Oilsands emissions lie at the core of Canada’s climate challenge

Blog - Dec. 4, 2012 - By Marc Huot

’Tis the season for evaluating Canada’s progress on climate change, and now that we’re in the second week of global climate talks in Doha, Qatar, the oilsands are once again drawing fire as Canada’s main climate culprit.

Some may argue this label is unfair, but there’s one big reason that oilsands development deserves to be at the centre of any serious effort to meet Canada’s climate commitments: while other sectors are expected to reduce greenhouse gas emissions by 67 megatonnes (Mt) by 2020 (relative to 2005 levels), oilsands expansion is expected to add 72 Mt of carbon pollution to the atmosphere in the same time frame. (This comes from Environment Canada’s assumption that oilsands production will reach 3.3 million barrels per day by 2020).

In other words, the projected growth in oilsands emissions over the rest of this decade will basically cancel out the emissions reductions that all other sectors in Canada expect to achieve (see chart below), leaving Canada on course to achieve only 50 per cent of its 2020 climate target.

Without the growth in emissions from oilsands expansion, Canada’s emissions would be shrinking. As it stands now, Ottawa expects Canada’s emissions to fall 113 Mt short of the targeted level in 2020 with current policies. To put this into perspective, 113 Mt is double the current emissions of the entire province of British Columbia (56 Mt), or significantly more than the current emissions of every power plant in Canada put together (99 Mt).

That means cutting emissions from oilsands development has to be a top priority if Canada is going to do its fair share to tackle climate change.  

Emissions under current policy

Is the International Energy Agency sending mixed signals?

Now, this argument may seem out of step with last week’s comments from the International Energy Agency’s (IEA) chief economist, Fatih Birol, who downplayed the significance of oilsands emissons relative to other sources of greenhouse gas pollution around the world in an article in the Globe and Mail.

The article concludes that "booming oil sands production can be consistent with global progress on climate change," citing IEA forecasts that show oilsands production nearly tripling from today’s 1.6 million barrels per day to 4.3 million barrels per day, and noting Mr. Birol’s comments that oilsands emissions are insignificant on a global scale.

However, the claim that oilsands growth and serious climate action can be compatible is inconsistent with the IEA’s own research. The IEA projects various levels of fossil fuel production to correspond with different scenarios for global efforts to reduce greenhouse gas emissions. Across the scenarios, the results show that demand for high-carbon fuels is inversely related to how aggressively the world acts to address climate change. 

It all comes down to which climate change scenario the world will choose.

Understanding the IEA’s scenarios

Much of the confusion over the IEA’s various projections relates to the data from the IEA World Energy Outlook scenarios. These scenarios examine the development of global energy markets under different policy assumptions. Chief among these are policies needed to reduce the impacts of global warming. The scenarios also lay out the implications of our energy choices in terms of global emissions and climate change.

Under the "Current Policies" scenario, governments take no more action than what they have already implemented — putting the world on course for 6 C or more of warming and the disastrous costs to infrastructure, economies, biodiversity and human life associated with such profound climate disruption.

The IEA’s central "New Policies" scenario expects governments to tentatively implement the policies needed to meet their current international climate commitments — but this still leaves the world on track for 3.6 C of warming this century, and similarly serious consequences.

But there’s another, more hopeful, scenario: the IEA’s “450 Scenario” assumes the world acts seriously to address the threat climate change and limit warming to the international-agreed threshold of 2 C — keeping the amount of carbon dioxide in the atmosphere below a threshold of 450 parts per million. This scenario includes an assumption that pledges made in Copenhagen by Annex 1 countries — which includes Canada ­ — are met and a series of other climate policies are put in place. As a result, in the “450 Scenario,” demand for oil would peak this decade, and two-thirds of currently proven fossil fuel reserves would have to stay in the ground — unless there is a massive uptake of carbon capture and storage.

"If the objective is to avoid disastrous climate change impacts, the “450 Scenario” is the best option of the lot — and the IEA makes it clear that demand for oilsands crude under this scenario does have limits."

The IEA’s 2010 report spells out the demand for oilsands crude under these different scenarios. The IEA notes that demand for oilsands and other sources of unconventional crude that are greenhouse gas-intensive are significantly affected by policies that put a price on emissions. Under the “New Policies” scenario, for instance, the projected level of oilsands production is 4.3 million barrels per day in 2035; under the “450 Scenario”— the scenario that is consistent with limiting global warming to 2 C — oilsands production would level off at just over 3 million barrels per day. While this represents significant growth relative to today’s oilsands production rate of 1.7 million barrels per day, it is substantially less than planned development. For example, Alberta has already approved over 5.2 million barrels per day of oilsands production. However, in the IEA “450 Scenario”, oilsands production in 2035 is less than what Environment Canada is forecasting for 2020.

With so many scenarios to choose from, it’s not hard to see why there is confusion. However, if the objective is to avoid disastrous climate change impacts, the “450 Scenario” is the best option of the lot — and the IEA makes it clear that demand for oilsands crude under this scenario does have limits.

Why oilsands emissions matter in Canada’s climate fight

As Mr. Birol stated, oilsands emissions appear insignificant when compared against other major sources of greenhouse gas pollution globally.

Claiming that the oilsands represent just a fraction of global emissions lets everyone off the hook, since in a global context the emissions from any single source appear small. It is far more relevant to consider the emissions from sub-sectors like the oilsands in relation to other sub-sectors and in a provincial and national context.

Environment Canada’s annual emissions trends report projects that oilsands emissions will grow faster and larger than any other economic sub-sector in Canada by 2020, exceeding those of all passenger transportation in Canada, all electricity generation in Canada and the total emissions of every province except Alberta and Ontario.

Emissions by sector

To tackle the growing challenge of global climate change we need to make progress on reducing emission from all sources. With the clock ticking and the world watching, we simply don’t have the luxury of ignoring oilsands emissions.

As David McLaughlin, former president and CEO of the National Round Table on the Environment and the Economy argues in a recent op-ed, “There is only one sector that matters most for Canada when it comes to getting emissions down: the oilsands. If oilsands emissions go down, we meet our national carbon-reduction targets. If not, we don’t.”


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