Download
the energy and global warming implications of canadian tar sands development n.
Skip this Video
Loading SlideShow in 5 Seconds..
The Energy and Global Warming Implications of Canadian Tar Sands Development PowerPoint Presentation
Download Presentation
The Energy and Global Warming Implications of Canadian Tar Sands Development

The Energy and Global Warming Implications of Canadian Tar Sands Development

187 Views Download Presentation
Download Presentation

The Energy and Global Warming Implications of Canadian Tar Sands Development

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. The Energy and Global Warming Implications of Canadian Tar Sands Development Dan Woynillowicz Director, Strategy & External Relations August 26-27, 2008

  2. About the Pembina Institute • One of Canada’s largest environmental NGOs • Sole focus: sustainable energy • Research, education, consulting, advocacy • Canada’s leading NGO on oil sands and climate policy: • www.oilsandswatch.org • climate.pembina.org

  3. Overview • Tar Sands: A new fossil fuel frontier. • Canada’s climate change contradiction. • Trends & policy. • Statoil’s proposed tar sands investment. • Project & lifecycle GHG emissions.

  4. A New Fossil Fuel Frontier • Tar sands represent a radically different form of fossil fuel production • Bitumen extracted from tar sands & upgraded to produce “synthetic” crude oil (SCO) • Significant energy requirements: • In situ extraction + upgarding requires ~ 1500 cf of natural gas per barrel of SCO • Tar sands production is 3-5 times more GHG intensive than conventional oil • On a full cycle basis the tar sands are 10-30% more GHG intensive than conventional oil

  5. GHGs from Tar to Tank Source: NRDC, 2008

  6. Tar Sands & Global Warming:The Big Picture • Proven reserves: 174 billion barrels • 2006 direct GHG emissions from oil sands (1.1 million bpd): 29 Mt • Direct emissions are only ~15 % of full cycle emissions • Norway’s 2007 GHG emissions: 55 Mt

  7. Tar Sands & Global Warming:The Canadian Context • Canada’s climate contradiction: • Kyoto commitment is 6% below 1990 by 2012. • Tar sands production is predicted to triple to 3.8 million bpd by 2020. • Tar sands emissions represent up to half Canada’s BAU emissions growth to 2020.

  8. Canadian Climate Policy • Abandoned Kyoto commitment to 6% below 1990 by 2012. • Government of Canada’s new target is 2% above 1990 by 2020 (8% above 2012 Kyoto commitment). • Government of Canada’s current plan for industrial emissions: • Uses 2006 as a baseline (rather than 1990). • Sets intensity-based target (not absolute reductions). • Does not take effect until 2010. • Fraught with loopholes.

  9. Climate Policy & Tar Sands • The federal government’s plan will allow GHG emissions from tar sands to increase from 29 Mt (2006) to 80 Mt (2017) before dropping to 49 Mt (2020). • Facilities starting in 2012 or later will face emission intensity targets based on CCS: • But not starting until 2018. • CCS target has not been set. • No details on compliance options.

  10. A Climate Change Laggard • Canada has backed away from any leadership on climate change: • Have adopted a very weak target. • Blocking progress at international climate change negotiations. • Government policy is too weak to meet this weak target • Too complex, too far from cap-and-trade or carbon tax. • The bulk of reductions are delayed for a decade. • Carbon price likely too low to incent CCS, even in 2018.

  11. Statoil’s Tar Sands Investment • Kai Kos Dehseh in situ extraction project • 220,000 barrels bitumen per day • 218 wellpads, 1,050 well pairs • ~ 40 year operation • Upgrader project • Input: 243,000 barrels bitumen per day • Output: 222,800 barrels synthetic crude oil per day

  12. Kai Kos Dehseh in situ Project • Technology: Steam Assisted Gravity Drainage (SAGD) • Production: 220,000 barrels per day (bpd) bitumen • Steam to Oil Ratio (SOR) = 3:1 • Bitumen recovery: 46% • Average GHG Emission Intensity: 60 kg CO2e/barrel • Best in Class GHG Emission Intensity: 34 kg CO2e/barrel

  13. In situ GHG Emissions Intensity

  14. Upgrader Project • In: 243,000 bpd bitumen • Out: 222,800 bpd synthetic crude oil • Average GHG emission intensity: 99.8 kg CO2e/barrel (33.4 with CCS) • “Best in Class” GHG emission intensity (without CCS): 14 kg CO2e/barrel • Competitors achieving similar GHG intensity without CCS.

  15. Upgrading Emissions Intensity

  16. Carbon Capture & Storage (CCS) • Statoil not considering CCS for Kai Kos Dehseh in situ project. • Statoil considering CCS for upgrader but: • “..dependent on a suitable outlet for the CO2, the existence of an appropriate fiscal and regulatory regime, and availability of adequate infrastructure to transport and store the CO2.” • Alberta does not currently have: • GHG reduction targets that would compel CCS. • A sufficiently high price on carbon to compel CCS ($15/tonne penalty). • Any carbon transport or injection infrastructure.

  17. Statoil’s Tar Sands GHG Emissions

  18. Statoil’s Tar Sands Projects & Global Warming • Statoil’s estimated tar sands reserves: 2.37 billion barrels • Estimated life cycle GHG emissions per barrel: ~1.03 t/barrel without CCS • Life cycle GHG emissions from Statoil’s tar sands projects: 2,448 Mt

  19. Greenwashing the Tar Sands? • The UK Advertising Standards Authority found that Shell’s description of the oil sands as “sustainable” breached standards for: • Substantiation, truthfulness, environmental claims • How is Statoil describing its oil sands development? • “I am confident that we will surpass our goals of sustainable development in the oil sands.” - Geir JØsang, President and CEO • “About Statoil…Goal is to create value for our owners through profitable and safe operations and sustainable business development without causing harm to people or the environment.” • (emphasis added) Source: Environment Report – 2007 Annual Report, North American Oil Sands Corporation/Statoil

  20. Norway’s Climate Change Commitments • 10% below 1990 by 2012 • 30% below 1990 by 2020 • Carbon neutral by 2050 • Annual GHG emissions • ~55 MT in 2007 • Statoil’s peak annual emissions from tar sands (2021 = 13 Mt) are equivalent to 24% of Norway’s 2007 national emissions

  21. Markets Shifting to Lower Carbon Fuels • Growing U.S. concern about climate change • Next administration likely to impose cap & trade • California’s “Low Carbon Fuel Standard” being adopted throughout U.S./Canada - possibility of federal LCFS • Section 526 of the federal Energy Independence & Security Act (2007) • U.S. Conference of Mayor’s resolution

  22. Questions • Visit www.oilsandswatch.org • Dan Woynillowiczdanw@pembina.org 1-403-538-7782 • Simon Dyer simond@pembina.org 1-403-721-3937

  23. Norway, Statoil & the Tar Sands • Norway’s leadership on climate creates high expectations for StatoilHydro • Does Norway’s carbon neutral target cover all state-owned operations? • Does government ownership create extra capacity and flexibility for leadership? • Shell is currently the leader: • Initial operation: absolute GHG target 50% below BAU • “Shell Canada remains committed to setting an emissions reduction target or goal for new facilities (on a full cycle basis) that is better than the "most likely commercial supply alternative at start-up". For the MRM Expansion 1 Project, we plan to set out a GHG commitment and management plan in 2007, which will achieve a meaningful reduction of GHG’s below business as usual.”