Canada’s climate plan charts hard road ahead for high-polluting oil sands

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WINNIPEG — C anada has set bold targets for slashing emissions to combat local weather change, however faces a stiff problem: not solely is its financial system depending on oil manufacturing, however the Canadian oil business’s carbon emissions are among the many world’s highest for each barrel of oil it pumps. The Canadian oil patch exemplifies essentially the most vexing downside of the vitality transition. In the long run, Canada wants to chop its dependence on the vitality sector that accounts for 10% of its financial system, because the world strikes away from planet-warming fossil fuels. Within the brief time period, Canada wants to wash up the method of extracting oil to adjust to nationwide emissions targets.

The northern Alberta oil sands spew three to 5 occasions the worldwide common emissions per barrel of oil equal, based on Rystad Power, as a result of extracting crude from Alberta’s gumbo-like deposits of oil, sand and clay requires extra vitality.

Simply one of many nation’s 5 greatest oil corporations, Suncor Power Inc, has a plan to chop emissions outright. The producers say they want intensive authorities subsidies for carbon seize and different applied sciences corresponding to small modular reactors (SMRs) to satisfy local weather targets.

“There’s not a dial on the wall the place we are able to dial ‘low carbon’,” stated Cenovus Power Chief Govt Alex Pourbaix. “To decarbonize considerably takes capital – large portions of capital over a few years.”

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Prime Minister Justin Trudeau set in April a nationwide objective to chop emissions 40% to 45% by 2030 from 2005 ranges, up from a earlier objective of 30%. Pourbaix calls that objective “terribly bold,” though the US is pledging a 50-52% reduce over the identical interval.

Cenovus, Canadian Pure Assets, Suncor, Imperial Oil and MEG Power this month shaped an alliance to chop emissions. However the producers are aiming at Canada’s 2050 net-zero dedication, and their interim targets fall wanting Trudeau’s 2030 goal.

A Suncor spokesperson stated the businesses intention to cut back their emissions by one-third each 10 years. The plan facilities round authorities and business funding a hub to seize carbon, nevertheless it consists of no particulars about capability or price. Suncor plans to chop absolute emissions 34% by 2030, even because it boosts oil manufacturing.

Trudeau’s personal setting ministry tasks oil sands emissions will climb to a file 95 million tonnes of carbon dioxide equal by 2030, from 83 million in 2019.

Alberta’s Ministry of Setting and Parks stated Canada’s new emissions goal would require motion throughout all elements of the financial system and vital assist from the federal authorities.

“Targets don’t imply a lot and not using a sensible plan to realize them,” spokesman Paul Hamnett stated in an electronic mail.

The business has lowered emissions per barrel 21% from 2009 to 2019, based on consultancy IHS Markit, however its absolute emissions have risen as output has grown.

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“We have to discover pathways to lowering emissions in each main sector of the financial system that produces vital emissions,” Setting Minister Jonathan Wilkinson stated. Authorities officers didn’t instantly reply questions concerning the alliance or federal expectations for oil sands emissions cuts.

STORING CARBON

The oil sands’ three massive hopes are carbon seize services, steam-reduction expertise, and deploying renewables to energy the oil sands.

Carbon seize includes storing or reusing carbon emissions from fossil gasoline sources so they don’t enter the environment. The expertise, nevertheless, has little industrial viability with out subsidies.

Ottawa and producers are arguing over the construction of a carbon seize tax credit score. Producers say they face an obstacle towards U.S. rivals as a result of tasks that reinject carbon into the bottom to extract oil, referred to as enhanced oil restoration, don’t qualify for credit.

IHS Markit analyst Kevin Birn stated the expertise would permit producers to redeploy carbon and generate income by unlocking extra crude.

“We’ve been at pains to make (Ottawa) perceive that that is fairly new and costly expertise,” Pourbaix stated. Federal officers didn’t remark instantly on carbon seize.

Canadian Pure Assets is relying on carbon seize most to chop emissions, however is not going to decide to matching the 2030 goal till it higher understands the federal government’s incentives, stated President Tim McKay.

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Suncor, together with utility ATCO Ltd, is growing a multi-billion-dollar undertaking in Alberta to provide clear hydrogen and seize carbon, however will solely go forward with authorities support.

Suncor CEO Mark Little stated the undertaking would reduce emissions by 2 million tonnes yearly, or 0.3% of Canada’s whole.

Emissions would drop if the oil sands drew energy from SMRs as a substitute of from pure fuel, however that expertise is dearer and would meet solely a fraction of producers’ wants, stated Ken Darlington, vice-president of company growth at USNC-Energy.

Whereas producers have reduce carbon depth by lowering steam use with solvents, industrial deployment is gradual due to the problem of economically recovering solvent after utilizing it, McKay stated.

The Worldwide Power Company, in a report final month, famous that slicing emissions to internet zero by 2050 might be troublesome except the quantity of carbon captured globally rises to 7.6 billion tonnes yearly from a present 40 million tonnes.

“It’s net-zero, not zero,” stated Suncor’s Little. “Among the hard-to-decarbonize industries, we’re going to need to offset emissions slightly than remove them.”

(Reporting by Rod Nickel in Winnipeg and Nia Williams in Calgary; extra reporting by David Ljunggren in Ottawa Modifying by Marguerita Choy)