Has Canadian Environment Minister Had a Climate Change Epiphany?

Mon, 2006-10-02 10:18Richard Littlemore
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Has Canadian Environment Minister Had a Climate Change Epiphany?

Enviro Minister Rona AmbroseThe National Post, through which the Canadian Conservative government has been floating all its climate change policy trial balloons lately, now suggests that “Tories to regulate industries for CO2.”

This would be fabulous news if it were true, and not just “positive spin on a made-in-Canada solution.”

 But this comment, by Pierre Alvarez, president of the Canadian Association Petroleum Producers (CAPP), suggests the government is a long way from rustling feathers in the Canadian oil patch. Alvarez is quoted in the Post story saying, “We have been going forward on the assumption that CO2, as well as toxics and other pollutants, would be covered in the (Tories' new) plan.” But he said he did not necessarily believe that regulation meant a cap on emissions. “You may have to have targets but it does not necessarily mean a cap, and certainly not a hard cap.”

You can imagine a soft cap, one that the industry could wear backwards or throw in the closet when it gets warm out.

Previous Comments

News reports of controls on emissions from the oil + gas industry mention the probable use of an “energy intensity” target, rather than a total emissions target. This difference is not trivial. The emissions intensity, a metric used by the US government, is the emissions per $ of GDP. The problem with reducing emissions intensity is that the GDP naturally grows with inflation. Therefore, unless the emissions intensity is being reduced more than the rate of GDP growth, the total emissions will increase. The Bush administration plan - an 18% reduction in emissions intensity over ten years - equates to roughly a 10% increase in actual emissions. An “energy intensity” target - something like emissions per unit of energy produced - could have a similar flaw. As energy extraction in the tar sands expands, a reduction in intensity could still translate into an increase in actual emissions, especially since as the energy extraction process itself is likely to become more energy efficient.

The Oil and Gas industry uses emissions per unit of energy extracted.

The baseline they use,for good reason,  is 1990 (as per Kyoto targets). Back then, Suncor and others were using a very inefficient system (subject to breakdowns) of a continuous feed - grinding tar sands from the interface with a spinning wheel, which deposited the sandy mix onto a conveyor belt. Breakdowns, combined with relatively small plants, resulted in a very high “emissions intensity”

They had a major revision in technology by going to bucket and shovel in the early 90’s.  The technology prior to that was not sustainable (from an economic perspective - rumour has it Rick George was dispatched from Sun Oil in the US to sell off the assets - consultants and internal engineering talent advised a different approach was warranted).

From the advcie, in addition to increasing  economies of scale through larger processing plants (which reduces energy use per unit throughput), the “energy intensity” dropped from the switch to bucket and truck technology.

So, they did go down a learning curve in a short period of time -  a heads up to watch for spin in the days head- be skeptical when they quote intensity levels relative to 1990 levels. It’s not because that’s what the Kyoto targets are measured against. Pick a more recent time, and the declines in “intensity levels” are much more modest.

I think you are being overly dogmatic about intensity targets.  Firstly, the old Liberal LFE plan was essentially based on intensity targets, so this is hardly anything new.  

The first comment about inflation is trivial - not controlling for inflation could be used to disguise the nature of regulation, but given how common it is to use a year base dollar and controlling for inflation, this is hardly an intrinsic flaw.  The second comment is a canard - no one is suggesting that 1990 technology should set any baseline.

There are some merits to an intensity target approach.   China and India will not agree to an absolute cap in the foreseeable future, and it is clear that they must be brought into some sort of structure beyond the incentives provided by CDM.   They are among the least carbon-efficient economies in the world.  Intensity targets for these economies may be the only practical option.

Fundamentally, the problem with intensity targets at a corporate or a sector level when combined with any absolute target at the national level, Kyoto or otherwise, is that the public purse is on the hook to make up the difference.  In Canada, that difference is not trivial because of the developed world economies, Canada is the least carbon efficient at 0.72 tons of CO2 equiv per 1000 USD of GDP


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