BURDEN ON OILSANDS GROWS AS PANEL SETS STRICT CARBON DIET
Proposals are likely to add to further investment flight, Claudia Cattaneo writes.
A panel representing environmentalists, oil companies, aboriginal communities and municipalities has managed to achieve consensus on a set of recommendations to the Alberta government on how to ration greenhouse gas emissions from the oilsands so the sector doesn’t exceed a now legislated 100-megatonne a year limit.
Expectations for the effort were low given the group’s diverse views, with some advocating growth of the sector, others to shut it down.
Yet it’s hard to see how the punishing carbon diet proposed will motivate growth in an industry already beset by so many challenges that many operators are cashing out and flocking to competing jurisdictions with more attractive political, regulatory and economic conditions. If the investment flight continues, it’s a good indication it’s unrealistic to expect one sector of Canada’s economy to bear such a big burden for the right to earn passage for its product.
A year after being appointed by the province’s NDP government, the Oil Sands Advisory Group announced its recommendations Friday to divvy up the remaining carbon budget of about 30 megatonnes a year, expected to be used up in the next decade.
One set of recommendations targets the period before the budget starts getting scarce. It includes encouraging new technologies, being more transparent about emissions management plans, changing regulations.
A second set targets the period when the budget is running out. That’s when measures would get heavy handed. Construction of new projects would be stopped and existing projects with higher intensity would be constrained.
“Success is to never have to worry about reaching the limit,” by growing production with lower emissions intensity, said Dave Collyer, the former president of the Canadian Association of Petroleum Producers who cochaired the group with Tzeporah Berman, the former Greenpeace and Forest-Ethics leader and Melody Lepine, a member of Alberta’s Mikisew Cree First Nation.
But the squeeze wouldn’t end there. Under the recommendations, the 100 megatonne limit would be the peak amount of emissions allowed. It would then be ratcheted back so Canada can “begin the rapid de-carbonization necessary after that to reach 80 per cent emission reduction by 2050,” according to the group’s 34-page report.
Collyer estimated oilsands production would max out at around 4 million barrels a day, up from 2.5 million barrels today.
“I think that in the world that we are in … it’s going to be more and more important that we are environmentally competitive, and the best way to not leave oil in the ground is to always be improving our performance and innovating,” Collyer said to reporters.
Shannon Phillips, Alberta’s climate change minister, said the government would review the recommendations, consult broadly, and develop regulations. Implementation is expected in early in 2018.
Already, some have expressed concerns that the approach will pit company against company and favour the four largest oilsands companies — Suncor Energy Inc., Cenovus Energy Inc., Canadian Natural Resources Ltd., and Royal Dutch Shell PLC — that proposed the emissions cap in the first place and backed Premier Rachel Notley’s climate change plan. Shell has since sold its vast oilsands business to Canadian Natural.
“We are very, very pleased that a diverse group of people, diverse voices on the oilsands advisory group, were able to provide us consensus advice around a very difficult topic,” said Phillips.
“Our approach is one of partnership … of not shouting anyone out of the room who had concerns about climate policies. Our approach is working,” she said. “We now have secured two pipeline approvals, which are key to diversifying our markets for energy products.”
Still, some shouting may have been too much. Berman and Karen Mahon, national director of Stand.earth, will not be involved in the next phases of the group’s work. Both advocated against the Trans Mountain pipeline expansion while getting paid to be members of the group. Phillips said their work, which involved providing external perspectives, was finished.
The world that we are in … it’s going to be more and more important that we are environmentally competitive.