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Principal
Cambridge Strategies Inc.
said: On 01/07/2011
Alberta’s Destiny: clean energy to benefit the world.
The world is fuelled by crude oil. And Alberta is the world’s largest oil reservoir. Our next premier must begin from the reality that we are a democratic petro-state. Let’s start with numbers. Alberta has 1.7 trillion barrels of original oil in place. That’s the largest hydrocarbon deposit in the world. Yes, but you can’t get all of it out, and it’s both environmentally damaging and costly to extract. Right and right again. Yet of that deposit, 300 billion barrels is recoverable under current technology. And of that again, about 179 billion barrels can be extracted for significant profit at today’s market rates.
Within three years, improvements in technology will make us the largest proven and audited oil reservoir on the planet, as opposed to the unproven and unaudited claims of Venezuela and Saudi Arabia. With the world addicted to fossil fuels, even if that addiction eases with conservation and lower consumption, we will be thrust into the unusual and unaccustomed position of global energy leadership. So what are we going to do about it, once it becomes abundantly clear to the political and media class that there is no easy escape in spurning the big –ticket win in the geological lottery? That’s the conversation our next Premier needs to provoke. What does that mean in terms of our planetary obligations?
We start with the presumption that we have a duty of care to the planet, a duty of stewardship of our common wealth, and sustainability of the common good. Energy development with scant regard for consequences is as unpalatable as a sudden and immediate halt to the fossil fuel economy.
We need much cleaner production from our oil sands. But even more, we need to use the energy wealth that production generates, to pay for and help to build the green and sustainable energies of the future. That’s the only viable answer to the impasse evident at Copenhagen: the developed world that played fast and loose with the environment as it enriched itself now telling the developing world it must stay poor for the sake of the planet.
This hypocrisy is rightly seen as a morally bankrupt position. It is our role as Canadians to show moral, ethical and fiscal leadership as stewards of the world’s largest oil reservoir –in funding the sustainable and abundant energy the rest of the world needs to have even a modicum of our standard of living.
My best-selling book Green Oil: Clean Energy for the 21st Century? asks citizens to grapple with this provocation: We are at least two decades away from any viable alternatives that would comprehensively replace fossil fuels as the planet’s primary energy source. While we pursue those alternatives, we can make our production and use of fossil fuels more sustainable and less damaging to the biosphere. Thus our aspiration changes from the sloganeering of being best in the world to the higher aspiration of being the best for the world.
Even as we develop our energy resources, we must be seen to be models of democracy, of pluralism, of inclusive and welcoming societies. We must demonstrate that our duty of care really brings out the best in the human spirit in all of us. Through our actions, we can pursue a sustainable life not for just the citizens of our democracy but for the entire planet.
We know that it is challenging to be good stewards of the environment while growing the economy but we are willing to do what it takes to get there.
Alberta, the owner of the resource, only has 3.8 million people. We are stretched to fulfill the duty of care that appropriate development demands. This is where we need collaboration and co-operation with global pools of talent, innovation, ingenuity, technological prowess, and capital to move forward. A clean environment and a robust economy must be complementary goals. Environment and economy are really two sides of the same coin: yet to act on the implications of this insight, we will need a level of leadership so far lacking in Alberta.
Our next premier must lead that reasoned transition, to being a responsible and dynamic energy superpower that will use our oil wealth to launch the greening of the planet we share.
Accordingly, I recommend that:
1. Alberta’s next premier commit to using at least one third of all royalties derived from the oil sands, to pay for and build a sustainable-energy future for the world.
2. This objective to be achieved over a 20- to 30-year timeframe. As a starting point the Climate Change and Emissions Management Fund should be the vehicle. Working from projections of synthetic crude oil/bitumen royalties of $7 billion in 2012, Alberta should commit a minimum of $2 billion a year to this fund. The commitment quantum should be set at one-third of the annual synthetic crude oil/bitumen royalty.
3. Funding can be on individual or agglomerated projects in such key sectors as bio-economy, nanotechnology, renewable energy. Funding should be flexible: from angel investment and venture capital, to equity stakes and public-private partnerships.
4. This 25-year commitment on Alberta’s part should be accompanied by mandatory best practices and fiscal incentives for early adopters in all relevant enterprises and ventures under Alberta jurisdiction.
Satya Brata Das is advises public and private sector leaders at his firm Cambridge Strategies.
Development Engineer
Concord Energy LLC
said: On 01/07/2011
Regardless of the hydrocarbon extracted by whatever method the water & energy nexus is an inescapable fact. The majority of the media reports in recent years surrounding oil sand extraction have been related to the water issues created by the large strip mining operations focused mainly in Athabasca, because that is where the majority of production has occurred to date.
Each deposit of oil sand, tar sand, rock asphalt etc has its own subjective conditions for operations and technical solutions to the challenges presented by the extractive project, however the environmental issues surrounding a large mining operations are more focused on a specific theater due to the nature of mining. In reality there is little difference in actual comparison between oil sand hydrocarbon production and drilled productions either on or offshore. If one was to calculate the amount of energy input to either method there would probably be equilibrium.
As to the water requirement the biggest differential is related to the proximity of development to social capital. In the current larger oil and gas plays specifically in the deeper shale formations the impacts have encroached into the backyards of the public at large, at least with a mining operation it is focused to the permitted area and therefore easier to control in terms of managing the locality of the impact.
While at Temple Mountain Energy Inc, the principle focus at the Asphalt Ridge project was the environmental impact from the beginning. The extraction technology was an ambient temperature water only method, with highly efficient recycle and reuse of all water. No chemicals where used in the separation or recovery systems on the process. We did however use certain ecologically sound agents to blend with the extracted bitumen but this was only to make a final product on the mine site for use in the construction industry for building roads. In fact the product/s would reduce the output emissions and energy use of the processes utilized in the build operation of typical road construction.
Virtually every oil sand deposit is different and each operational criteria whether logistical, technical or environmental and has to be built to meet those conditions. Not all deposits are economically or ecologically viable but with the majority of the world’s economy being hydrocarbon based, the role oil sands have played or will play is a given. It is the regulators and stakeholders that will inevitably control how, when and where these projects are carried out.
An advantageous point for the regulator is that the extractive industry does not necessarily fit under the regulation or exemptions that the oil and gas E&P industry currently have. I took the view when developing the Asphalt Ridge project that is should be carried similar to a contaminated land project, and used the BMP’s for those operations as I would on any such project in the EU, as that is principally my career background. This did in the initial phase cause some contention at various levels, mainly from the perspective of why would we go those lengths, for me it was plain and simple that the project would be a representation of how it could be done, unfortunately it did not last long enough to fully realize its potential due to the change in the economic climate.
In the development of alternative sources of energy and economy and the possible move to the hydrogen economy the role oil sands will take will probably increase to yield the hydrocarbon based compounds needed for alternative and renewable source to get a hold on the global economy. The fact is, that due to the current technical position of renewable and the cost associated with them, that oil prices will increase as they become a niche product. That will possibly create smaller developments with less impact but more effective profitability. This in turn should reduce the water requirement of both Oil and Gas production in whatever format.
Fundamentally the future will be about water…..
Chairman
Harwood Levitt Consulting
said: On 01/07/2011
The question of what role oil/tar sands should play in the global energy mix will not be decided in Europe by a gentle discussion of the pros and cons but by a titanic struggle for public opinion that is likely to illuminate the contours of environment and energy politics for a generation. The issue of what one side calls oil sands, and the other calls tar sands, may well be the one that shows to a wider public audience how climate change is changing the politics of Europe.
For the environment movement globally, and in Europe particularly, this is the issue that cannot be lost. For the energy industry whose core products are derived from fossils, it is the issue that has to be won. The environment movement’s case can be simply put; if you accept the evidence that man-made climate change is happening, then proceeding to further fossil fuel exploitation in ever more remote areas, at ever higher costs in the emissions of climate change causing gases, demonstrates that you do not think that the issue can be meaningfully addressed in our generation. For the industry, the case is equally simple, Europe’s oil and gas companies have to be globally competitive in the hunt for the natural resource that is their core product. A decision by the European Union to handicap fuel from tar/oil sands would inevitably impact on the ability of those companies to operate in countries such as Canada and, sooner or later, others where equally controversial resources are to be found. For the Western world’s energy industry, if the political debate leads to them being unable to participate in the exploitation of these resources, they will be faced with a rapidly growing perception that they are “sunset industries”. The implications for both of these important components of Western society, the environment movement and the fossil fuel energy industry, are huge-and they both know it.
The issue has come to a head in the European Union’s Fuel Quality Directive. The politicians of most member states in Europe rarely miss an opportunity to emote in public about how concerned they are about climate change. It was always the case that sooner or later an issue would emerge where a practical decision would show if politicians are prepared to accept a political and economic cost in a commitment to action on climate change. What the issue would be, and when it would emerge, was always far less predictable. Neither side in this epic struggle were able to select the battlefield.
The battle will not be resolved by rational argument, the political decision will be the outcome of highly emotional public campaigns. Behind-the-scenes much “power play” in every sense of that phrase. Several of the largest environmental organisations globally, and their representatives here in Europe, are coming under increasing pressure from their supporters who are beginning to wonder what they are getting for their donations. Senior figures are to be found writing newspaper articles questioning whether the large organisations have become as bureaucratic and as “establishment” as the corporations they set out to hold to account. To lose on this issue, which is from an environmental activists perspective clear-cut, is likely to hugely exacerbate that debate and to encourage those who are pushing for a much more radical stance.
What is the politician to do? To alienate the environment movement and render themselves vulnerable to continuous charges of hypocrisy and worse, or to risk the wrath of an electorate all too ready to blame the politician for rapidly rising energy costs, whether petrol, electricity or gas. What we are now going to witness is a power struggle between the industry and the environment movement to demonstrate which is able to mount a more emotionally powerful campaign for public support. As an example of “competitive communications” it would be difficult to beat.
For those who wish a ringside seat for the first round, the place to be is the United Kingdom. Both BP and Shell are hugely influential corporations there, an influential Parliamentary committee has recently come out in favour of shale gas, a cousin of tar/oil sands and equally detested by the environment movement. The British government is under heavy pressure from Canada to do all it can to prevent the Fuel Quality Directive from discriminating against tar/oil sands. The Prime Minister, David Cameron, has declared his intention to make his government the greenest ever. A significant proportion of his Parliamentary party in both Westminster and the European Parliament, privately believe that this commitment is madness. Their public spokesman is Margaret Thatcher’s former Chancellor of the Exchequer (Finance Minister) Nigel Lawson.
Within the government, the energy and climate cabinet minister is caught between a rock and a hard place, constantly under pressure from environmentalists to rule out various forms of energy supply, most notably nuclear power, whilst passionately desiring not to be the man in charge “when the lights go out”. The cabinet minister responsible for industry and business, is the former chief economist of Shell. The transport minister, whose department is meant to be largely responsible for the British position on this directive, is Norman Baker with a long record of “green commitment”. All three are members of the junior partner coalition party, the Liberal Democrats, they are vulnerable to losing votes to the greens and their party conference knows it.
In recent comments on the issue, the President of the United States, Barack Obama, referred to “tar sands”. As ever with such exquisitely contentious political issues, it is by the words you choose to use that you send messages to your supporters.
This issue will not turn upon the technical arguments concerning the extraction of fossil fuels, it is already clear that it is to become the defining issue for where politicians stand on the much broader issue of climate change. Expect screams of anguish from those who suddenly discover they can no longer sit on the fence.
Ends.
Professor, School of Resource and Environmental Management
Simon Fraser University
said: On 01/07/2011
My position is that no new investments can occur in oil sands if we are serious about the stance that industrialized countries must reduce emissions by at least 80% by 2050. All the leading modelers of the energy-economy system; – MIT, University of Maryland, PIK in Berlin, etc. – all show that oil sands and other higher costs sources of oil should not be developing as we must move to non-emitting vehicle fuels and technologies, and the price of oil would actually fall in such a scenario, rending oil sands uneconomic.
Allowing investment now really means that politicians should be saying “look, we are lying about the 2050 target, but no one seems to notice thank heavens.”
Journalist
Self/Tyee Magazine
said: On 04/07/2011
The rapid exploitation of bitumen by European-based oil companies and other global firms clearly signals the onset of peak oil and the beginning of chronic financial volatility for economies built on cheap petroleum.
Canada’s bitumen, a strategic North American resource, can only play a brief and minor role in the world’s energy mix due to its extreme earth-destroying character, profligate GHG emissions, and high capital costs.
To globalize this extreme oil (it takes two barrels of sand to make more barrel of bitumen) is akin to building a modern-day Vasa, a 16th century Swedish warship and technological marvel. It sank on its maiden voyage.
Contrary to claims made by Canadian and industry propaganda, a barrel of ultra heavy bitumen produces 17 to 23 percent more climate warming emissions than conventional oil. The project, which does not yet disclose emissions in a full or transparent manner, has become a carbon-making nation within Canada. Annual emissions are unsustainable and expected to grow from 45 MT a year to 120 MT a year by 2020.
To steam deep deposits of bitumen or upgrade the hydrogen- poor product into synthetic crude (now 1.5 million barrels a day) requires unprecedented volumes of natural gas or one fifth of Canada’s annual supply. By 2020 bitumen steam plant production alone will consume enough natural gas daily to heat six million Canadian homes. Industry, which seeks to prolong the life of petroleum, plans to produce an unsustainable 4-million barrels by 2030.
Energy returns for bitumen are low. Peter Tertzakian a well-respected energy analyst at ARC Financial, estimates that the energy return on energy invested (EROI) for bitumen is as dismal as 3: 1 once it’s been upgraded and refined into gasoline. Civilization now depends on energy returns higher than 10:1 from light crude.
The complexity of the $200-billion energy project creates novel liabilities. Reclaiming a 40-metre hole in the boreal forest the size of Rhode Island will be problematic if not impossible. Cancer clusters in downstream aboriginal communities as well as six billion barrels of toxic mining waste contained in some of the world’s largest dams along the Athabasca River also pose real risks.
Canada, a mining nation that still defends the export of asbestos, has failed to manage bitumen’s Troll-like footprint in a responsible manner. Canada’s Environment Commissioner, the Royal Society of Canada, a federal Oil Sands Advisory Panel, the Alberta Water Monitoring Data Review Committee and several peer-reviewed scientific papers have uniformly concluded that the current environmental monitoring regime is inadequate, underfunded, fragmented, or lacks federal leadership. Even the Oil Sands Research and Information Network (OSRIN) warned in 2010 that the industry could loose its collective social license “to operate, access markets and access capital to invest in oil sands” without real change.
Limited development of bitumen can help North America manage a transition to a post carbon society with proper climate change policies and environmental controls. But its perverse energy, carbon and capital intensity argues that the pace of bitumen production must slow down. Bitumen cannot become a global commodity without extreme atmospheric and economic consequences.
President
Ports-to-Plains Alliance
said: On 04/07/2011
I was in Washington, D.C. last year and walked past a group protesting against “big oil”. I couldn’t help but notice how much this anti-oil protest actually depended on oil. From their vinyl signs to their sound system, many of the items used in their protest were actually made from petroleum. It just goes to show how dependent our economy is on oil and will be for some time. Even as the world switches to alternative energy sources, it will take years if not decades to develop the technology and infrastructure to wean the world from oil. Therefore I believe the Alberta oil sands are vitally important to the world economy.
In a recent speech on energy policy President Barack Obama said, “Imported oil will remain an important part of our energy portfolio for quite some time.” In that same speech he said, “”When it comes to the oil we import from other nations, obviously we’ve got to look at neighbors like Canada and Mexico that are stable and steady and reliable sources.”
I work for an organization promoting transportation infrastructure and economic development along a corridor running from Alberta, Canada, through nine U.S. states in the middle of the country. We are the agriculture and energy producing heartland of North America. It is primarily a rural, sparsely populated region where highways are the primary means of transportation. We simply do not have the population density for mass transit. But we must have highways to move our goods to market in order to feed, fuel and clothe North America.
We have seen the effects that political instability in the Middle East can have on oil supply and prices, and in turn the impact those spikes have on the global economy. The United States and the International Energy Agency (IEA) addressed this when they recently announced the release of oil from strategic reserves. In its statement on the release, the IEA said, “Greater tightness in the oil market threatens to undermine the fragile global economic recovery.”
Alberta is home to the world’s third largest recoverable oil reserves, behind only Saudi Arabia and Venezuela. And important to Western countries, Canada is a stable, friendly ally as President Obama noted. To put it bluntly, we do not worry about a disruption of oil supply from Alberta because of political instability, civil wars or anti-Western extremists. Nor do we worry that the dollars we spend on oil from Alberta might one day be used against us. Only 21 per cent of the world’s proven oil reserves are accessible to private sector investment (not state controlled). About 53 per cent of the world’s open and accessible reserves to invest in are in Alberta’s oil sands.
Canada is a democracy with a free press. This is important, not only from a political, supply stability perspective, but also in regards to environmental responsibility. The duly elected government of Alberta has set environmental standards and regulations that must be met for development of the resource. The public demands that oil sands are produced in an environmentally responsible manner and the government responds with regulations on such items as emissions reduction, water usage and land reclamation. If anyone slips up you can be sure that the press will do all they can to bring it to the public attention. How many other oil producing nations and companies can say the same?
Much has been made of the greenhouse gas emissions from oil sands crude. In fact, the total “wells to wheels” carbon foot print of oil sands oil heading to the U.S. market is actually comparable to other sources and while per barrel emissions from other global sources are going up, per barrel emissions from oil sands are going down – by 29 percent between 1990 and 2009. The emissions created by oil sands production are equal to one-half of one percent of total U.S. emissions. The total annual greenhouse gas emission from more than 90 Alberta oil sands facilities is about 42 million tons. Compare that to the 41.3 million tons of GHG emissions produced by the Taichung (Taiwan) coal-fired power plant, or the 30.1 million tons of GHG emissions produced by the Belchatow (Poland) coal-fired power plant.
Many people may assume that Texans like me are blindly devoted to oil as an energy source. But many people may not be aware that Texas is also a leader in the development of renewable energy. Texas is the number one state in America for installed wind generation capacity, with more than twice as many megawatts online than the second leading state. Alberta is, by the way, a Canadian leader in wind power and renewable fuels development. In fact the Ports-to-Plains Corridor runs through eight of the 10 leading states for wind energy potential. Our region produces energy from diverse sources including traditional resources such as oil and gas and renewables such as wind, bio-fuels and solar. We realize that we cannot rely on a single source of energy, and that renewable energy is not only a “green” thing to do, but economically beneficial as well.
But we still recognize that oil is still important to our economy. Just look at what the most recent spike in oil prices did to our economy. We must have stable, secure and reliable sources of energy and the Alberta oil sands meet those criteria.
Communications Director
Utah Clean Air Alliance
said: On 04/07/2011
The Utah Governor’s Energy Plan, one must remember, is focused on carbon based energy development as Utah has huge reserves of such. In fact, Utah’s tar sands/shale oil deposits are some of the largest in the world. Like all western states extractive industry (carbon fuels, mining minerals) sets the basis of the narrative for the governors and the legislatures: jobs, energy independence, fees for the general funds.
The externalized costs of these activities are missing from the extraction-based narrative. The consideration of health costs (deaths and illnesses), loss of economic productivity (e.g., worker days lost from illness), polluted air and water which casts a pall over the communities and prevents company and labor relocation to polluted places never appears in the extraction based narrative but is highly visible in the activist community causing huge PR problems for the cities affected by degraded resources. For example, I personally submitted three major studies on the true costs of coal, one of which was sponsored by Utah under the former governor, to be considered in the development of the Utah Energy Plan. The studies were not even mentioned in the bibliography.
The carbon narrative at the national level is harming the economy as well. Boeing is losing to foreign competitors at the recent air show because the competitors offered more fuel efficient aircraft. What are we thinking?
All this to state that further development of even more dirty and costly carbon fuels needs to be put on the back burner and clean energy must be given priority. If anything uncertainty is the critical issue on this form of energy development and the examples that exist such as the Canadian and Estonian experiences should tell us we need to focus elsewhere.
Head of Business Analytics
News International
said: On 04/07/2011
The extraction of tar sands using current techniques is resource intensive, requiring significant energy inputs to extract energy, potentially damaging to the environment with extraction techniques producing local pollutants and significant disruption to local eco-systems and in my view worst of all, perpetuates dependence on fossil fuels.
Sadly, as the price of oil increases and security fears grow, we are likely to see more extreme or marginal extraction activities with diminishing returns and increased risk (e.g. deep sea drilling, arctic/antarctic exploration etc). In the meantime, development of renewable energy sources remains a relatively trivial pursuit for most governments and corporations.
We create wastelands of fossil fuel rich areas to produce energy to make things and turn other areas into garbage heaps as we dispose of old stuff. Unfortunately, while we can trash remote regions or export our problems to others, we will continue to refuse systemic solutions such as local energy from local waste.
The UK will run out of landfill capacity in 10 to 20 years (depending on which estimates are taken). Hopefully we will see the problem as an energy opportunity rather than try to find a new taker for our trash.
CEO
Johnson and Associates
said: On 05/07/2011
Oil sands should, will and actually are playing a significant role in the world’s energy picture, particularly in North America where the bulk of the world’s deposits are. Locally, the handful of refineries in the Salt Lake City, Utah area is obtaining over 25% of their raw crude from the oil sands of Athabasca, Alberta, Canada. There is also a devout effort to develop additional technologies that will soon allow similar development of the oil sands in the United States specifically in the energy rich Uinta Basin of Northeastern Utah. These sands tend to be more cemented than those in Alberta thus requiring a modification of the known technologies that exist or totally different methods altogether.
There is at least one company that is ready to start the commercial demonstration phase as soon as all permits are in order. This brings up a huge obstacle for the development of oil sands at least in Utah that needs to be stressed. Almost all of the resource is located on land that is controlled by the State and Federal Governments. Although the State has been very pro development, the Federal lands that are managed mainly by the Bureau of Land Management have not. This is true not only of oil sands but other conventional and unconventional resources as well. For the United States to work towards additional energy sources in the future, these resources must be made readily available. This is no place for partisan politics to play in this arena. With access to these and development of new and existing oil sands as with any energy resource, environmental sustainability is a must. This has and is happening at higher levels than ever before. Canada is a prime example of how reclamation of the mining can lead to actually a better area than what it started as. They are becoming more environmentally sustainable. Through continuous innovation oil sands now approach conventional onshore production environmental footprints and no doubt will improve due to the long reserve life.
In closing, there is no one single silver bullet. It will take a unified worldwide effort to reduce hydrocarbon dependence while developing these new unconventional and existing conventional resources. Until that point, all sources should be explored.
Writer
EthicalOil.org
said: On 05/07/2011
As eager as we all may be for a world where we no longer need carbon-based fuels, the reality is that it’s not about to happen anytime soon. The International Energy Agency tells us that non-combustible renewals currently comprise less than 1% of the world’s energy supply mix. We have a considerable way to go before we no longer need fossil fuels, and, in particular, oil, which makes up the largest share of the world’s fuel mix.
We might wish it were otherwise, but we must be realistic: for at least a few more decades, the world is going to buy oil from somewhere; the question is which kind of oil production we should encourage—and which kind we should discourage. For generations, the biggest North American and European economies have had to rely on oil from the world’s most brutal regimes, unable to ignore the fact that our patronage has only helped empower the dictators, terror-sponsors, rights-abusers, war-mongers and genocidaires in Iran, Nigeria, Iraq, Libya, Sudan and, more recently, Venezuela and Russia. But thanks to the recent technological and economic shifts that have opened up vast reserves in Canada’s oilsands region, until we get off oil entirely, we can at least make our imports more ethical.
This is an era of heightened awareness about corporate social responsibility and ethical purchasing. Environmental questions are top of mind, of course, but they’re only part of the equation. How industries treat human beings must be considered, too. The European Union’s work on its fuel quality directive, for instance, has so far put all of its emphasis on the former. But while considering carbon footprints is useful, such rules can only be truly ethical if they take into account oil’s moral footprints as well. Some people believe fossil fuel emissions will harm people in the future; certain kinds of oil production are harming entire populations right now.
Saudi Arabia, Iran, Venezuela, Russia, Libya and Nigeria all produce what might be called “Conflict Oil.” The genocide in Sudan by a regime dependent on oil revenues has killed hundreds of thousands of people. Russia’s oil-funded invasions into Chechnya and Georgia have likewise resulted in the slaughter of many thousands. Iran is using its oil money to build nuclear weapons that could threaten millions. Look at a list of the countries with the top oil reserves and then look at the list of the countries with the worst records on human and civil rights: regimes that oppress women, persecute minorities, exploit workers and that jail, torture and murder democrats and dissidents. The same names come up, except for one: Canada.
Canada’s oilsands offer an alternative: Ethical Oil. Ethical oil is produced in a country where women and minorities are not just protected by equal rights, but are actively recruited by firms eager to increase their diversity. It’s produced by a country that promotes peace. It’s true that Canada’s unconventional oil producers still have work to do in mitigating CO2 emissions, though intensity levels are already down 40% since 1990, and falling further. But as the world uses up more readily accessible reserves, unconventional oil is a growing part of the world mix, and the 11 Obama Administration’s National Energy Technology Laboratory already finds Alberta’s oilsands oil offering lower emissions than some unconventional Conflict Oil, such as Venezuela’s “ultra-heavy” crude.
But what’s every bit as important as the emissions profile of oilsands oil is that every barrel of oil sourced from free, secure, and peaceful Canadian workers means less revenue to prop up the unethical merchants of Conflict Oil. You can be sure that consumers and voters in oil importing countries would—given the choice—choose not only to support the environment, but to support peace, human rights and civil rights, too. Finally, Canada’s oilsands give us that choice.
Founding Editor
Oilsands Review
said: On 05/07/2011
Canada’s oilsands, as well as global heavy oil and bitumen resources, should and will play an integral role in the world’s future energy mix—provided, of course, that the industry and its regulators continue on an accelerated path of continuous improvement developing technologies and systems that boost efficiency and profitability while decreasing environmental impacts.
Despite the growing sweep of green rhetoric across OECD countries, demand for energy is increasing, particularly in the world’s emerging economies. The thirst for fossil fuels remains unquenchable. This is a long-term problem that can only truly be addressed by reducing the energy consumption related to the production and operation of consumer products.
Singling out the oilsands industry, and more because of its receptiveness to criticism than the realities of its impacts relative to other high-carbon industries (ahem, coal), is reckless and short sighted.
Regardless of the upstream source of oil production, on a wells-to-wheels analysis, nearly 80 per cent of greenhouse gas emissions come out the tailpipe. This is not to say that Canadian heavy crudes are not more GHG intensive than many other sources—they are, but not as much as some would have the public believe. The Alberta Energy Research Institute reports that oilsands pathways generally have about 10 per cent higher emissions than conventional crudes. But that is not a static number—new technology can, has and will continue to decrease GHG emissions from oilsands projects.
Let us not forget that the choice of whether or not to produce heavy oil and oilsands is not as black and white as detractors would project. Many make it sound like there is a wealth of light, sweet, low-GHG conventional crude oil that is all dressed up and ready to go, being held captive by greedy oil companies that would prefer to produce from the evil tarsands. This is simply not the case. Conventional crude oil is a declining resource. Oil is also a key part of almost every aspect of daily life in developed countries, a quality of life rightly desired and increasingly being experienced in developing countries.
As the world embarks on its decades-long transition to non-fossil fuels, a bridge is required. That bridge is bitumen. This is really very simple: Consumers want oil. Oil production is good business. Oil companies produce oil, making money for their investors and providing governments with revenues to build infrastructure and social services. The evolution of technology makes oil production more sustainable.
But where is the oil? According to the Canadian Association of Petroleum Producers, 52 per cent of oil reserves available to capital in the world are in the Canadian oilsands. And Canada is a place where one can be assured that the commitment to always to better—for communities, for the environment, and for investors—is ingrained.
Director
Center for Conservation Biology, University of Washington
said: On 05/07/2011
This article has been co-authored with Jonah Keim,Senior Scientist at Matrix Solutions Inc.
The need and time for monitoring environmental impacts in the oil sands has never been greater or more opportune, particularly when it comes to caribou and interacting wildlife. Existing data paint a grim picture for caribou in the oil sands, triggering protective action under Canada’s federal species at-risk act. However, long-term monitoring is needed to more accurately evaluate the consequences of development in the oil sands and to guide mitigation efforts. We have developed comprehensive methods that can help.
It has been difficult to determine the causes and rate of the caribou decline. Habitat alteration from oil sands development in Alberta has been identified as the primary cause. However, methods to reliably monitor impacts on caribou have, until now, been unavailable. Imprecise historic data on population trends predict caribou herds to go extinct in the oil sands during the next two to three decades. A resulting sense of urgency has led to a number of intensive management options to recover caribou populations; some have already been applied, others are still being debated. Options include:
1) Large scale wolf and deer removal campaigns (using aerial gunning and strychnine bait);
2) Creation and maintenance of a genetic stock of caribou within a secure, fenced range void of predators; and
3) Triage management directed only to those caribou herds mostly likely to persist.
Our recent publication (Wasser et al. 2011), details innovative methods to accurately monitor how the oil sands impacts abundances and physiological health of caribou, wolves and alternative prey species. Our results offer new insights and management options to address this complex problem, as well as the monitoring method needed to evaluate how well these recommendations are working.
Using specially-trained detection dogs, fecal samples from caribou, moose and wolves were located with high precision and efficiency. Four dogs allowed us to collect 1,500-2,000 samples in 10 weeks over a 2,500 km2 study area during each of three sampling years. DNA, diet, and hormones extracted from each sample enabled us to measure food intake, stress, nutritional condition and pregnancy, as well as acquire the first reliable abundance estimates for caribou, moose and wolves in this area. Sample locations were analyzed to examine habitat preferences and responses to oil exploration activities on the landscape.
Our key findings are summarized as follows:
1) Caribou population size was more than double current perception, and caribou, moose and wolf abundances did not significantly change over our 4-year study duration. These results suggest that caribou, moose and wolf population changes are occurring at a slower pace than previously indicated, perhaps giving more time to properly address the problem.
2) Wolves are targeting an expanding deer population within this ecosystem, based on wolf habitat preferences and diet. This makes wolves important for holding back the reported expansion of deer into the oil sands. Wolf removal could lead to a population explosion of deer, potentially increasing disease outbreaks, habitat alterations and creating high-amplitude predator and prey oscillations that may become impossible to control.
3) Functional habitat and physiological health of caribou are negatively affected by the degree of human activity on the landscape. Caribou prefer open flat areas that enable them to see, hear and escape from predators. However, these preferences also make it easy for caribou to detect humans on the landscape. Impacts to caribou habitat and health increase closer to roads and with more people on the landscape, particularly when primary access roads are concentrated in areas most preferred by caribou. Caribou also prefer habitats rich in lichens —their primary winter food. However, lichen-rich habitats are selected reluctantly because they are also associated with human activity in our study area: Caribou avoided these important foraging habitats when close to roads; the more people using those roads, the more caribou avoid them.
4) We suggest ways to modify human-use of the landscape that should be tried before resorting to more invasive and risky management options such as wolf and deer removal or fencing caribou ranges. Importantly, we also provide methods to reliably monitor how well these mitigations are working.
A long-term monitoring commitment is needed to understand this complex system and how best to mitigate human impacts. Our 4-year study duration provides only a small increment of the monitoring data that are needed. We are confident that our methods can help achieve these goals and we hope that the oil industry will continue to use them. However, at this stage, the likelihood that our monitoring program will continue in the oil sands seems slim; our last year of data collection was in 2009.
Policy Officer for Low Carbon Fuels
Transport and Environment (T&E)
said: On 06/07/2011
Greenhouse gas emissions from transport are increasing but must be cut substantially for the world to have a chance of keeping global warming to less than 2 degrees. While reducing our demand for transport and improving the efficiency of vehicles is critical, reducing the lifecycle emissions associated with fuel extraction and processing will also play an important role.
The low carbon fuel standard adopted as part of the EU’s Fuel Quality Directive at the end of 2008 is an important step in that direction as it says fuel suppliers should reduce GHG emissions from their fuels by 6% by 2020. And the theory is a good one, that fuels should compete on the basis of how carbon intensive they are.
But in order to achieve this objective, all fuels should be considered on a level playing field which takes into account their carbon intensity. Numerous scientific studies have shown that tar sands emit more CO2 than conventional oil. A European Commission report showed that tar sand-derived fuels are 23% more polluting than fuels derived from conventional oil sources. This should be properly reflected in the regulation, by giving tar sands a specific emission-related default value. If, to the contrary, they are considered at the same level as conventional oil, they will receive an unjustifiable preferencial treatment. Such a move would be counterproductive and defeat the purpose of the low carbon fuel standard. If tar sand producers, in the future, find a cleaner way of producing oil from tar sands, then they can provide evidence to the Commission, and this evidence will surely be taken into account.
If the EU gives in to the demands from Canada and the oil industry and just ignores the environmental consequences of producing and using tar sand oil, the EU’s credibility on climate issues will be at stake. There is simply no point in setting laws if their effectiveness can be completelyundermined by third countries who take a disliking to them. Rather than hoping for technological miracles to make dirty sources of energy magically cleaner, industry should focus on investing in fuel-saving options thus reducing our demand for oil and, in general, for energy. The EU should send the industry a clear signal that this is where the future lies.
Chairman & Managing Director
Tormacon Limited
said: On 07/07/2011
Brazil and Canada, and to a lesser extent Kazakhstan, represent the rising importance of the unconventional oil reserves. Brazil has its deepwater plays, Canada the oilsands and much of Kazakhstan’s oil lies below the Caspian Sea.
What’s even more interesting is the role Canada will play -even as production ramps up in Iraq. There has been a good amount of discussion in oil circles of late on the question of the impact more oil produced from Iraq could have on the demand Fossil fuels (primarily oil, coal and natural gas) are forecast to play an important role in the global energy mix for the foreseeable future. It is also forecast that an increasing share of energy demand will be met by hydroelectricity, wind, solar, nuclear and other forms of renewable and alternative energy. All of these sources of energy will be required to meet global demand.
Canada’s oil sands, located primarily in the province of Alberta, have the potential to significantly enhance North America’s energy security by providing a safe and reliable supply of crude oil and petroleum products, and the oil sands industry is committed to the responsible development of this important resource for Canada’s oil sands.
The one conclusion to draw from this is fairly clear: increased production from Iraq is unlikely to have a negative impact on the demand for Canada’s unconventional barrels; the world is going to need every drop of oil because of the surging demand for cars in China and other developing countries. The number of cars on the road by 2035 will be 1.6 billion, with more than half in China and the developing world.
The other take-away is Canada’s perspective is that the importance of the oilsands in meeting the world’s energy needs is going to more than offset the ongoing opposition from environmental groups to the continued development of the resource.
The environmental organizations may well want to protest warning this time of heightened safety risk associated with pipelines carrying oilsands crude into the U.S. because the oil is apparently more corrosive and could result in another spill. These barrels are important in meeting the world’s incremental demand -especially in the absence of other viable substitutes. On has to note the growing presence of renewables, but also notes that they remain dependent on government subsidies -to the tune of $205 billion by 2035 from $57 billion in 2009.
The other substitute noted, of course, is natural gas. The glut that has caused prices to fall could see the commodity displace coal as well as renewable options. The IEA’s view is that natural gas will play a key role in the world’s future fuel mix -increasing 44 per cent by 2035.
But another perspective needs to be added in terms of Canada’s positioning in the IEA analysis.
The other 10 countries on the list are in regions of the world that have suddenly become much less stable. That ‘hood’ doesn’t look so good right now.
Thus, the consequence of a regime change in Egypt is not the closing of the Suez Canal as many feared, it is that there are oil-producing countries suddenly vulnerable to what has just swept through Egypt. It likely won’t affect Saudi Arabia, but Iran, Libya and Algeria are starting to see their citizenry emboldened by the events in Egypt and Tunisia. How these demonstrations end -or indeed where else they spread to -is difficult to predict but the uncertainty will undoubtedly contribute to oil price volatility, not to mention cause importing countries to look for oil from more stable sources.
Between the uncertainty in the Middle East and the growing demand for energy around the globe, not only are oil prices vulnerable to the upside, Canada’s oilsands are looking more attractive by the day. Should this continue, one can imagine the pressure being put on Canadian companies and governments to move faster at boosting export market capacity for the purpose of reaching countries beyond the U.S. that want to decrease their exposure to oil coming from unstable regimes.
The oilsands might be seen by many as the energy’s sector’s ugly duckling, but in the real scenario they are the only hopeful beacon.
Anyone who still hasn’t grasped the significance of Canada’s oilsands resource would do well to pay attention to the IEA’s analysis.
Between 2009-2035, the IEA shows that more of the world’s incremental oil production will come from a smaller number of producers. The fact the 13 names are primarily members of the Organization of Petroleum Exporting Countries, as well as the name at the top of the list being Saudi Arabia shouldn’t surprise anyone.
But what might raise a few eyebrows are the non-OPEC producers that are on the list, not to mention those that are not.
The IEA’s analysis puts the second largest producer as Iraq -which of course presumes the country will be able to develop its massive oil reserves. This, of course, depends on political stability that, in turn, will attract much needed foreign capital and expertise.
The third, fourth and fifth spots are occupied by non-OPEC players: Brazil, Kazakhstan and Canada. The rest of the spots are filled by OPEC players; the country notably absent from the analysis is Russia.
China’s voracious appetite for fuel will push up oil prices substantially over the next two decades and will ensure that unconventional oil, notably Canada’s oil sands, will play an increasingly important role in the global energy mix, the International Energy Agency says in its flagship World EnergyOutlook report.
The report forecasts that the crude oil prices will reach $113 (U.S.) a barrel (in 2009 dollars) in 2035, up from an average of $60 last year. Fatih Britol,the IEA’s chief economist, predicted that the price will rise to about $110 in 2015 from the current price of about $87.
Chinese growth is the energy price drive. “It is hard to overestimate the growing importance of China in global energy,” said Nobuo Tanaka, executive director of the IEA, said in a statement. “How the country responds to the threats to global energy security and climate posed by rising fossil-fuel use will have far-reaching consequences for the rest of the world.”
China overtook the United States in 2009 to become the world’s largest energy user, in spite of its relatively low per-capital energy consumption. In theIEA’s outlook, China alone will contribute 36 per cent of the projected growth in energy use between 2008 and 2035.
The IEC expects oil demand to grow steadily, in spite of the considerable investments being made in non-fossil-fuel technology and carbon reduction efforts under last year’s Copenhagen climate-change accord. By 2035, oil demand will reach 99-million barrels a day, about 15-million barrels higher than 2009’s level. All of that growth will come from developing countries — almost half from China alone. Demand in the developed world will actually fall by six-million barrels a day.
Canada’s role as an energy powerhouse seems secure under the IEA forecasts as so-called unconventional oil — oil that cannot be easily pumped out of reservoirs — takes a bigger proportion of the total oil mix. Unconventional oil is dominated by the oil sands in Northern Alberta and the heavy oilreserves in Venezuela. The IEA expects oil sands production to climb from 1.3-million barrels a day last year to 4.2-million in 2035, “making an important contribution to the world’s energy security.”
In conventional oil, the globe hotspot is the Caspian Sea region, the IEA said, which contains “substantial resources of both oil and natural gas.” Theagency said that Caspian oil production should peak at 5.4-million barrels a day between 2025 and 2030, up from 2009’s 2.9-million barrels, with all of theincrease coming from Kazakhstan.
Kazakhstan’s oil-production growth will be the world’s fourth highest, after Saudi Arabia, Iraq and Brazil, making the former Soviet republic an energysuperstar. The IEA said the financing and building pipelines for the export market loom as the country’s greatest challenge.
Caspian gas production is also set to soar. The IEA expects the region to pump out 310-billion cubic metres in 2035, almost double the current figure. Turkmenistan is driving this expansion.
Gas will become the fuel with the brightest future. Demand for the fuel fell in 2009, because of the global economic downturn, but has since resumed its upward trajectory. The IEA expects demand to rise by 44 per cent by 2035 — an average rate increase 1.4 per cent a year. China’s gas-demand growth will be 6 per cent a year. “China could lead us into a golden age for gas,” the IEA said. “Demand in the Middle East increases almost as much.”
In spite of the rising demand for gas, the IEA expects the “gas glut,” which has depressed prices, will expand to 200-billion cubic metres next year, up from 130-billion this year, followed by “a hesitant decline.”
Given the leap in fossil fuel demand, the IEA held out virtually no hope that the national commitments made to reduce greenhouse gas emissions will be met. “Rising demand for fossil fuels will continue to drive up energy-related carbon dioxide emissions through 2035, making it all but impossible to achieve the 2-degree C [temperature rise limit] goal, as the required reductions in emissions after 2020 would be too steep,” the IEA said.
The IEA blamed “lack of ambition in the Copenhagen Accord” even though the agency believes the technology exists to reduce the planet’s carbon footprint. It noted that even though the use of renewable energy (hydro, wind, solar, geothermal, among others) will triple by 2035, its share of totalenergy demand will rise to only about 14 per cent.
The slow progress so far in reducing carbon output means the estimated cost of reaching the 2-degree goals has increased by $1-trillion “and undoubtedly made it less likely that the goal will actually be achieved,” the IEA said
The importance of oilsands is clear from the following facts:
• 39% better: GHGs from oil sands have declined 39 per cent per barrel from 1990 to 2008.
• Oil sands crude is 5 – 15 per cent more GHG-intensive than the US average on a well-to-wheel, or lifecycle basis.
• Canada produces two per cent of global GHG emissions.
• Oil sands production accounts for five per cent of Canada’s total GHG emissions.
• Oil sands production accounts for 0.1 per cent, or 1/1000th of global GHG emissions.
• Oil sands’ total GHG emissions of 38 megatonnes (Environment Canada 2007 ) is equivalent to one per cent of emissions from the United States power generation sector.
GHG Solutions
• Advancing technology = lower emissions: Technology enables Canada’s oil and gas industry to deliver more energy with fewer GHGs per barrel of oil equivalent.
• Billions of dollars invested every year: $50 billion was invested by the oil and gas industry in 2007 and 2008 – Canada largest single private sector investor. 2010 investment is projected at $40 billion.
• Diversity: With energy demand increasing, all sources of energy – from renewables to oil sands – will be needed.
• Lower Carbon: Canada has large reserves of natural gas, a lower carbon fuel. Natural gas could play an even larger role in meeting our energy needs.
Canada’s Rank in World Energy
• 2nd largest crude oil reserves in the world
• Largest uranium reserves in the world
• 3rd largest natural gas producer in the world
• 2nd largest hydroelectric generator
• Largest supplier of energy to the United States, the biggest energy market in the world
The oilsands despite all criticism are the hope of sustainable development.
Energy Policy Analyst
Greenpeace Canada
said: On 07/07/2011
Commentators on this topic such as Alykhan Velshi and Deborah Jaremko are opening with an argument along the lines of “well, we need the oil so the resource will inevitably be developed.” In fact, when you review the data coming from the International Energy Agency (IEA), it is clear that this high-cost, marginal source of oil is only needed in scenarios where the world is experiencing dangerous levels of global warming.
For the sake of argument, let’s set aside for the moment the disastrous local health, environmental and social impacts of the tar sands, as well as the thousands of violations of First Nations treaty rights currently before the courts, in order to focus on the issue of supply and demand for oil from the tar sands in a carbon-constrained world.
The IEA’s World Energy Outlook 2010 examined three possible futures for global oil consumption:
Current Policies: A business-as-usual scenario where very little is being done to reduce greenhouse gas emissions and temperatures rise by up to 6 degrees Celsius, leading to what the IEA calls “massive climatic change and irreparable damage to the planet.”
New Policies: Governments implement measures consistent with their greenhouse gas reduction commitments under the Copenhagen Accord. According to the IEA: “The New Policies Scenario puts the world onto a trajectory consistent with stabilising the concentration of greenhouse gases at just over 650 ppm CO2 -eq, resulting in a likely temperature rise of over 3.5°C in the long term.” This is inconsistent with the Accord’s stated goal of keeping warming below 2 degrees Celsius.
The 450 Scenario: Sufficient action is taken to stabilize CO2 concentrations in the atmosphere at 450 ppm, which the IEA estimates has a roughly 50 per cent chance of keeping global warming below 2 degrees.
The demand for oil from the tar sands varies greatly depending on which scenario you are attempting to realize because the IEA identifies Canadian oil sands production as “the marginal barrel”. As the highest-cost supplier, the oil sands are particularly sensitive to changes in the global demand for oil, e.g. over 85 per cent of all of the upstream oil and gas projects in the world that were cancelled or pushed back by at least 18 months globally in response to the 2008 economic recession.
The demand for oil from the tar sands in these IEA scenarios is summarized in the graphic below. It is important to note that there are currently 4.1 million barrels per day worth of tar sands projects either operating, under construction or which have final approval, while an additional 4 million barrels per day are at various stages of the approvals process.
In the IEA’s 450 Scenario, the global demand for oil drops over the next 25 years and as a consequence, “projects currently under construction or being planned [in the Canadian oil sands] would suffice to match supply to demand.”
Not satisfied with a 50 per cent chance of staying below 2 degrees of warming, Greenpeace has worked with the renewable energy industry and experts at the German Aerospace Agency to map out our own plan for reducing global greenhouse gas emissions. We call it the Energy [R]evolution and this global energy strategy was one of the four principal scenarios featured in the Intergovernmental Panel on Climate Change’s recent Special Report on Renewable Energy Sources.
In the Energy [R]evolution scenarios, we achieve larger reductions in oil consumption by tapping into the large potential for improving the efficiency of the transport sector by shifting freight from road to rail, expanding public transit, by using much lighter, smaller and more efficient passenger vehicles, and by accelerating the transition to electric vehicles powered by renewable energy.
This is the possible future – where the world has avoided the worst impacts of climate change while meeting global energy needs – that Greenpeace is working to realize. In this possible future, there is no need for expanding oil extraction from the tar sands, and existing projects could be phased out.
Proponents of rapidly expanding the tar sands may be advocating for and working to realize a different possible future, but as noted in the commentary on this page from Professor Mark Jaccard, they should be honest with respect to the devastating ecological and social consequences of that choice.
Associate Dean and Canada Research Chair Professor
University of Ontario Institute of Technology (UOIT)
said: On 07/07/2011
Oil sands are found in extremely large quantities in Alberta, Canada. These consist of a mixture of sand, clay, water and dense form of petroleum called bitumen. According to Alberta Energy (Facts and Statistics, http://www.energy.alberta.ca/OilSands), Alberta ranks third, after Saudi Arabia and Venezuela, in terms of proven global crude oil reserves. In 2009, the proven oil reserves in Alberta were 171.3 billion barrels, or about 13% of total global oil reserves (1,354 billion barrels). About 99% of Alberta’s oil reserves are in the form of oil sands.
Canada’s oil sands are expected to have an increasingly significant and major role in the world’s future energy mix. In 2010, there were about 91 active oil sands projects in Alberta. By 2019, this is anticipated to rise rapidly, with crude bitumen production expected to more than double to 3.2 million barrels per day. This importance of oil sands in the energy mix will increase in coming decades as bitumen production grows while conventional oil reserves decline.
The oil sands industry in Canada leads to approximately 5% of Canada’s overall emissions of greenhouse gases and about 0.1% of the world’s emissions. Through a number of research advances made by industry and universities, GHG emissions per barrel of oil from the oil sands have been reduced by an average of 39% between 1990 and 2008.
Alberta’s oil sands will need large amounts of hydrogen to upgrade bitumen to synthetic crude and remove impurities. Current needs are about 770,000 tons / year, projected to grow to 2.8 million tons/year by 2020. So before the “hydrogen economy” spreads to consumers, Alberta’s oil sands industry will already heavily rely on hydrogen for converting oil sands bitumen into premium light oil for refineries.
The number of industrial customers for hydrogen is expected to grow as oil sands production increases. One of the future challenges will be to reduce the environmental impact and greenhouse gas emissions from the hydrogen production for bitumen upgrading. The predominant existing processes use fossil fuels to produce hydrogen, such as natural gas (steam methane reforming; SMR) or coal gasification.
Active research is underway around the world to develop sustainable, lower-cost methods of producing hydrogen in large capacities. Since hydrogen is a primary component of oil sands and other petrochemical operations, those companies that acquire the technologies of low-cost, clean production of hydrogen will gain a competitive advantage in the future development of hydrocarbon fuels.
An international consortium, led by the University of Ontario Institute of Technology in Canada, is developing breakthrough technologies of clean hydrogen production, called the copper-chlorine (Cu-Cl) cycle and solar photocatalysis. In collaboration with Atomic Energy of Canada Limited, Phoenix Canada Oil Company Limited, Argonne National Laboratory, and a number of other partners across Ontario and internationally, our 30-member team is building the world’s first large lab-scale demonstrations of the Cu-Cl cycle and Phoenix solar photochemical water splitting. The team aims to then build a pre-commercial pilot plant for clean hydrogen production which could serve industrial markets such as Alberta’s oil sands.
The Cu-Cl cycle consists of four main chemical / physical processes that are connected together, to form a closed internal loop that re-cycles all compounds on a continuous basis, without emitting any greenhouse gases. It is capable of utilizing waste heat and non-pure water (such as brackish or sea water) for clean hydrogen production. A scaled-up pilot plant, based on the UOIT-led team’s breakthroughs, could be eventually linked with nuclear, solar or other waste heat sources (such as steel recycling, cement or petrochemical plant emissions) to achieve higher efficiencies, lower environmental impact and lower costs of hydrogen production than any other existing technology.
Research Fellow
Hoover Institution, Stanford University
said: On 07/07/2011
I’d like to expand on Satya Das’ concept of linkage, because I really see this as the key to responsible oil sands development. I’m going to limit my discussion to Canada, because not only is it the largest commercial deposit of oil sands, but the development of the other major deposit in Venezuela is less likely to be open to international l influence. I’ll also leave aside, smaller deposits in countries like the United States which have seen limited commercial development.
Given the enormous value of the resource, It is not likely to be economically or geopolitically realistic for Canada not to utilize its oil sands, which represent by some measures, the world’s largest reserve of oil (albeit in the form of very heavy crude), sitting in the country adjacent to the world’s largest oil market. Therefore, the operative question becomes not if, but how and under what conditions, the oil will be extracted.
Since both the greenhouse gas implications (primarily from the extensive use of natural gas during production) and the potential local pollution effects of oil sands production are substantial, if Canada wants to keep its green reputation free of the stench of hypocrisy it must essentially make the following trade—Oil sands can be developed for near-term energy usage, with the understanding that some meaningful percentage of revenues from it is targeted for green energy initiatives within Canada, whether that be project finance, or, even more preferably major R&D efforts, where Canada can take advantage of its world-class researchers and use this revenue to help establish itself as a leading center for clean economy research. This could put Canada on the path to becoming a leading energy exporter, not just in conventional energy, but also in green energy.
Additional R&D could be supplied to explore ways to make oil extraction from the oil sands more environmentally friendly. Carbon Capture and Storage, should also be explored, as The Government of Alberta has just announced it will do in a major oil sands effort—While the capture and storage technology is unproven , in many ways the environment in the area provides an ideal testbed, since it is far from other populated areas and major landholdings, reducing some of the potential liability risks that attend CCS in more populated areas.
The amount of clean energy funding derived from oil sands production should vary with the price of the oil on the world market—in boom times, clean energy R&D should benefit from a larger percentage of windfall profits, while in times with lower prices, the amount should not be so high as to take the resource out of production when it would otherwise be competitive.
Ultimately, for energy security and economic reasons, the logic for oil sands development can be made compelling—but only if it is linked to an environmental program that both reduces the impact of oil sands extraction in and of itself, but also treats it as a foundational funding block for a cleaner energy future.
Managing Director
GSW Strategy Group, LLC
said: On 07/07/2011
The fact that extracting petroleum from oil sands emits more greenhouse gases than the production of comparable oil from conventional sources is not in dispute. Both supporters and critics agree on this point, though they can choose from a wide range of estimates in gauging just how large the excess emissions are. But for too many opponents of oil sands development or trade the discussion ends there, in a selective choice to treat these emissions in isolation and omit both their global context and their systematic assessment in the manner of emissions from other sources, on a full lifecycle basis. The stakes for both energy security and the climate are too high to ignore those omissions.
When comparing Canada’s oil sands to other oil resources, we can’t focus only on how much carbon dioxide and other GHGs are emitted in exploration and production. Whether from conventional onshore wells or from an oil sands upgrader fed by bitumen produced by “in situ” methods, the “upstream” emissions in the petroleum supply chain are only a modest slice of a pie that includes transportation and refining and is dominated by combustion in end-use devices like car and aircraft engines, where up to 85% of emissions occur. On a lifecycle, or “well-to-wheels” basis, the emissions from oil sands are around 15% higher than from conventional oil. That difference is equivalent to putting gasoline refined from conventional crude into two cars, one of which gets 35 miles per gallon (6.8 liters per 100 kilometers) and the other 30.4 mpg (7.8 l/100km). Just as fuel economy isn’t the only factor influencing a consumer’s choice of which car to purchase, the emissions difference between Canada’s oil sands and other imported oils shouldn’t be the only consideration in choosing among suppliers.
Then there’s the matter of who bears the responsibility for those emissions under international climate change agreements. Unlike the US, Canada signed and ratified the Kyoto Protocol and agreed to reduce its emissions by 6% compared to 1990 by 2012. It is on track to miss that target by a wide margin–due in part to oil sands production–but then so is the US, by about 14% as of 2009’s data. Should Canadians or Europeans shun US goods because we have not reduced our emissions in line with Kyoto? If the answer is yes, then the debate over oil sands would be lost in the global trade meltdown that would ensue, including an embargo on all goods from China, which has more than doubled its emissions since 1994. Such an approach makes no more sense than a selective ban on importing oil sands products into the US.
Despite their extra emissions, oil sands have a role to play as the world transitions to cleaner, more sustainable sources of energy. That transition will take decades, and while it is underway, the global economy will need reliable sources of oil to fuel the economic growth required to afford climate mitigation measures. That doesn’t mean we should ignore the emissions from oil sands, but we should also understand that they are amenable to reduction through the same approaches as any others: through the application of improved technology at the source, through higher efficiencies in end-use devices like cars, and through emissions trading and offsets. Unlike the pollutants that cause smog, a ton of CO2 emitted in Alberta has the same effect on the climate as a ton emitted in Boston or Beijing. We should capitalize on that fact.
Associate Adjunct Professor
University of Calgary
said: On 11/07/2011
Former Province of Alberta Premier Peter Lougheed, credited with turning Alberta’s economy into a powerhouse, is a strong proponent of more research and development. He believes that the pace of Oilsands development got a bit ahead of itself and that an orderly development is needed.
However, orderly development is hard to find in a region where more than two percent of new disturbance is added each year to lands that are already highly disturbed. At this rate, in less than two decades there will be little area left undisturbed in the lands leased to industry. This calculation is based on satellite image analysis and includes the footprint of vegetation cleared, in addition to a zone of influence of 250 m around each disturbance. Looking at fragmentation as a measure of ecosystem degradation, we have seen that an asymptote of maximum fragmentation of natural vegetation patches has been reached already. This means that the losses of natural land-cover affect all ecosystem components and processes, from vegetation to wildlife, hydrologic cycles, and carbon sequestration. Recent peer-reviewed studies show that water quality and air quality are declining, although measured parameters seem to indicate that quality guidelines have not been exceeded for the region. Whereas several authors have raised the issue that green house gas (GHG) emissions are increasing with oil sands development, few have connected the increase in emissions with the lowering of the ecosystem’s capacity to capture GHG. This lowering is simply a result of the loss of vegetation that would have been able to capture some of the GHGs. Therefore, a double hazard for the environment is emerging, but as of yet remains scientifically unexplored.
The problem in the management of environmental issues in the Oilsands lies in the pervasive lack of rigorous scientific analysis. Too few environmental parameters have been measured adequately and, given the current pace of development, it is likely that many environmental parameters will be changed before we have the chance to understand their pre-disturbance baselines. The inadequacy of our understanding of these baselines has now reached a consensus among independent scientific reviews of the environmental management in the Oilsands.
Responding to a mounting pressure to do a better job, the Government of Alberta recently developed a regional plan proposing to set aside conservation areas. However, once again, there is no evidence that the government used scientific studies to help decide what land should be set aside to preserve intact ecosystems and traditional ways of life. Rather, the conservation areas proposed in the plan appear to be entirely based on simply avoiding industry leases. As land is already leased to industry, we are behind the eight ball in trying to establish conservation areas that preserve both ecosystems and traditional lifestyles. The Sustainable Resources Development Department (SRD) acknowledges that land already developed was not eligible for conservation in their plans.
In a rebuttal to criticism, SRD Minister Mel Knight assured the public that developing the regional plan followed the International Union for the Conservation of Nature’s Protected Areas Guidelines. However, the guidelines call for well-designed ecological gap analyses to assist with the protection of sensitive species. In addition, the guidelines recommend that conservation areas be designed “to enable indigenous communities to maintain their traditional wilderness-based lifestyle and customs, living at low density and using the available resources in ways compatible with the conservation objectives.” First Nations (a term used for Alberta’s indigenous communities) submitted recommendations for the design of conservation areas, but these recommendations did not appear to have influenced the regional plan. I found no evidence that the plan was based on the analyses the international union recommends. I thus continue to support the requests by independent provincial and federal review panels for a rigorous scientific approach to the environmental planning processes in the Oilsands.
Environmental management in the Oilsands needs scientifically rigorous studies to first show what the problem is and then to measure the success of remedial action. Where is the centralized data warehouse that could be publically accessible to study the changes from baseline condition through today and into the future? Where are the protocols that would coordinate data quality objectives across the region? The reluctance of the Government of Alberta to prescribe data quality objectives to industry is apparent in all phases of the environmental management process, from the scoping of projects, to environmental impact assessments, to monitoring and follow-up. For example, in the context of reclaiming areas that were disturbed by industry, I have asked some regulators how they would test whether or not a proponent is compliant with some conditions often seen in regulatory approvals of Oilsands projects, such as: “re-establish [wildlife] habitat levels, at a minimum, similar to that which existed prior to disturbance”? The response was essentially that they don’t know because such approval conditions have never been tested. This is surprising given nearly fifty years of Oilsands development. The response testifies to the absence of concrete reclamation targets, the lack of setting testable questions, and the inability to hold approval holders responsible for being compliant with such approval conditions.
Environmental monitoring reports are required by and readily submitted to regulators. The information contained in the reports often speaks to the number of oiled or injured animals on the mine site, or the planting of any number of trees. While the counting of animals on site, oiled or injured, helps understand some of the direct impacts on wildlife, and while the number of trees planted helps to understand that some reclamation is being conducted, neither piece of information answers the question about how ecosystems are being re-established. How many animals were there before the project and how many are expected to be there after project closure? How many trees of which species where there before and how many are expected to be there after? What were the compositions of species of animals and plants before and what should they be after? The success of reaching the intended re-establishment of ecosystems must be defined, measured, and tested.
The Oilsands may be one of the world’s most economically and politically stable sources of hydrocarbons for many decades to come. However, extraction of these hydrocarbons is technically challenging and hence costly. The challenge is that the cost rises with the need to protect and restore what we disturb. The global community must make an informed decision about balancing the true costs, financial, environmental, and social, with the benefits of Oilsands development. I reviewed hundreds of regulatory documents and ecological surveys and reports over the course of the past 15 years or so. My conclusion is that to date, the accurate accounting of what was there, what we took away, and what we put back has not been done. Just like any industry or political leader would not want to make decisions without seeing the balance books, we should not make decisions about the Oilsands without seeing the ecological books. An orderly development is needed indeed.
Campaign Coordinator
Friends of the Earth Europe
said: On 11/07/2011
Read FoE Europe report “Tar sands – Fuelling the climate crisis, undermining EU energy security and damaging development objectives.”
There is a concerted lobbying campaign by the Canadian Government to undermine the Fuel Quality Directive, a flagship EU policy on climate change, whose aim is to reduce the life cycle greenhouse gas emissions from transport fuels. The Commission’s proposal to include a separate default value for the tar sands caused outrage with the Canadians, who have done everything in their power to undermine and delay it. Canadians have attacked their critics for being ill-informed and emotional, whilst saying they stick to the science and the facts.
In many ways the Canadians have acted like the tobacco industry that tried to keep the debate open about smoking, as they have tried to undermine independent scientific studies over the tar sands to delay action.
Friends of the Earth believes that if the EU is committed to tackling climate change and Europe’s dangerous dependency on imported fossil fuels it must move to a low-carbon energy path. A “green” stimulus is also seen as a motor for Europe’s future sustainable development. But for its climate and energy goals to be credible, the EU must take effective policy steps to prevent the “re-carbonization” of our economy that will inevitably result from expanding production of tar sands and other forms of unconventional oil.
Current levels of tar sands imports into the EU are low but are bound to increase as production and refining capacity expands. Use of such climate-damaging energy products is simply not compatible
with the shift to a low-carbon economy. They must therefore be actively stopped from entering the EU market.
Time is critical since, as unconventional oil resources are about to go global. New deposits of tar sands and other unconventional oil have been discovered or are already being exploited in countries such as Venezuela, Madagascar, Congo-Brazzaville, Russia, Jordan, Nigeria and Angola. One new frontier for tar sands development is Africa, a region already highly vulnerable to the impacts of climate change.
Apart from making a mockery of climate protection, tar sands production in Canada has resulted in serious damage to local communities and the environment, including destruction of the boreal forest and increased pollution that has impacted on the health and livelihoods of First Nations communities. In countries with weaker political and environmental governance frameworks, the consequences of its expansion are likely to be devastating. In Africa, in particular, progress towards Millennium Development Goal 7 on Environmental Sustainability will be seriously under threat. Considering experiences with conventional oil extraction in many African countries over the last decades, tar sands development will also hamper achievement of other MDGs.
If the EU is serious about tackling the interlinked climate and energy challenges – not to mention supporting sustainable development in Africa – it should assume its responsibility as a global standard-setter, sending a clear signal discouraging the deployment of high-carbon technologies like tar sands before they are “locked-in” and start producing for the European market.
It can do this, by ensuring that the Fuel Quality Directive takes into account the real carbon footprint of tar sands and not to give in to the Canadian pressure and by not giving any other political or financial assistance to tar sands developments.
Assistant Editor
Alberta Oil Magazine
said: On 11/07/2011
The question is less a matter of what role should oil sands-derived crude play in the global energy mix. Close observers might more appropriately wonder: what role is the resource already playing? For the oil majors especially, bitumen is too tantalizing a prize to ignore. Because the resource is mined, there are no exploration costs and thus no dry holes. Political risk is nil. Alberta has been governed by the same party for 30 years; the province is unlikely to erupt in civil war or nationalize anyone’s oil property, unlike Venezuela, whose vast Orinoco belt rivals the ribbon of bitumen that lies trapped underneath northern Alberta’s boreal forests and muskeg for heavy oil bragging rights.
In the eyes of ExxonMobil, Shell, Chevron and the rest, the resource’s significance is material. Shell recently marked a 100,000 barrel per day expansion at two mines it has partnered on with Chevron and Marathon. Its Athabasca Oil Sands Project now delivers some 255,000 barrels of oil every day to a refinery complex just north of Edmonton, Alberta’s provincial capital. The total is a hefty eight per cent slice of its daily oil production of 3.1 million barrels of oil equivalents. Exxon, via its role in the Syncrude Canada consortium, itself the second-oldest operator in the region, currently produces more than 200,000 barrels from the sands each day, or about five per cent of its 4.8 million barrels of daily global output.
So the group of companies pejoratively known as Big Oil is already here, producing vast quantities of oil. As writer Steve LeVine wrote recently in Alberta Oil magazine, the oil sands – the largest chunk of Exxon’s current slate of 1.6 million barrels in new projects planned over the next five or so years – serve much more than a narrow geostrategic interest. LeVine notes, “For Exxon, Shell and the others, the resource offers salvation from another bane of oil drillers – production decline, an annual average drop of six per cent to eight per cent in a field’s productivity that sets in immediately once extraction begins.”
None of this is to suggest that the development of the oil sands is without controversy. As many in this forum have noted, a growing legion rejects the notion that the carbon-heavy oil sands, the second- or third-largest deposit of oil on the planet behind Saudi Arabia, must be developed simply on account of their geographic and geologic advantages. The point is: the oil companies, in spite of their assurances that greenhouse gas emissions can be cut and the environmental footprint of operations can be reduced, don’t seem at all bothered by the objections. They are rapidly advancing growth projects, financed in large part by the Asian debt and equity markets.
Arguably a greater threat to the role oil sands will play in the short-term is the resurgence in U.S. domestic oil production – the light, conventional stuff – currently underway. Production from the North Dakota Bakken formation is forecast to hit 700,000 barrels daily as part of an overall jump in supply that sees daily conventional onshore production in the U.S. – by far the largest market for Canadian crude – peaking at no less than 3.9 million barrels by 2025. Like the oil sands, much of that growth potential hinges on access to markets and the timely construction of transportation infrastructure – that is, pipelines. As the International Energy Agency has noted, as much as one million barrels per day of new supply projected to come on stream by 2016 could be at risk unless outlets to new markets – whether to Asia-Pacific countries or the U.S. Gulf Coast – are built.
Back in March, some 900 delegates from 30 countries descended on Edmonton for the World Heavy Oil Congress. The international presence did not surprise those who follow the business. One of the speakers at the event, Kamel Bennaceur, chief economist of global service giant Schlumberger Ltd., carried with him an optimistic message – for the attendees if not for those on the other side of the debate. With a series of slides to illustrate his point, he predicted heavy oil’s share of global crude supplies will jump to 16 to 20 per cent by 2030 from about six per cent today. “The lion’s share would come from Canada,” he said, but the Middle East, Asia and Venezuela would also contribute to the total. The optimism was palpable. “There is a very bright future for this industry,” Bennaceur said.
Director of the International Program
Natural Resources Defense Council
said: On 12/07/2011
An important part of energy security is breaking our dependence on oil and moving forwards to clean and renewable energy. However in recent years, for Canada, energy has meant promoting the dinosaur of tar sands oil – even to the extent of undermining efforts by other countries to build a clean energy future.
One of the oddest aspects of the Canadian push for expansion of the dirty and destructive tar sands oil is how it has caused Canada to turn away from its past commitments to fight climate change. At a time when the world is increasingly suffering from climate change, Canada claims that it cannot afford the “luxury” of doing what is right for the environment in the face of its desire to rapidly expand the tar sands oil industry. Canada is not only pushing a fuel of the past, it is pushing arguments of the past. Canada does this in the face of a deepening global consensus that clean energy is the path for economic as well as environmental well-being.
The real story of tar sands is one of rising greenhouse gas emissions, Boreal forest destruction, vast dams of toxic waste waters, and concerns about rising cancer rates in downstream Aboriginal communities. However, even if we could wave a magic wand and clean up the tar sands themselves, we’d still be left with a continuation of our dependence on ever more expensive and harder to access fossil fuels. The solution is to stop our addiction to oil by increasing fuel efficiency standards, building smarter transportation solutions, and moving towards the power of wind and sun for our transportation needs. With these solutions in place, we could save far more oil than tar sands expansion will produce.
This fundamental changing of a wild Boreal landscape from delicate bogs, fens, and marshes to open wounds is symptomatic of what oil companies are willing to do to feed our dependence on fossil fuels.
So what’s the problem? Why isn’t reducing our oil consumption something that politicians across the board are shouting about? Unfortunately the answer lies in part with the tremendous pressure that the oil industry exerts every day on our politicians. Now is the time for the oil industry to step up to the plate and become a clean energy industry. This would push all of us forwards into a more secure world where we did not depend so heavily on fossil fuels and where going after dirtier, riskier and more expensive forms of fossil fuels such as tar sands would be a thing of the past.
Managing Director
High Commission of Canada
said: On 12/07/2011
Ours is a world that runs on energy. Most of that energy comes from hydrocarbons, which will continue to be a major energy source for many decades to come. As a world leader in energy production, Alberta is committed to addressing the many challenges of developing hydrocarbons in an increasingly carbon-constrained world. We continue to further our advancements in clean energy production, while reducing our environmental footprint and remaining an important contributor to world energy supply.
Demand for energy will continue to grow. The International Energy Agency (IEA) predicts that global demand for energy will increase 36 per cent by 2035. Much of this growth is a result of increasing demand in developing countries, particularly India and China.
While renewable and alternative energy sources will play an increasingly important role to play in our future energy mix, the world will continue to rely on fossil fuels for some time. In fact, according to the IEA, fossil fuels will maintain a central role in our energy future, making up 74 per cent of the primary energy mix in 2035, with global oil production reaching 99 million barrels per day, an increase of almost 18 per cent from 2009.
Alberta will continue to be a large contributor. With more than 170 billion barrels of oil that is economically recoverable with today’s technology, Alberta is home to the third largest proven reserves in the world. To put that into context, only 21 per cent of the world’s proven oil reserves are readily accessible to private development and not controlled by the state. About 53 per cent of those open and accessible reserves are in Alberta’s oil sands. Furthermore oil produced in Alberta is heavily regulated by a democratic and transparent Government that takes its environmental and societal responsibilities seriously.
Alberta is home to a government that has strict legislation in place that protects our land, air and water as we continue the responsible development of energy. We were the first jurisdiction in North America to require large industries such as oil sands to reduce greenhouse gases; we have legislation in place that requires industry to reclaim every inch of land that is disturbed by oil sands development so it’s productive again; and we have allocated $2 billion for projects that deliver carbon capture and storage technology. Once fully developed, it’s expected that these projects will reduce Alberta’s greenhouse gas emissions by five million tonnes per year beginning in 2015.
So what will be the role of oil sands in the energy mix of the future? Oil sands production is forecast to be an important contributor to the world’s energy supply, helping to meet growing global demand. It will continue to be a source of energy from a region where the government is open and democratic, and the investment climate is safe, stable and secure. With the commitment to innovation and technology demonstrated today by both industry and government, it will be a cleaner, more environmentally friendly resource that will help maintain our high quality of life, as well as the pursuit of an improved standard of living for those in countries that are still developing.
Director
Global Oil, IHS CERA
said: On 13/07/2011
In 2010, production from the Canadian oil sands averaged 1.5 million barrels per day. About 1.1 mbd of this crude oil was exported—close to the amount of crude oil exported from Libya before the civil war. The Canadian oil sands are an important component of global oil supply with the potential for much more growth.
On the topic of oil sands and GHG emissions, the gap between the life-cycle GHG emissions of oil sands and other crudes is not as large as sometimes portrayed. To evaluate the life-cycle GHG intensities of various crude oils, IHS CERA conducted a meta analysis of 12 publicly available studies and found that, on average, products derived wholly from oil sands result in GHG emissions that are 10 to 20 percent higher than the emissions estimated for the average EU crude. Oil sands products are in the same GHG intensity range as current European imports from Venezuela, Angola, and Nigeria and crudes produced using steam-assisted oil recovery from the Middle East.
Bitumen—the oil in the oil sands—is too thick to transport in its pure form. Therefore, in the hypothetical case that oil sands are imported into Europe, they would be shipped as a blend of bitumen and lighter, less carbon-intensive hydrocarbons or as synthetic crude oil. When this is taken into account, the average oil sands product likely to be imported has life-cycle GHG emissions 11 percent higher than the average EU crude oil.
The EU draft proposal for reporting life-cycle emissions for its LCFS assigns one fixed GHG-intensity value for all fuels produced from crude oil—except for Canadian oil sands. The life-cycle value assigned to oil sands is 23 percent higher than the default value for all other crudes – higher than the results from our analysis.
To download the IHS CERA paper “Oil Sands, Greenhouse Gasses, and European Oil Supply: Getting the Numbers Right” – April 2011, as well as other IHS CERA oil sands research, please visit www2.cera.com\oilsandsdialogue
Events developer & co-ordinator
European Voice / Comment:Visions
said: On 14/07/2011
European Voice’s Simon Taylor reports that the European Commission is still divided over the impact of oil from tar sands on the EU’s efforts to cut greenhouse gases.
“The Commission launched an inter-departmental consultation last month on a proposal that would assign a higher CO2 emissions value to oil from tar sands than for fuel from conventional oil.
The values are needed for implementation of the EU’s fuel-quality directive. The directive requires a 6% reduction in CO2 emissions during the refining process. Knowing the value of each fuel type is necessary to calculate the reduction needed.
But the proposal to assign a separate value for tar sands has been opposed by three European commissioners: Günther Oettinger (energy), Antonio Tajani (industry) and Karel De Gucht (trade). A compromise will be sought by members of commissioners’ private offices later this week.”
Read Simon Taylor’s latest article on tar sands on: http://www.europeanvoice.com/article/imported/split-over-emissions-from-tar-sands/71624.aspx
Vice President, Oil Sands and Markets
Canadian Association of Petroleum Producers, CAPP
said: On 18/07/2011
Canada’s oil sands producers believe oil will play a pivotal role in meeting global energy needs for several decades, a view shared by several contributors to this conversation and auspicious organizations such as the International Energy Agency and the U.S. Energy Information Administration.
Even “off oil” activists recognize people can’t simply stop using fossil fuels overnight. But some argue Canada’s oil sands should not be developed – they urge the world to ignore the third-largest oil reserve on the planet – and unlike the oil industry, they offer no realistic alternatives to meet growing global energy needs.
Canada’s oil sands industry takes a balanced approach to energy security and reliability, economic growth and environmental performance. Our goal is to ensure we continue to develop oil sands responsibly, including continuous improvement in environmental and social performance.
The IEA’s 2010 “new policies” scenario predicts worldwide energy demand will increase by 36 per cent between 2008 and 2035, with more than 90 per cent of the growth coming from China and India. Although demand rises more slowly in the United States, the U.S. remains the world’s second largest energy consumer. Fossil fuels meet the bulk of demand and remain the dominant energy sources at the end of the forecast period. By itself, oil provides 28 per cent of the energy mix, down just five per cent from 2008. Over the same time period, the forecast predicts energy from renewable sources doubles to about 14 per cent.
It’s clear the world will continue to need all forms of energy and Canada’s abundant oil sands reserves are a big part of the solution to our energy challenge.
Technology and innovation will enable more development of the oil sands, with a reduced environmental footprint and at a lower cost. Oil sands production will reduce North America’s need for foreign-sourced oil and those supplies will help meet demand in other parts of the world. Depending on the pace of development, there is also an opportunity for oil sands to play a direct role in meeting the needs of other markets via offshore exports from Canada.
All industries impact the environment – including development of fossil fuels and renewable energy – but oil sands impact is being be managed, reduced and ultimately reversed. The evidence is readily available, just beyond the anti-oil sands rhetoric.
Growing oil sands production must be reconciled with the expected transition to a lower carbon energy system and Canada’s international commitments. These issues are best dealt with in the broader context of global energy systems, rather than solely with respect to the oil sands.
While Canada’s oil and gas industry doesn’t oppose carbon reduction policy, well-designed policy is an important enabler, there must be emissions reduction opportunities available to producers, transporters and consumers of energy at a reasonable cost. GHG-reduction technology development and deployment must be a key priority for industry, governments, academia, research institutions and other organizations.
A good example of poorly designed policy can be found in proposed measures related to GHG emissions from Canadian oil sands now being contemplated in the European Union. Although oil sands GHG emissions are in the same range as many other crude oils being used in Europe, the European Union has included draft language in is Fuel Quality Directive that discriminates against Canadian oil sands.
The proposed policy inappropriately singles oil sands when it is apparent the oil is similar in carbon footprint to other global heavy oils and conventional oils produced with associated flaring of natural gas. The Canadian industry has been active in trying to remove this discrimination. A decision is expected later this year.
In Canada, oil sands producers continue to take action on a major scale to reduce “on the ground” GHG emissions associated with operations. These initiatives are good business – they lower capital and operating costs and reduce environmental impacts. Our objective is to be as good or better than competing supplies in the world market.
And we’re making considerable progress. According to a 2011 analysis by IHS-CERA, oil sands crude is about 11 per cent more greenhouse gas intensive than the average light European average crude supply on a wells-to-wheels basis. This figure is significantly lower than often-quoted figures for oil sands crude. Additionally, oil sands crude will be competing with heavier crudes over time, as the world’s oil supply continues to shift steadily from light, conventional oil to heavier, unconventional supplies.
Examples of oil sands environmental performance to date include a 29 per cent reduction since 1990 in GHG emissions per barrel of oil produced, increased use of recycled or non-potable water, reduced surface disturbance and the development of game-changing technology for settling pond reclamation.
New and emerging technological innovations will continue to improve environmental performance. Examples include processes that combine naturally occurring hydrocarbons with steam to improve oil recovery rates and reduce GHG emissions per barrel; technologies to process bitumen and remove the heaviest hydrocarbon components on-site and non-aqueous extraction techniques to reduce or eliminate the need for water and settling ponds.
Further, climate policy initiatives are already in place in some jurisdictions in Canada, including Alberta, where the oil sands are primarily located, and where industry must reduce its GHG emissions by 12 per cent or pay a price on carbon of $15 per tonne under Alberta legislation – comparable to the price paid under Europe’s current carbon trading regime. The revenue accumulates in a technology fund earmarked for reinvestment in GHG reduction-related solutions such as carbon capture and storage and efficiency advancements.
What role should oil sands play in the world’s future energy mix? That conversation is over – oil sands cannot be viewed in isolation from the expanding global energy system.
The conversation must be about a balanced approach to energy security and reliability, economic growth and environmental performance – all are important.
While we acknowledge the “off oil” position advocated by some groups is rooted in deeply held views regarding the need to reduce GHG emissions through reductions in production and use of hydrocarbons, we must be realistic about the pace and scope of transition to a lower carbon energy system.
We recognize the growth potential of other sources of energy, along with the ongoing need for hydrocarbons and the increased environmental performance of fossil fuel production that is enabled by technology and innovation.
Senator
Parliament of Canada
said: On 18/07/2011
As previous comments demonstrate, even a seemingly simple question such as “what role will the Canadian oil sands play in the world energy mix?” instantaneously ensnares thoughtful observers in such a spider web of issues that it is nearly impossible to frame a comprehensive, yet concise, response. That fact alone should alert us to the reality that we are engaging in a debate that is anchored in a cascading hierarchy of competing values.
If, for example, one considers market forces alone then one is likely to respond quite enthusiastically by predicting a golden future for oil sands production. An ever-increasing appetite for cars, trucks and various levels of manufacturing activities in Asia and other parts of the world will definitely create a convincing demand for more and more gasoline, diesel and fuel oil. The Canadian oil sands can easily feed that demand. We can even do so with some justification – Canada is, after all, a relatively secure, stable and respectable oil-producing jurisdiction. In addition, for many Canadians the oil sands are an important source of income to both individuals and commercial concerns from one side of the country to the other. So, from a purely economic point of view, we can happily say the oil sands will play a significant role in supplying the world’s energy requirements for decades to come.
But economics is never the only point of view thoughtful Canadian and other observers bring to bear when we debate the future of the oil sands. A spokesperson for the UK Tar Sands Network perhaps said it best when she recently told the Petroleum Economist that the oil sands issue “isn’t as black and white as we thought.”
First there is the question of responsibility for immediate local health and environmental consequences to oil sands development. Secondly, we have a responsibility to future generations – can the environmental consequences be sufficiently mitigated so as to leave fully functioning ecosystems behind once the developments are finished? Thirdly, what is the extent of our responsibility for global consequences? Are we entitled to deny the benefit of our resources to people aspiring to a higher standard of living in other parts of the world or can we find a way to deliver the resource in a manner that does not unduly burden the planet with additional greenhouse gas emissions?
Albertans are slowly coming to terms with the complexity of all these issues, and beginning to take significant steps towards finding a judicious balance between resource development and long term impacts. The Alberta government has dedicated $2 billion to funding carbon capture and storage projects, for instance, initiated another multi-million dollar fund devoted to perfecting new and greener energy technologies and practices, and actively supports Carbon Management Canada, a university-led research network of excellence focused on a clean energy future. It also established an independent panel of experts for the purpose of developing recommendations for a world class environmental and health monitoring system. The panel, which reported out in June 2011, has advocated setting up an arm’s length, stand alone Environmental Monitoring Commission that would ensure a state of the art data collection regime and a transparent reporting system that would allow public access to all data. Hopefully the government will accept the panel’s recommendations with alacrity. In addition, the Premier’s own blue ribbon council on Shaping Alberta’s Future has strongly urged the government to begin banking the bulk of its resource revenues, and to develop a Global Energy Centre that would galvanize both Canadians and others around the world in making a successful transition to a highly energy productive, carbon constrained future.
On balance, I am inclined to agree with Jeremy Christopher Carl of Stanford University who earlier commented that the oil sands will play a significant role in helping supply the world’s energy needs, at least in the near term. However, much remains to be accomplished before we can justifiably claim that we have discharged all our responsibilities. I, for one, welcome the encouragement we receive from observers such as Satya Das here at home and countless others in the international community – their thoughtful contributions to the debate will continue to spur us on to achieve a better future for all of us.
Professor of Peace and World Security studies
Hamshire College
said: On 19/07/2011
First, let’s stop talking about the bitumen deposits in Canada and elsewhere as “oil.” They’re not oil.
Call them bitumen if you want, or heavy oil, or tar sands, or even oil sands, but not oil.
Calling them oil gives the impression that there is a vast reservoir of liquid gold just waiting to be pumped from the ground and shipped to eager consumers around the world. But nothing could be further from the truth.
Bitumen is a late-stage form of petroleum that remains in the ground when lighter petroleum fluids have evaporated or been consumed by bacteria. It cannot be pumped from the ground but must be mined, like coal, and can only be made into a usable liquid through a costly, energy-intensive, environmentally-damaging process. You would never choose to exploit this unappealing, third-rate resource unless you were desperate for a fresh fix of oil when all other, more desirable supplies of the stuff had already been exhausted.
Let’s face it. We have become addicted to oil, and tar (oil) sands have become our last desperate source of supply. If we didn’t tap into the tar sands – and other “unconventional” supplies like deep-offshore, shale, and Arctic oil – we would be facing the end of the Petroleum Age and taking urgent, vital measures to transition to the Post-Petroleum Era of wind, solar, and other alternatives. By turning to the unconventionals, we merely postpone the inevitable while accelerating the heating of the planet.
Yes, I know that this transition cannot occur overnight. But adding some 3-5 million barrels per day from Canada’s oil sands will not really help ease this transition and will only make it much harder, as it will massively boost Canada’s greenhouse-gas emissions. This is not a prudent strategy.
Alberta is at a turning point. It has exhausted most of the bitumen accessible through open-pit mining, and must now turn to more costly, resource-intensive “in-situ” production, involving the extraction of bitumen from formations too deep to exploit using conventional techniques. This will require heating water to make steam – a wasteful use of energy – and will pose a threat to the safety of Alberta’s water supplies.
Stopping bitumen production at this point, before further harm is done to Alberta’s environment, would be a smart decision and help speed the transition to a more benign, post-petroleum future.
Managing Director
GSW Strategy Group, LLC
said: On 20/07/2011
With regard to Professor Kare’s reference to oil addiction, it’s important to understand the sources of that addiction, which is similar to our “addiction” to things like steel and electricity. So far, nothing has topped oil’s convenience as both energy source and energy carrier. It beat its early 20th century competition because of its high energy return on energy invested and its high delivery of BTUs per gallon. It also contains a cornucopia of useful chemicals. We have lots more options today, but most still fall short of being able to match oil on these criteria. If that weren’t true, the prospect of global oil output failing to keep up with potential demand for various reasons wouldn’t be so alarming.
Although fuels derived from oil sands still provide most of oil’s benefits, they require considerably more energy to produce than many other sources of petroleum, so their energy return on energy invested is lower. Despite that, it’s still higher than corn ethanol’s skimpy 1.6:1 or 2:1 return.
Oil Sands Program Director
Pembina Institute
said: On 26/07/2011
This question can only be answered by considering two separate elements. First, the often cited oilsands industry projections of oilsands growth potential need to be tempered with a realistic assessment of what level of unconventional oil development is consistent with achieving international greenhouse gas reductions. Second, we need to frankly acknowledge what level of oilsands development is reasonable considering growing non-greenhouse gas related environmental and social constraints emerging on the ground in Canada.
To start, it’s worth considering the forecasted numbers for bitumen production. In 2010, oilsands production stood at 1.5 million barrels per day (mbpd) with the existing capacity to produce 1.9 mbpd. This number is quickly dwarfed when you factor in projects that are in construction (2.3 mbpd ), those projects the regulators have already granted approval for (4.1 mbpd) and finally those projects that have been announced (6-8 mbpd ). The projects that will comprise this growth are largely based upon the application of tried and tested, but energy and carbon emission intensive, extraction technologies. It’s hard not to imagine that the quadrupling of production won’t equate the quadrupling in environmental impact.
On the other hand, IEA’s 2010 World Energy Outlook’s “450 Scenario,” would see Canadian oilsands production reach only around three million barrels per day by 2035. This growth is premised upon the introduction of new technologies and policies that will reduce the emissions intensity of the industry.
It’s hard to disagree with the data coming from the International Energy Agency (IEA), and the commentary by Keith Stewart of Greenpeace that show the role of oilsands in the energy mix is directly and inversely related to the seriousness of the world in addressing greenhouse gas pollution. In a world where little progress is made in addressing worsening climate change, the oilsands prosper, while under a policy scenario where countries meet science-based obligations to reduce greenhouse gas pollution, and avoid the worst impacts of climate change, growth in oilsands development is much more constrained. We encourage all commenters to not misuse IEA’s scenario of continued climate policy inaction as a projection of the role of oilsands in the energy mix.
The oilsands represent a high-cost, marginal source of oil and unfortunately neither Alberta nor Canada have implemented the necessary regulations to demonstrate how oilsands expansion is consistent with meeting Canada’s fair share of GHG reductions globally. Basing a business-as-usual growth plan on a scenario that would result in “massive climatic change and irreparable damage to the planet” is both risky and irresponsible. Business as usual growth counters the recent report to Alberta premier Ed Stelmach, where a blue ribbon panel recommended that the province should plan for a transition away from export dependency on the oilsands, given increasing concern over their environmental impact. The number of voices calling on Alberta to plan now for a transition away from the oilsands given the low carbon direction the world is going in is rising.
While rightly, the greenhouse gas emissions associated with oilsands development have received a lot of attention in this forum, there are certainly other environmental factors will also impose significant limits on oilsands development and indicate that industry and government projections of oilsands growth in Canada are likely both unrealistic and incompatible with other aspects of Canadian law and the interests of Canadians. As science based ecological limits to protect air and water quality, wildlife and biodiversity are implemented it could well be that something less than three million barrels per day is tolerable.
An example of a looming non-climate related constraint are Alberta’s woodland caribou, a threatened species that is required to be protected under Canadian law. Virtually all threatened woodland caribou herds in Alberta are in decline as a result of too much development within their ranges. Canada’s Minister of the Environment has noted that Alberta has been ineffective at protecting caribou and managing cumulative effects of development. For an overdue but apparently imminent federal recovery plan to be effective, it will need to place serious limits on the pace and scale of future oilsands development. Pressure is increasing to enforce similar limits to protect water quality and quantity and many of Canada’s First Nations are forcefully arguing (and using legal means) that oilsands development must be moderated to respect their Treaty Rights to hunt, trap and fish on their traditional lands.
There are solutions to some of the unresolved impacts of oilsands development. We outline 19 policy proposals in our recent report Solving the Puzzle: Environmental Responsibility in oilsands development (http://www.pembina.org/pub/2210). The consistent theme of our research is not only must oilsands development meet higher performance standards, but that responsible oilsands development means respecting science-based environmental limits. Since many of these environmental objectives have not yet been set by Alberta or Canada, it is premature to speculate if greatly expanded oilsands production is possible or desirable.
Chief Economist
American Petroleum Institute
said: On 26/07/2011
Oil sands will play a role in the world’s energy future because they will have to. World energy consumption is projected to grow nearly 50 percent by 2035. The future is going to require a lot of energy, of all kinds. In fact, the U.S. Energy Information Administration (EIA) projects that in 2035, oil and natural gas will still supply about 55 percent of our energy.
As turmoil in places like Libya sends crude prices rising, Americans are becoming more concerned about energy security. But with the right policies, by 2030 America can get 92 percent of its liquid fuel from sources in the U.S. and Canada. The Canadian oil sands are a vital part of that plan.
By 2030, Canada can supply the U.S. with 16 percent of its liquid fuel needs. Already, Canada sends more than 99 percent of its oil exports to the United States—the bulk of which goes to Midwestern refineries. By getting more oil from Canada, Midwest refineries would move from the back of the crude oil supply line to the front—making them less vulnerable to supply disruptions caused by geopolitical upheaval or storms in the Gulf of Mexico.
Canada is the number-one supplier of imported oil and natural gas to the United States, according to the EIA. Of the Canadian crude oil brought into the U.S., approximately half is derived from oil sands. According to a study released in May 2009 by the Cambridge Energy Research Associates, if oil sands development is maximized, Canadian oil sands could provide more than 40 percent of total U.S. oil imports by 2035.
Canadian oil reserves are second only to Saudi Arabia, using current technological assessments. According to the Canadian Association of Petroleum Producers, oil sands now account for more than half of western Canada’s total oil production.
Oil sands development will also boost the economies of both the U.S. and Canada. A recent study shows that full production of the oil sands would support more than 500,000 U.S. jobs. A Canadian Energy Research Institute report shows that full development of the oil sands could create more than one million new jobs in Canada.
The benefits of oil sands development do not fall to just one industry or any one region in the U.S., but are broadly shared across many industrial sectors and regions.
Investments are being made to build new pipelines and expand refineries to transport and process Canadian oil. As oil sands production and investment rises, the demand for U.S. goods and services also increases, adding an estimated $34 billion to the U.S. Gross Domestic Product in 2015 and $42.2 billion in 2025.
The U.S. isn’t the only nation that sees the value of this resource. China is showing interest in Canada’s vast oil sands, and that’s why America’s oil and natural gas industry wants the U.S. government to approve TransCanada’s Keystone XL pipeline project, which will provide a direct link from the oil sands to American consumers. Public polling shows that 85 percent of Americans support full development of the oil sands.
Canada will develop this resource. At $100 a barrel, the oil sands reserves are worth at least $17 trillion. Shipping it to the U.S. through the Keystone XL pipeline would create fewer emissions than shipping it to China.
Given the world’s need for petroleum fuels – both now and in the future – there’s no question that oil sands will be part of that mix. Given the promise of jobs and economic growth that oil sands will produce, we are urging the administration to put in place policies that make sure oil sands become a vital part of the United States’ future energy mix.
Managing Director
L Investments
said: On 28/07/2011
Oil sands and heavy oil production are essential to meeting global energy demands. According to the International Energy Outlook world energy consumption is projected to increase 49% from 2007 to 2035. To meet global demand all sources of energy production will have to grow dramatically including light oil production, heavy oil production, nuclear energy, coal, CTL, GTL, renewables, natural gas, as well as alternatives such as electric vehicles and wind energy.
The world oil supply has peaked, consumption from the emerging markets of China and India is increasing while the new discoveries of conventional oil have been decreasing. There are different estimates of conventional proven oil reserves ranging from 400 billion barrels to 1.3 trillion, which would equate to a 14 year or 43 year supply of oil. For geopolitical and economic reasons OPEC producing countries have been incentivized to overstate reserves (in order to produce more under OPEC quotas) so we think the actual number is closer to the lower estimate. Thus the production of unconventional oil reserves such as heavy oil are needed to come online in order to meet global energy demands.
The production of tar sands comes with a high cost, both financially and environmentally with production about 3 times as carbon intensive as conventional oil production, and the environmental pollution in the tail ponds often leading to high levels of mercury, arsenic, lead and other contaminants creeping into rivers and waterways near tar sand production sites. There is also air pollution and carbon dioxide emission.
About 6 years ago I led an effort by our office with the gameplan to buy heavy oil reserves throughout the United States. At the time we evaluated acquiring heavy oil both in Utah, Texas and elsewhere onshore in the US. We had identified, analyzed and submitted bids on heavy oil fields with a few billion barrels of reserves and with very similar characteristics in terms of API, and oil quality as the Opti Canada/Nexen field in Canada. However the challenge was knowing with certainty that we could get the environmental permits, and then that the environmental impact would not be devastating to the surrounding area. In highly populated areas like Utah and Texas using conventional SAGD technologies we found the prospect of acquiring, and producing the heavier oil such as 2 API oil would have been a challenge using conventional existing technology and given the environmental impact. Bottom line is we shelved the project, as we could not stomach the potential environmental liability. As such Genoil, an energy tech company we have both funded and developed which has a heavy oil hydroconversion upgrading technology (which is much less polluting than conventional coking methods of upgrading heavy oil) also has environmental technologies and oil water separation technologies that separate oil from water and help clean up and prevent environmental pollution. Governments have and will continue requiring oil companies to become socially responsible and invest in clean up technologies and efforts.
Many of the heavy oil projects that are economically and environmentally viable right now are in more remote and less populated areas either in Alberta, Canada or Siberia, Russia. Governments, as well as environmental groups are constantly monitoring pollution from tar sands projects and measuring the cost benefits. The contaminated dovetails can be cleaned up and governments have been working with oil producers to ensure a cleanup of the pollution created, especially after reports that birds in the area were dying after swimming in the polluted waters.
The bottom line is we need oil sands projects to come online aggressively to meet global energy demands and unless most of the world wants to go back to riding camels and horses rather than automobiles and planes the world needs to be cognizant of the environmental impact oil sands production can have and work to minimize the impact to water (which many oil producers have done with water recycling and cleanup efforts) and reduce the CO2 emissions (which many tar sands producers have started to do with carbon capture and storage programs whereby the CO2 emissions from their heavy oil projects are captured and stored underground). Driving a car pollutes the environment more than riding a horse but most people would still prefer to drive their car than ride the horse. As such the public must not blame the oil producers for polluting the environment but must realize that our lifestyle choices make us all collectively responsible and that in a developed society we are all working to achieve the global balance of environmental harmony while satiating the world’s thirst for oil.
Author/Journalist
Self
said: On 28/07/2011
The answer to that question lies in assessing the true cost of the extraction of bitumen. I don’t mean here the cost of excavating, refining, shipping, or labor costs. I mean those things the companies refer to as externalities. Much energy production has costs that are passed on to the world at large, and not figured in to the companies’ costs and benefits. What is the cost to the world of the additional carbon that is released? What is the cost of the toxic waste that has escaped into the Athabasca River and into the air? The cost of lost opportunities, where people can no longer fish or hunt or undertake sustainable types of resource extraction? What is the value of the ecosystem services lost from the destruction of many square miles of boreal forest? What types of subsidies is the Canadian government providing? Until a thorough, more expansive accounting is done it’s really hard to know what role these tar sands should play.
Assistant Administrator, Environmental Practice Specialty
American Society of Safety Engineers
said: On 17/11/2011
When oil sands can be utilized for petroleum production in an environmentally sustainable way, they will play a critical role in North American energy independence. There are areas where disruption of critical ecosystems will cause this to not be feasible, and in such areas the oil sands should be left undisturbed. There are other areas where the areas may be recovered and then restabilized with native vegetation, creating areas of future wildlife preservation and conservation in the process. Leaving a large unrestored mining hole in the ground is not an option, as we found out in our early days of strip mining for coal. Now many of those restored strip mining areas are forested and rolling hills, filled with wildlife. Sadly, not all areas are restored, and the legacy of badly managed mine waste is still a problem in many areas. The cost of production must include cleanup and restoration.
The current unstable geopolitical condition of middle east oil production dictates that is is imperative to develop North American energy independence that is done in an environmentally sensitive way. One of our greatest presidents, Teddy Roosevelt, the founder of our pristine national parks systems, was an avid preservationist, conservationist, hunter, and advocate for exploration. He said, “there are some areas that must be preserved, some areas must be conserved, and some areas must be utilized.” This is a good balance.