The oil and gas industry in Canada claims opposition to the oilsands, the world’s second largest reserve of oil and Canada’s fastest source of greenhouse gas emissions, is merely “ideological,” according to new internal documents released under Access to Information legislation (attached below).

In the documents the Canadian Association of Petroleum Producers (CAPP), Canada’s largest oil and gas lobby body, suggested that because “the objection to the oil sands is ideological” and “not a concern that Alberta’s current framework is not stringent enough,” there is no guarantee that a stricter regulatory regime for the development of the oilsands will “’secure’ social license and forestall negative policy action.”

Alberta, required to renew its oil and gas emissions regulations in 2014, is proposing a new greenhouse gas target that would see a reduction of 40 per cent per barrel of oil produced and a maximum penalty price of $40 per tonne of CO2 above that level by 2020. Currently Alberta enforces a reduction of emissions by 12 percent with a max price of $15 per tonne.

According to the newly released documents CAPP is fighting for a weakened regulatory position, one that requires a 20 per cent reduction with a $20 penalty fee.

As the Pembina Institute points out, CAPP's proposed regulatory fees would be merely tokenistic, only just keeping up with the price of inflation.

In the collection of documents released to Greenpeace’s Keith Stewart – containing correspondence records between the government of Alberta and CAPP from January to May of this year – CAPP says stricter regulations might cost industry a lot without winning over the public.

In a section of a document entitled “Framing the Right Questions” CAPP questioned Alberta’s proposed emissions targets:

“Will higher stringency requirements ‘secure’ social license and forestall negative policy action elsewhere? Unlikely. The objection to the oil sands is ideological; not a concern that Alberta’s current framework is not stringent enough. Put another way, if the 40/40 guidelines were enacted, oil sands opponents would claim that they too were insufficient.”

Beyond concerns with public perception, CAPP argued that a more advanced set of regulations on greenhouse gas emissions wouldn’t necessarily lead to a reduction in CO2 pollution. The lobby group also warned that stricter environmental regulations could restrict investment in oilsands research and development.

“Will higher stringency requirements deliver greater GHG reductions? Unlikely. The challenge with the oil sands is that current technology is not yet available for deployment to a significant degree.”

CAPP, however, threatened new regulations might be disadvantageous to industry operating in Canada.

“Will higher stringency requirements impact production and revenue? Very likely. Adding a regressive charge to the oil sands, one that bites harder at low prices than high prices, introduces additional cost and risk. This will impair recovery of marginal resource associated with existing projects. And make new projects less competitive from a portfolio perspective. And the higher costs associated with additional stringency can also impair the resources devoted to research.”

Yet a growing carbon pollution problem might in fact be the largest looming threat to the oil and gas industry, rather than tougher emissions standards.

Recently a group of 70 investors worth $3 trillion publicly pressured 45 of the biggest oil and gas companies to respond to the concern of ‘stranded assets’ – oil and gas reserves made un-exploitable due to international efforts to manage global climate change.

Investments in fossil fuel reserves have become increasingly insecure in the move toward a low-carbon economy.

Canada is heavily invested in the oil and gas sector, with a total market capitalization of $400 to $500 billion.

Despite CAPP’s positioning on the issue of “opposition to the oil sands,” it may be anemic oil and gas regulations that actually threaten the industry.

Without strengthened emission’s standards, oil and gas reserves will become an increasingly dangerous investment, compromising financial markets.

And the absence of a more ambitious regulatory regime guarantees that both Alberta and Canada will continue to fail to meet greenhouse gas emissions targets.

As the Pembina Institute reports, CAPP’s proposed standards “would see oilsands emissions grow from 55 million tonnes (Mt) today to between 95 and 98 Mt in 2020. The cost to companies would grow from 10 cents a barrel today to a maximum of 23 cents a barrel. Overall, the proposal would fail to even achieve Alberta’s 2020 target – a goal that’s far weaker than the 2020 target that Ottawa has adopted.”

Alberta accounts for 48 per cent of Canada's total greenhouse gas emissions. 

A new poll also shows a majority of Canadians feel climate leadership on the international stage should be a high priority for the nation.

Image Credit: Kris Krug via Flickr

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The latest in a series of moves clearing the way for major tar sands expansion, the federal government has announced certain projects will no longer require a federal environmental impact assessment before approval. Notably absent from the list of projects requiring assessment is in situ mining, the fastest growing extraction method in the tar sands.

While the more commonly used open-pit mining requires digging up bitumen and sand from beneath the boreal forest, in situ mining pumps steam deep into the ground to melt and pump out the oil in place. The process typically occurs 200 metres or more below ground.

As shallow deposits of bitumen are exploited using open-pit mining, tar sands producers are using increasing amounts of in situ technology to develop deeper deposits. According to the Canadian Association of Petroleum Producers, 80 per cent of all tar sands oil will be developed using in situ technology.

The ongoing tar sands spill on Canadian Natural Resources Ltd's (CNRL) operations occurred on a project using high pressure cyclic steam stimulation, or CSS, an in situ method of recovery. 

In addition to in situ mining, several other types of projects have also been excluded from federal environmental assessment:

• Groundwater extraction facilities.
• Heavy oil and oil sands processing facilities, pipelines (other than offshore pipelines) and electrical transmission lines that are not regulated by the National Energy Board.
• Potash mines and other industrial mineral mines (salt, graphite, gypsum, magnesite, limestone, clay, asbestos).
• Industrial facilities (pulp mills, pulp and paper mills, steel mills, metal smelters, leather tanneries, textile mills and facilities for the manufacture of chemicals, pharmaceuticals, pressure-treated wood, particle board, plywood, chemical explosives, lead-acid batteries and respirable mineral fibres)

There are also a handful of projects that weren’t previously required to undergo an environmental assessment that will require one going forward:

• Diamond mines.
• Apatite mines.
• Railway yards; international and interprovincial bridges and tunnels.
• Bridges that cross the St. Lawrence Seaway.
• Offshore exploratory wells.
• Oil sands mine expansions.

Before the change, whenever a federal authority planned to be involved in a new project, one of three levels of assesment was triggered. The lowest level screening required proponents to document the potential environmental impact of the project. The next level required a comprehensive study, and projects considered to carry the highest level of risk were subject a full panel review. In situ projects typically fell in the mid range.

After last year’s omnibus bill cancelled nearly 3,000 environmental assessments, the removal of the trigger mechanism will leave a significant gap in the assessment process.

The Canadian Environmental Assessment Agency, the body responsible for evaluating the potential impact of new projects on areas that fall under federal jurisdiction, such as waterways and greenhouse gas emissions, consulted stakeholders in the oil and gas industry as well as environmental groups. Last Thursday’s news release from the Ministry of Environment said the changes were made “to ensure that federal environmental assessments are focused on those major projects with the greatest potential for significant adverse environmental impacts to matters of federal jurisdiction.”

Greenpeace climate and energy campaigner Keith Stewart said the change is just another way for the federal government to ignore climate change. “I think it shows that the government simply doesn’t want to the information. It’s kind of a ‘see no evil, hear no evil’ type approach.”

You can’t regulate something you don’t know about, he added.

He said the push for a list-based approach to assessment came from the industry, which also lobbied against having in situ projects included on that list.

“What this means here is a whole lot of projects that don’t get any kind of federal review.”

This announcement comes on the heels of a report released last week that reveals the current government's efforts to rein in greenhouse gas emissions are falling well short of the mark. In spite of new regulations for the oil and gas industry, Canada is still likely to exceed its 2020 greenhouse gas emissions reduction target by as much as 122 megatonnes. The goal is 612 megatonnes, and the report predicts Canada will hit 734 in the next seven years.

The report also projects that by 2020 in situ projects will be producing more greenhouse gases than the Maritime provinces combined at today's levels.      According to the Copenhagen Accord, signed in 2009, Canada agreed to reduce carbon emissions to 17 percent below 2005 levels, or 612 megatonnes. The report credits action taken by consumers, businesses and governments with keeping levels from rising to more than 800 megatonnes.

Hannah McKinnon, program manager at Environmental Defence Canada, says the government’s failure to meet reduction targets comes as no surprise.

“It’s a pretty bleak picture, but the writing was on the wall. We currently haven’t seen any ambition from [the government] to indicate that they were serious at all about meeting their targets.”

While the report highlights the uncertainty of the projection, saying that a lot can change depending how regulations change, McKinnon says none of the options currently under discussion will come close to closing the gap.

“There’s still space to meet the target,” she says. "It just would require a level of ambition we don’t have a lot of reason to believe this government is going to show.”

McKinnon says the Harper government’s strong presence in Washington, DC, drawing connections between American and Canadian GHG targets, only serves to further illustrate Canada’s hypocrisy.

“The US has a plan to meet that. What this report clearly shows is that our government doesn’t have a plan to reach that target.”

Image Credit: Suncor Energy via Flickr

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