of energy needed to make these fuels means that overall emissions from every gallon could double or even triple. Mining fuels to put it in our gas tanks would have devastating impacts on the local communities and the landscape.”
The report issued a blunt warning to potential investors that they could face heavy liabilities and high financial risks if unconventional oil developers continue to ignore the likelihood of new emission rules and other environmental safeguards.
The NRDC estimated that oil sands operators are already using enough natural gas in their extraction and processing of the resource to heat 4 million homes last year.
In addition, the report says a mix of roads, pipelines, pits and heavy equipment used in mining operations is causing irreparable damage to an area that is home to more than 40 percent of North America’s waterfowl.
It calls for the establishment of a low carbon fuel standard for all new oil alternatives, along the lines of California’s attempts to reduce its dependence on fossil fuels, and to toughen fuel economy performance standards for vehicles and increase the use of biofuels to achieve a “future energy supply that is both clean and sustainable.”
C.D. Howe Institute: carbon tax or absolute cap needed On top of this growing threat to the oil sands, the C.D. Howe Institute, an independent, highly respected Canadian think tank, said the Canadian government can only meet its intended GHG reduction targets by imposing measures such as a carbon tax or absolute emission caps.
The institute said current policies will fall short of the goals set for 2020 and 2050, while incurring costs to the Gross Domestic Product that are “comparable to those of more effective policies that would actually achieve its targets.”
“Costs imposed by an economy-wide greenhouse gas tax, or economy-wide emissions cap, would not be substantially different,” it said.
But it suggested that Canada’s lawmakers have “largely opted for politically painless policies (over the last 15 years) that were also ineffective” and for that reason the latest policies would fall short of the 2020 target of cutting emissions by 20 percent from current levels, thus making the 65 percent reduction goal by 2050 even less achievable.
The institute said leading independent research indicates “that the principal reason for policy failure — in Canada especially, but elsewhere as well — is the unwillingness of government to place a value on the atmosphere.”
The only hope of meeting planned targets is for the federal government to consider tougher measures, it said.
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