FOLLOWING THE LOGIC OF “PHASING OUT OIL SANDS”

Contributed by Robert Lyman @ 2017

At a town hall event in Peterborough, Ontario on Friday, January 13, Prime Minister Justin Trudeau responded to a question concerning his Government’s recent decision to approve the expansion of the Trans Mountain oil pipeline by saying it was a matter of trying to balance economic and environmental concerns. He went on to say that, “We can’t shut down the oil sands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels but it’s going to take time and in the meantime we have to manage that transition.”

One might be forgiven for wondering about the logic that would lead the Prime Minister of Canada to say that, as a matter of national policy, we should phase out one of the most important sources of economic and industrial development in the country, a source of literally tens of billions of dollars annually in government revenues, business and personal incomes, employment and export revenues. The case, one can only surmise, rests on accepting the thesis that humans are causing catastrophic global warming, that Canada’s actions will remove that threat, and that the commitments that Canada made at the December, 2015 Conference of the Parties on Climate Change (COP21) in Paris oblige the government to make massive reductions in greenhouse gas (GHG) emissions.

Each of those points is highly questionable, but let us follow their logic to see where they lead. The COP21 Agreement contained no commitments with respect to emissions reduction targets. It contained only a loose political expression of support for collective action to keep global temperatures from rising more than 2.0 degrees Celsius from pre-industrial levels and specific commitments to file periodic reports on the nationally-determined actions that governments were taking to achieve that goal. Separately, the Government of Canada agreed to set targets – a 17% reduction from 2005 emission levels by 2020 and a 30% reduction from 2005 emission levels by 2030. Canada has not yet enunciated a goal for 2050, but the targets set to date are consistent with the view propounded by many environmental lobby groups that emissions in the industrialized countries should be reduced by 60 to 80% below 2005 levels by 2050.

Achieving major emissions reductions will be especially difficult given that normal economic growth would lead to their increase. Environment Canada, in its most recently published review of Canada’s GHG emissions trends in 2014, projected that, after declining from 736 megatonnes (Mt) of carbon dioxide equivalent (Mt CO2 eq) in 2005 to 699 Mt in 2012, emissions would grow to 727 Mt in 2020. The fastest growing source of emissions at the sectoral level is the upstream oil and gas industry, including both conventional and non-conventional (i.e. oil sands) sources.

Looking at the numbers, reducing emissions from the projected 2020 levels to the targeted ones would mean a reduction from 727 to 611 Mt, or 116 Mt; reducing emissions from projected 2020 levels (there are no authoritative projections of 2030 levels) by 2030 would mean a reduction from 727 to 515 Mt, or 212 Mt; and reducing emissions from projected 2020 levels by 2050 would mean reductions ranging from 433 Mt (60% target) to 580 Mt (80% target).

Environment Canada projects the emissions from all oil and gas production in Canada to be 204 Mt by 2020. That includes emissions from not only the oil sands but also the conventional oil and gas production in Alberta, Saskatchewan, British Columbia, Ontario, Nova Scotia, Newfoundland and Labrador and the territories. If that could be done by 2030, it would almost attain the national emissions reduction target for that year. It would not come even close to meeting the much more ambitious targets the environmental lobby seeks for 2050.

But why focus on oil and gas? The logic, one can only presume, arises not only from the fact that present emissions represent a large share of the Canadian total. It is also the fact that, comparatively speaking, the oil and gas upstream industry is considered emissions-intensive.

A great irony is that, viewed on a total fuel cycle (”wellhead to tailpipe”) basis, 80 to 85% of the GHG emissions associated with oil occur at the tailpipe, or point of combustion stage. Yes, it is the downstream use of fossil fuels that causes the most intensive emissions! So, which are some of the other emissions-intensive parts of the Canadian economy? Here’s a list:

Electricity Generation

Freight Transportation

Aviation

Metal and non-metal mining

Smelting and refining

Petrochemicals

Fertilizer production

Motor vehicle and parts manufacturing

Aluminum

Pulp and Paper

Iron and Steel

Cement

The fact is that governments will not be able to achieve the large emissions reduction now committed to or contemplated unless they address, cut back or “phase out” emissions in all these economic activities.

The next time Prime Minister Trudeau announces in Ontario that, in the national interest, we will have to phase out an emissions-intensive industry, maybe he should substitute “motor vehicle and parts manufacturing” for oil sands. It would only be logical.

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