Emissions cap might not be hit by 2036, study says
While federal pipeline approvals have stoked fears Alberta’s oilsands will grow unabated to the environment’s peril, new research suggests producers will not hit a legislated emissions cap in the next 20 years.
The Canada Energy Research Institute concluded in its latest report the oilsands will pump out an estimated 3.4 million barrels of oil per day in 2020, rising to 5.5 million barrels by 2036, according to its middle-of-the-road forecast.
Without new technologies to cut emissions intensity, the institute found the oilsands will hit the government-imposed, 100 megatonne emissions cap by 2026. In 2015, total emissions were 70 megatonnes.
A future report, expected in the coming weeks, will forecast the industry could avoid hitting the cap within the 20-year forecast period by adopting available technologies, said Dinara Millington, the institute’s vice-president of research.
“We can still grow our oilsands production without having a tremendous impact on the environment with GHG ( greenhouse gas) emissions,” said Millington, whose group is an independent, non-profit funded by industry, government and the University of Calgary.
When Premier Rachel Notley announced the cap along with the rest of her government’s climate change agenda in late 2015, she was flanked by top executives at Canadian Natural Resources Ltd., Suncor Energy Inc., Shell Canada and Cenovus Energy Inc.
Steve Laut, president of Canadian Natural, told Herald columnist Chris Varcoe the following summer there’s a “good chance” the oilsands will never reach the cap, “because technology will reduce the intensity as we go forward.”
Environmental groups have raised doubts the provincial and federal government can meet emissions targets while Ottawa green-lights new energy pipelines, including the expansion of Kinder Morgan’s Trans Mountain line to the B.C. coast.
Millington said her institute’s production forecasts are based on the capacity of existing and new projects on the books, taking into account construction timelines and potential delays.
“Even in the highest-growth emissions case in the next report, we’re not reaching that 100 megatonne cap,” she said.
Simon Dyer, of the left-leaning Pembina Institute, said the cap is an “insurance policy” against escalating oilsands emissions, placing the onus on industry to adapt.
Still, Dyer said the cap will not be enough to help the federal government meet its target of reducing emissions by 30 per cent over 2005 levels by 2030. By 2050, the Canadian plan calls for emissions to fall to 150 megatonnes.
“As long as Canada is not able to put forward a plan that demonstrates we’re on track to be reducing emissions. the oilsands is likely to continue to attract attention, given that it remains a growing source of emissions,” Dyer said.
Millington said her institute’s next report considers a range of potential technologies, such as using propane, pentane, and butane — known as solvents in the oilsands — to produce oil with fewer emissions.
It also examines the impact of cogeneration plants, which produce electricity for oilsands facilities as well as steam that heats up sticky bitumen underground so it can be pumped to the surface.
These types of technologies “show promising results in our analysis where production still grows but emissions stabilize,” Millington said.
Still, she noted there are factors that could slow the pace at which companies adopt technologies and reduce emissions, such as energy prices, which took a nosedive two years ago, draining capital spending budgets in the oilpatch.
Another complicating factor is that some technologies are not at the commercial stage and need to be tested at existing facilities, Millington said.
“Some of these pilots are run on a smaller scale; the industry needs to show that these can be (successful) at larger scale, commercial-size facilities,” she said. “That’s probably the biggest technological constraint.”