Scrubbing the Oil Sands' Record

The results of the Canadian federal election earlier this week made it clear that the Western provinces, especially Alberta, are seriously unhappy with the environmental policies of the Canadian government. The Liberals were completely shut out of Alberta and Saskatchewan, taking no seats and losing Ralph Goodale, a key cabinet member.

One of the major disagreements between Alberta and the rest of Canada rests on the fate of the oil sands. Alberta wants pipelines to ship the output of the oil sands to the rest of the world; many Canadians, especially those in British Columbia and the eastern provinces, don't want more pipelines built and would even like to see oil sands' production phased out. 

The production of oil from the oil sands is notoriously dirty. To their credit, the oil companies have been making efforts to decrease the impact of production on the environment and improving reclamation of land. But is it good enough? That's the subject of this article in Macleans, and their conclusion is about what I expected. 

Research analyst Kevin Birn, for one, has watched investor interest in carbon footprints rapidly increase. “Three years ago, I’d get a call [from investors] every six months. Last year it was once a quarter, and this year it was once a month,” says the vice-president for North American crude markets at IHS Markit. Birn is an apt guy to ask. Last year, he produced a report—oft cited by industry—which found that, sector-wide, oil sands’ carbon intensity had fallen by 21 per cent between 2009 and 2017. Future technical improvements, his study forecast, would drop levels on an intensity basis by another fifth by 2030. (Absolute emissions, it is important to note, will still rise, due to ramped up extraction, at a time when Canada has committed to substantial reduction.)

But his paper includes one table that should temper the excitement of those talking up oil sands’ carbon-competitive edge. Of the various types of oil sands extraction he forecast out to 2030, only one type—next-generation mining projects that pre-treat oil sands before upgrading—would have emissions per barrel at the same level as the average for crude from around the world. (Birn uses as his baseline 2012 numbers for oil shipped to and processed by U.S. refineries.) And they would reach the average only in a scenario where more aggressive improvements come online in the future. Traditional oil sands mining projects, which require an energy-intensive upgrading process, would remain 7.1 per cent above average in emissions intensity, while the “thermal” operations that pump steam into wells to extract bitumen would remain 2.6 per cent worse than average in this rosier scenario.