Oilsands greenhouse gas (GHG) emissions are projected to quadruple between 2005 and 2030, resulting in an 11% growth in Canadian emissions, says a federal government report.
Canada has already indicated it will be hard pressed to meet its Copenhagen Accord commitment to reduce greenhouse gas emissions to 17% below 2005 levels by 2020 as emissions from oilsands mining production doubles in that period, it says in a report to the United Nations Framework Convention on Climate Change (UNFCCC).
“In light of strong economic growth, this [the reduction] could be challenging, the Environment Canada report warns. “Canada’s economy is projected to be approximately 31% (in real terms) in 2020 compared with 2005 levels.”
GHG emissions are forecast to climb to 137 megatonnes (Mt) of carbon dioxide equivalent (CO2 eq) in 2030 with the growth in bitumen production to 4.57 million barrels (bbls) per day from 1.06 million bbls a day, says the report. Of that, in situ production would account for 82 Mt CO2 eq (up from 11 Mt CO2 eq in 2005), mining 25 Mt CO2 eq (up from nine Mt CO2 eq) and bitumen upgrading, 28 Mt CO2 eq (up from 14 Mt CO2 eq).
The report is the first time Ottawa has provided projections into the decade beyond 2020 and Canada will be expected to take the lead with deeper reductions as countries negotiate a post-2020 global climate agreement, said P.J. Partington, senior analyst, federal policy for the Pembina Institute. “We have seen that already with other countries starting to ask questions about our emissions.”
There is a mismatch between Canadian emissions and global expectations and the oilsands are a big part of that, he said in an interview. “We need to start reconciling that with our climate goals and I think we can do that through smart policy but ignoring it is not the answer.”
While the federal government has long promised to introduce legislation dealing with emissions targets for the oil and gas sector, more recently it has refused to say when it might be introduced.
Pembina has suggested a carbon price of about $100 per tonne, the threshold where strategies such as carbon capture and storage start to become economic and can start moving from the lab to the field and actually start getting deployed, said Partington.
Alternatively, the government could require industry to use certain technologies if operators want to be able to develop their projects but that could be considered intrusive, which is why Pembina prefers the carbon price, he said.
To meet its 2020 target of 612 megatonnes of CO2 equivalent, Canada will require additional reductions of 122 Mt CO2 eq from a projected 734 Mt CO2 eq in 2020 “under current measures,” according to the report. “This is 128 Mt CO2 eq less than under a scenario where emissions would be in 2020 if consumers, businesses and governments had taken no action to reduce emissions since 2005,” it says.
Projections for the “with current measures” scenario assume federal, provincial and territorial policies or measures announced or in place as of May 2013 and assume no further government action. The federal government, which is taking a sector-by-sector regulatory approach to GHG emission reduction, has not yet said when it plans to introduce legislation for the oil and gas sector although it has been promised for some time.
With current measures in place, projected Canadian GHG emissions in 2030 are 815 Mt CO2 eq, or 11% above 2005 levels, although additional actions by federal or provincial/territorial governments would lower this number, according to the report.
“Canada recognizes that climate change is a serious challenge that requires collective action by businesses, consumers and governments,” says the report. “The government of Canada is focused on a pragmatic approach to addressing climate change that will reduce emissions while continuing to create jobs and encouraging the growth of the Canadian economy.”
In 2011, Canada emitted 702 Mt CO2 eq of greenhouse gases to the atmosphere. The Energy sector (comprising stationary combustion, transport and fugitive emission sources) contributed 572 Mt CO2 eq (81%) of total emissions. Carbon dioxide accounted for 79% of Canada’s total GHG emissions with the majority produced by the combustion of fossil fuels.
Methane (CH4) contributed 13%, mainly from fugitive emissions from oil and natural gas systems, as well as Agriculture and Waste sector activities.
According to the report, emissions are decreasing relative to population and economic growth. “Per capita emissions are projected to improve through 2030, from 22.9 tonnes of CO2 equivalent in 2005 to 19.6 tonnes per capita in 2030 – a 15% decrease from 2005 levels.”
Emissions in the oil and gas economic sector are related to the production, transmission, processing, refining and distribution of oil and gas products. The government forecasts a 23% increase in sector emissions to 200 Mt CO2 eq from 162 Mt CO2 eq in 2005.
In 2011, with 163 Mt CO2 eq, the sector had the second highest share of GHG emissions in Canada (23%), second only to the Transportation sector (24%) at 170 Mt CO2 eq.
Within the oil and gas sector, the upstream oil and gas sector includes the extraction, production and processing of both conventional and unconventional oil and natural gas. The subsector represented approximately 70% of the oil and gas sector in 2011 and that share is expected to increase to 74% in 2030 with the significant increase in oilsands extraction.
Under the assumptions in the report, emissions from upstream oil and gas production are estimated to grow to 144 Mt CO2 eq in 2020 and 177 Mt CO2 eq in 2030 from 109 Mt CO2 eq in 2007.
The increase is driven by the forecast growth in total bitumen production with emissions expected to increase to about 76 megatonnes by 2020 from 21 megatonnes in 2005 as output climbs to 3.32 million bbls per day from 1.06 million bbls a day. By 2030, emissions are forecast to increase to about 107 megatonnes based on 4.57 million bbls per day of bitumen production.
Oilsands mining emissions are projected to grow to 21 Mt CO2 eq in 2020 and 25 Mt CO2 eq in 2030 from nine Mt CO2 eq in 2005.
“Even more significantly, emissions from in situ production are expected to increase from 11 Mt CO2 eq in 2005 to 55 Mt CO2 eq in 2020 and 82 Mt CO2 eq in 2030,” the report says.
However, it notes that while in general in situ extraction is more emissions-intensive than the more traditional mining methods, within the oilsands sector the overall emissions intensity of upstream oil production has been decreasing over time, as declining intensity from increasingly energy efficient in-situ operations more than offsets the increasing intensity of oilsands mining operations that are extracting deeper/poorer quality bitumen sand.
The report acknowledges that it is unclear if these historical improvements in emissions intensity will continue. “On the other hand, technological improvements have the potential to reduce oilsands emissions intensities,” it says.
In contrast, emissions from conventional crude operations are expected to decline to 31 Mt CO2 eq in 2020 from 32 Mt CO2 eq in 2005 and fall further to 22 Mt CO2 eq in 2030 as conventional reserves are depleted. Emissions from natural gas production and processing also are expected to fall, to 37 Mt CO2 eq from about 56 Mt CO2 eq in 2005 but then rebound slightly to 48 Mt CO2 eq in 2030 as gas production increases with an anticipated rise in price.
Emissions from the pipeline transport of oil and gas are expected to decline to nine Mt CO2 eq in 2020 from about 16 Mt CO2 eq in 2005 but then to increase to 12 Mt CO2 eq in 2030 due to the increased production and distribution of natural gas over this period. Emissions associated with the upgrading of oilsands bitumen are projected to rise to 26 Mt CO2 eq by 2020 and 29 Mt CO2 eq in 2030 from 14 Mt CO2 eq in 2005.
Downstream oil and gas emissions are expected to remain relatively flat throughout the projection period, declining to 19 Mt CO2 eq in 2020 from 24 Mt CO2 eq in 2005 but then rising to 21 Mt CO2 eq in 2030.
GHG emissions from upgrading bitumen into synthetic crude are included in the Traditional Refineries category. Between 2005 and 2020, emissions from bitumen upgrading are forecast to increase to 26 Mt CO2 eq and then further to 29 Mt CO2 eq in 2030 from 14 Mt CO2 eq in 2005 while emissions from traditional refineries are expected to decline to 17 Mt CO2 eq in 2020 from 22 Mt CO2 eq.
Although Canadian refinery production is forecast to rise 16% increase between 2005 and 2030, the report says GHG emissions are expected to decrease due to improvements in energy efficiency as refineries are refurbished.
The report also acknowledges there is considerable uncertainty about liquefied natural gas (LNG) production but it projects emissions of two Mt CO2 eq in 2020 and four Mt CO2 eq in 2030 based on National Energy Board preliminary projections of expected LNG production through 2030.
On a provincial basis, the Canadian government is projecting that Alberta GHG emissions per capita will decline to 64.9 Mt CO2 eq in 2020 from 69.8 in 2005, while Saskatchewan emissions will fall to 61.2 Mt CO2 eq from 71.5 and those in British Columbia to 12.4 Mt CO2 eq from 15.3.