ReturnToTheTarSands

The following report was released by WWF-UK in the summer, but for some reason this is the first time I see it. And quite honestly, this one blows my mind. Let me summarize: The government of Canada is putting in new regulations to “cap” and reduce the GHG emissions from industry. Except that this “cap” actually only requires that the industry reduce the GHG emission INTENSITY of their operations (i.e. the amount of GHG emissions per unit of production - not their total GHG emissions). In the case of the tar sands what this means is that the industry can continue to expand rapidly in production and therefore in total GHG emissions, as long as it becomes progressively better at reducing the GHG emissions for each barrel of oil it produces. In other words, the GHG emissions will continue to go up and continue to screw the climate, threaten life on earth etc.

Now, get this. It turns out that oil companies can actually make a lot of improvements in reducing their GHG emission intensities. So much so that they can begin to sell a whole bunch of intensity-based “credits” to other sectors of the economy under the new regulations. The report estimates somewhere in that $300-700 million! So, the oil companies can become even richer under regulations that are supposed to force them to reduce GHG emissions, while in fact increaseing their GHG emissions.
Is it just me or is this incredible!??!

See http://www.wwf.org.uk/filelibrary/pdf/oilsands_report.pdf for full report.

Carbon-crazed Canada on course to fail Kyoto
Wednesday 6 June 2007
Canada will fail to achieve its Kyoto targets due to the proposed expansion of its oil sands resources in Alberta, according to a new report from WWF. We are calling for a moratorium on further expansion of oil sands production and for oil companies to produce ‘decarbonisation’ strategies.
The report, Climate change policy and Canada’s oil sand resources, was commissioned by WWF from the Tyndall Centre for Climate Change Research. It reveals that CO2 emissions generated through oil sands production will double by 2012, whereas they need to be halved.

“As the G8+5 nations meet today, Canada will have to explain its failure to deliver on its Kyoto commitments,” said James Leaton, WWF-UK’s Oil and Gas Policy Officer. “Oil sands production generates three times as much greenhouse gas as conventional oil production and is Canada’s fastest growing source of greenhouse gas emissions. Governments should be setting frameworks to deliver low-carbon economies rather than increasing carbon footprints.”

The Canadian government has proposed mandatory CO2 intensity targets for oil sands which consist of reducing emissions by 15% from a 2006 baseline to 2012. However there is no limit on the amount of production, and the analysis shows that if the projected expansion of production occurs, greenhouse gas emissions will more than double during this period. There will be no stabilisation of greenhouse gas emissions from oil sands.

Additionally, the report calculates that oil companies could actually make money under the new target system. The inadequacy of the intensity targets creates a perverse subsidy, which means that industry could make between C$300-700 million from selling emissions credits, just by delivering planned efficiency improvements.

Julia Langer, Director of Climate Change, WWF-Canada, said: “The government must devise economic mechanisms which actually deliver meaningful cuts, not give the oil sector a bonus.”

Another element of the government’s plan is a Climate Change Technology Fund, which companies can pay into if they don’t meet the intensity targets. The C$15-20 charge per tonne of carbon would only result in an insignificant C$0.05 cost per barrel of oil. (Oil is currently trading at over $60 per barrel.) With the weak targets not being a challenge to meet, there are not likely to be significant funds, yet the problem of climate change will be far from solved.

Technology to deliver absolute emissions reductions needs to be in place before expansion, rather than allowing expansion in the hope that one day an empty fund may produce some useful research.

Surface impacts of oil sands production include roads, pipelines, open pit mines, processing plants, and tailings ponds. Species such as woodland caribou are expected to be locally exterminated. Oil sands require from 2 to 4.5 barrels of water to produce a barrel of oil. Communities downstream from the water stored in enormous toxic tailings ponds are already experiencing water contamination and lower river levels.

Filed under: Climate Change, Commentary, Environmental Justice, TTTS on October 23rd, 2007