March/April 2010

Conference Board champions oil sands development

Consumers must shoulder their share of the carbon load

By P. Diekmeyer

Always in the crosshairs of environmental pressure groups, Canada’s oil sands have, in the lead-up to and aftermath of the Copenhagen Summit, been portrayed as the sole cause of Canada’s ecological ills. However, a recent report by the Conference Board of Canada debunks this myth. The authors of the report argue that oil sands producers are neither exclusively to blame for Canada’s poor environmental performance nor solely responsible for improving it. Spreading this message, they say, should be part of a successful strategy for developing the oil sands in the future.

The report, “Getting the Balance Right: The Oil Sands, Exporting and Sustainability,” was drafted for the Conference Board’s International Trade and Investment Centre, which focuses on the interplay of public policy, business strategy and global economic dynamics. Its authors, Len Coad and Glen Hodgson, contend that any comprehensive plan to address climate change needs to strike a balance between reducing the carbon footprint of energy producers and that of consumers.

“The oil sands produce about five per cent of Canada’s greenhouse gas (GHG) emissions,” they write. “In comparison, road transportation, primarily due to consumer demand for light-duty trucks, including SUVs, accounted for approximately 18 per cent of total Canadian GHG emissions in 2007.” The solution, they argue, is for both industry and drivers to do their share to keep pollution numbers in line.

Coad and Hodgson also challenge those who say that oil sands production should be curbed. “Oil sands expansion is being driven by end demand for oil products in the United States, Canada and elsewhere. That demand will be met from someplace. Given accelerated efforts [by producers] to reduce environmental impacts (including GHG emissions), why not the oil sands?” The country is politically secure, the resource has very little exploration risk and oil sands production, which generated $37.8 billion in revenues during 2008, is slated to rise significantly during coming years, they point out.

Coad and Hodgson acknowledge that oil sands development has generated numerous environmental concerns related to land and water use and air quality. But the industry’s Achilles heel, they say, is the related GHG production, which is expected to skyrocket during the coming years as the oil sands activity steps up in response to projected demand increases.

Greenpeace has labelled the oil sands as “one of the dirtiest and most damaging ways to get oil out of the ground ever devised.” Coad and Hodgson counter that oil sands production does not lead to that much more pollution than conventional oil. “On a wells-to-wheels basis (i.e. through the full chain of production, shipping, refining and consumption), GHGs per barrel from oil sands crude are between seven and 21 per cent higher than the lowest emitting crude oil currently used in the United States,” they say.

The oil sands can and must be more efficient, assert the authors. The extent to which they succeed will depend on the level of investment in cleaner technology from both the producers and the government. The same is true for the country as a whole. The scrutiny directed at the oil patch, they insist, should not draw attention away from the impact that efficiency measures in vehicles — the largest contributors to GHG emissions — and behaviour change among drivers can have on the country’s environmental footprint. They point out that Canadians, on a per capita basis, rank as the world’s third-worst polluters, each producing an average of 23 tonnes of carbon dioxide equivalent emissions annually.


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