Oilsands study touts emissions progress
The Canadian oil industry is looking for ways to reduce emissions in the face of a looming 500-per-cent increase in carbon prices, and a new study funded by the government of Alberta predicts oilsands emissions intensity could be cut by as much as almost 20 per cent.
The study, released Thursday by researchers at the University of Calgary, University of Toronto and Stanford University, says that new techniques for producing bitumen from steam-based oilsands facilities can reduce the carbon intensity of those barrels by 14 per cent to 19 per cent.
Funded by Alberta Innovates and Emissions Reduction Alberta, two provincial government agencies, the study also said oilsands emissions intensities are already up to 35-per-cent lower than previously reported.
“Given current climate targets and ambition to reduce GHG emissions globally, there is an increasing need to transparently demonstrate baseline GHG emissions and reductions achieved over time,” Joule Bergerson, one of the report's authors and a University of Calgary chemical and petroleum engineering professor, said in a release. “The emerging technologies assessed in this study show reductions on the order of 14 to 19 per cent in upstream emissions and one to two per cent on a full cycle basis.”
Bergerson, who is also Canada Research Chair in energy technology assessment, added that more accurate emissions models will help policy-makers “in making better climate-wise decisions.”
The study compared 2018 to 2015 emissions from multiple oilsands projects operated by MEG Energy Corp., Canadian Natural Resources Ltd. and Imperial Oil Ltd. The researchers found carbon emissions intensities are 14-per-cent to 35-per-cent lower than data presented in a previous study, which was attributed to technological improvements.
That previous study, led by Stanford University post-doctoral researcher Mohammad Masnadi and published in the journal Science in 2018, considered 2015 emissions data from almost 9,000 oilfields in 90 different countries and found that Canadian and Venezuelan heavy oil were among the world's most carbon-intensive barrels.
Masnadi's study also found that operators that flare large volumes of natural gas have higher emissions intensity. For example, Algeria produces the world's lightest oil, but has the highest carbon intensity as a result of flaring.
Alberta Innovates chief executive Laura Kilcrease said in a release that the new study shows “that innovation has enabled reductions of GHG emissions in oilsands production and emerging technologies provide the potential for even greater results.”
The Canadian oil industry is widely expected to pour billions into emissions-reducing technology in the coming years after the federal government last week announced it would hike its carbon tax by more than 500 per cent, to $170 per tonne in 2030 from $30 per tonne now.
The effect of such an increase could reduce expected earnings by a minimum of nine per cent at pipeline companies, according to a Dec. 13 research note from Stifel FirstEnergy.
“We view the potential carbon tax as a material headwind for the sector if passed and if there are few exemptions available,” Stifel FirstEnergy analyst Ian Gillies said in the note. “If passed, this would accelerate the need for investment in technologies to reduce GHG intensity.”
Gillies estimated that a carbon tax of $170 per tonne could affect 29 per cent of Keyera Corp.'s earnings before interest, taxes and amortization (EBITDA), making it the most exposed pipeline and infrastructure company to the new tax.