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Oil Sands’ Contribution to Canadian GHG Emissions Less Than Asserted

Len Coad, Director, Environment, Energy and Technology, and Western Office
Glenn Hodgson, Senior Vice-President and Chief Economist, Forecasting and Analysis
January 18, 2010

Climate Change Plan Must Include Producers and Consumers

The Copenhagen climate change summit has come and gone. The meetings produced a broad commitment to comprehensive engagement—forged in face-to-face discussions between the leaders of the two largest greenhouse gas (GHG) emitters, the United States and China—but few hard targets and no action plan. That will have to come from further international negotiations, yet to be determined.

The ball has now been passed to national authorities to develop their own GHG strategies, alone or in concert with regional trading partners.

Canada a Poor Environmental Performer

It is widely recognized that Canada has performed poorly on climate change policy, as evidenced by our high emissions per capita and overall emissions; the latter have risen by 155 million tonnes, or 26.2 per cent, since 1990. The facts are clear. In spite of mixed efforts to conserve energy, switch to low-emission energy supplies, and increase emissions intensity, Canada will have to do more.

According to some critics, the oil sands are Canada’s greatest environmental culprit.1 But the facts say otherwise, according to a new Conference Board publication Getting the Balance Right: The Oil Sands, Exporting, and Sustainability.

Rising Production, Rising Emissions

So, what are the facts about the oil sands? Current oil sands production of 1.2 million barrels per day is expected to double over the coming decade, because of growing demand in the U.S. and Canada for energy. Currently, oil sands production emits approximately 40 million tonnes of GHGs annually, or about 5 per cent of Canada’s total GHG emissions. Even though GHG emissions per barrel of production (or intensity) have dropped by one-third since 1990, total GHG emissions from the oil sands are on a rising trajectory, due to the anticipated growth in production. The critics are right on one thing—everything that can be done to reduce these emissions must be done, including revisiting the development path for the oil sands to ensure that climate impacts are properly considered.

Up to 75 per cent of the GHG emissions from a barrel of oil happen at the consumption end—in the vehicle.

For their part, oil sands producers claim that they are being unfairly singled out and that the solution is much broader. They, too, are right. As noted, oil sands emissions account for only 5 per cent of Canada’s total today, although this figure will likely rise to 8 per cent by 2015–20. Some critics claim the oil sands are the dirtiest fuel source ever. It’s true that emissions resulting from production, refining, and transporting of oil sands output to market are up to 25 per cent higher than those for other crudes currently refined in North America.

Consumption Produces Emissions, Too

However, a “wells to wheels” analysis shows it’s also true that up to 75 per cent of the GHG emissions from a barrel of oil happen at the consumption end—in the vehicle.

Canada’s transportation-related GHG emissions have risen by 38 per cent or 55 million tonnes since 1990, or more than the entire current emissions from the oil sands. Our growing preference for light-duty trucks (including sport utility vehicles and crossovers) has been a major contributor to the rise in transportation-related GHG emissions. If we are to cut emissions, action on transportation is just as important as action on the oil sands.

Comprehensive Strategy Needed

The take-away is simple. Yes, the oil sands producers must make every effort possible to reduce their GHG emissions. However, without a change in oil consumption in North America, actions directed exclusively at the oil sands will not have a material impact. A comprehensive North American strategy must include:

  • adopting cleaner transportation technologies;
  • expanding low-emission sources of electricity; and
  • changing consumer and corporate behaviour.

Some of these opportunities will contribute to economic growth; others will constrain it. However, we should know by now that pointing fingers and committing to targets without planning and taking action has not worked in the past and won’t work in the future. What is needed now is a comprehensive plan, and action.

1 Oil sands critics range from Canadian Auto Workers economist Jim Stanford to Al Gore, who was even quoted as saying extracting oil from Alberta’s tar sands jeopardizes the survival of our species (Oakland Ross, “Oil sands threaten our survival, Al Gore warns,” The Toronto Star, November 24, 2009).

Len Coad Len Coad
Director, Environment, Energy and Technology, and Western Office
Getting the Balance Right: The Oil Sands, Exporting, and Sustainability
Glen Hodgson Glen Hodgson
Senior Vice-President and Chief Economist
Forecasting and Analysis

Related Network
International Trade and Investment Centre

Related Publications
Carbon Disclosure Project Report 2009: Canada 200
U.S. Climate Legislation Implications and Prospects: Challenges for Canada
How Canada Performs—Environment