Canada on course to fail Kyoto

Posted: 6 June 2007

Canada will fail to achieve its Kyoto targets due to the proposed expansion of its tar sands resources in Alberta says a report released to coincide with the G8+5 meeting of industrial countries now taking place in Germany.

tar sand
tar sand
Turning tar and sand into petrol uses three times as much energy as typical oil production. Photo © WWF
The report commissioned by WWF from the Tyndall Centre for Climate Change Research reveals that CO2 emissions generated through oil sands production will double by 2012, when they need to be halved. The analysis shows that the growing oil sands emissions have already exceeded both proportional Kyoto requirements and the Albertan government's proposed GDP-based targets.

James Leaton, WWF-UK's Oil and Gas Policy Officer said: "As the G8+5 nations meet today, Canada will have to explain its failure to deliver on its Kyoto commitments. Oil sands production generates three times as much greenhouse gases as conventional oil production and is Canada's fastest growing source of greenhouse gas emissions. Governments should be setting frameworks to deliver low-carbon economies rather than increasing carbon footprints."

The Canadian Government has proposed mandatory CO2 intensity targets for oil sands which consist of reducing emissions per unit of production by 15 per cent from a 2006 baseline to 2012. However there is no limit on the amount of production and the Tyndall analysis shows that if the projected expansion of production occurs, greenhouse gas emissions will more than double during this period. There will be no stabilisation of greenhouse gas emissions from oil sands.

Canadian tar sands mine
Canadian tar sands mine
Canadian tar sands mines larger than Greater Manchester dominate the landscape next to the Athabasca River, with no proven way to reclaim the boreal forest. Photo © WWF
Additionally, the report calculates that oil companies could actually make money under the new target system. The inadequacy of the intensity targets creates a perverse subsidy, which means that industry could make between C$300-700 million from selling emissions credits, just by delivering efficiency improvements such as using co-generation plants which are already planned.

Julia Langer, Director of Climate Change, WWF-Canada, said: "Intensity based targets reward the companies for business as usual, which won't deliver Canada's Kyoto targets. It is unacceptable that this industry should be able to both increase its total emissions very substantially and yet get emission credits under a scheme that does not set achieving Kyoto targets as its objective. The government must devise economic mechanisms which actually deliver meaningful cuts, not give the oil sector a bonus."

Another element of the Government's plan is a Climate Change Technology Fund, which companies can pay into if they don't meet the intensity targets. The C$15-20 charge per tonne of carbon would only result in an insignificant C$0.05 cost per barrel of oil. (Oil is currently trading at over $60 per barrel). With the weak targets not being a challenge to meet, there is not likely to be significant funds, yet the problem of climate change will be far from solved.

Technology to deliver absolute emissions reductions needs to be in place before expansion, rather than allowing expansion in the hope that one day an empty fund may produce some useful research, says WWF. At present the sequencing is wrong: more emissions now, a promise of technology later.

One of Shell's giant 400 tonne trucks that takes the bitumen and sand mixture from the tar face to the processing facility. Photo © WWF
The report concludes that known mitigation measures can meet the flawed intensity targets, they cannot deliver anything like the necessary cuts in emissions. A recent report by Natural Resources Canada indicates that there are limited alternative mitigation options that could deliver for Kyoto. Carbon capture and storage could not be developed until 2015 at the earliest according to Environment Canada.

James Leaton concluded: "WWF believes the industry has had long enough to become low-carbon and remove its global environmental footprint. It is clear that the most obvious way to limit emissions is to restrict further expansion. The intensity target proposals from the Canadian government do not reach the targets necessary and are the latest example of the failure to adequately regulate this sector."

The report, Climate Change Policy and Canada's Oil Sand Resources, was released by wwf.org.uk on June 6, 2007. The Tyndall Centre may be accessed at www.tyndall.ac.uk

See also Naomi Klein's article 'Iraq's oil boom isn't delayed, it's relocated to Canada' from The Guardian newspaper on June 1 here