oil sands

My latest Economy Lab Post: Emissions: Peter Kent’s 178 millon-ton challenge

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It may be his most important task, and setting Canada’s GHG policy course for the next four years will not be an easy one for Environment Minister Peter Kent. By his own admission, meeting Canada’s GHG goals will be a daunting challenge and will require stringent regulations on oil and gas, electricity generation, transportation, and … Read more

Time to come clean on CCS

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By now, most people with any connection to the energy sector in Alberta are familiar with carbon capture and storage (CCS) – the proposed technological solution to Alberta’s growing greenhouse gas emissions. When the Government of Alberta tabled ts Climate Change Strategy in 2008, the goals (shown in the figure below) were to achieve 200 Mt/yr of emissions reductions, relative to business-as-usual, by 2050 and CCS was tapped as the technology through which 139Mt/yr of emissions would be prevented from reaching the atmosphere, and perhaps more importantly from reaching our GHG inventories.

The Government has failed to address what I have called 4 hard truths about the implementation of CCS in Alberta. First, CCS is expensive and so the existing $2 billion CCS fund will only deliver, at best, 4Mt/yr of emissions reductions, getting us about 3% of the way to our long-term goal.  Second, technological improvement does not mean that the average cost of new CCS projects will decrease over time. Third, there is only one exit strategy for the government from long-term CCS funding, and that is the implementation of more stringent GHG emissions policies. Finally, significant changes in energy markets suggest that CCS may no longer be the most cost-effective option for significant GHG emissions reductions in the province.

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Globally credible GHG policy would help, not hurt, the oilsands

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While there are many environmental concerns with the oil sands, the issue of greenhouse gas emissions (GHG) has the most potential to prevent Albertans from realizing the true value of the resource. The term dirty oil has clearly resonated with environmental groups both in the US and in Europe and will continue to be used by those who seek to limit our access to important markets.  Our governments, both federal and provincial, seem to think that we face a dichotomy – either we can have an oil sands industry or we can have a globally credible GHG policy.  Industry, with a few notable exceptions, has done little to alter this perception.  I disagree entirely. I believe that a globally credible GHG policy is the only way to ensure the continued success of the oil sands industry, but I believe that we must build the policy on our own terms, not using reference points which were chosen for the benefit of other regions.  An Albertan or Canadian policy, based on 5 modifications of the current Alberta GHG regulations, would send a signal to the rest of the world that Alberta and Canada are prepared to be part of a global effort but that we are not prepared to be taken for a ride.

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The strange relationship between environmentalists and the oil price

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Environmentalists have a very strange relationship with the price of oil.  I asked around among friends, students, and online acquaintances and every one replied without question that high oil prices were a good thing if you care about the environment.  Why?  Well, high prices discourage consumption they said.  Not only that, high prices enable alternative energy sources.  Of course, both of these statements are correct, but if you look deeper into the economics of oil and gas, it is not so easy to say that you should pray for high oil prices if you care about the environment.

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