Oil Sands Watch | Pembina Institute


If the oil sands aren’t high carbon, why do oil sands proponents spend so much time fighting low carbon fuel standards?

With the recent efforts by the Government of Alberta to initiate a clean energy dialogue with U.S. leaders, I’m beginning to question the logic of our Environment Minister. On paper, the minister’s objectives are “to have an open and progressive discussion about climate change, the energy choices we all make as consumers, and how we can work together for a cleaner energy future.” Yet, when it comes to low carbon fuel standards — a set of policies that could accomplish those very objectives — the conversation stops dead in its tracks.

Low-carbon fuel standards, such as those adopted by California and being considered by several other jurisdictions, aim to decrease the greenhouse gas emissions associated with transportation by ensuring that the average life-cycle emission intensities of fuels sold in the region are limited to a certain level. According to this strategy, fuel providers may choose where they get their oil to avoid buying it from more greenhouse gas–intensive sources, such as the oil sands.

The potential implications of a widely adopted low carbon fuel standard already has the Government of Alberta travelling across the U.S. to campaign against the standards. Members of the oil sands industry have also been fighting low carbon fuel standards. Some have established a lobby group for their cause.

What’s confusing about the situation is that at the same time as they are fighting low carbon fuel standards, the oil sands industry is also heavily engaged in a campaign to convince the public that their greenhouse gas emissions are essentially no different from other crude oils. The Canadian Association of Petroleum Producers recently responded to protests against oil sands by arguing that life-cycle oil sands emissions are only marginally greater per barrel than the average crude entering the U.S. and that the difference between the two is getting smaller with time.

If this is the case, why are industry and government fighting so hard to undermine performance standards?

In my experience, there has been a lot of debate about the exact amount of greenhouse gases emitted during oil sands production and how they compare to an assortment of conventional crudes. Typically, proponents of oil sands development tend to play fast and loose with the facts and cherry pick studies that downplay the differences or that have limitations that need to be considered.

Numbers aside, the oil sands industry really needs to get its story straight: Is oil sands crude only marginally more carbon intensive than other crude oils, in which case low carbon fuel standards should not represent a threat, or is it a carbon-intensive fuel source that needs to fight efforts to reduce greenhouse gas emissions in order to maintain access to markets?

Government of Alberta — Jun 23, 2010 - 01:59 PM MT

Low Carbon Fuel Standards can be designed to exclude specific fuel sources - as California's does - regardless of their carbon intensity versus other fuel sources. Mostly, that reflects political rather than practical considerations. Pembina needs to do its homework.
- David Sands, Government of Alberta

Dan Woynillowicz — Jun 24, 2010 - 10:35 AM MT

As a policy-oriented, solutions-driven organization, Pembina has done its homework on Low Carbon Fuel Standards (LCFS). We have conducted research and analysis into the pros, cons and alternatives to LCFS, as commissioned by Suncor Energy. You can download the report, Low-Carbon Transportation Policies: A Comparison of California’s Low-Carbon Fuel Standard and Other Transportation Policies, at http://www.pembina.org/pub/1972. We recently presented on LCFS and alternative policies with the Midwestern Governor’s Association, alongside representatives from the Government of Alberta.

The Government of Alberta doesn’t seem to be engaging with governments that are contemplating LCFS with the objective of either improving the policy, or suggesting an alternative. Instead, it seems focused on  diluting its net environmental benefits by advocating for less differentiation between higher and lower carbon sources of oil, or advocating against the policy altogether. Just because California didn’t differentiate its heavy crude oil from conventional oil (which it should have, in our view) doesn’t mean that oil sands shouldn’t be differentiated - two wrongs don’t make a right. An effective LCFS will fairly and consistently differentiate based on the carbon intensity of a fuel.

So the question posed in this blog post stands: If the Government of Alberta is so confident in its climate policies, in the prospect of technological innovation (and in particular in carbon capture and storage), and therefore in the ability of the oil sands sector to continue to drive down the carbon intensity of its production, then why is it opposing policy like LCFS that would actually offer preferential treatment in the marketplace to lower-carbon sources of transportation fuel?

The obvious answer is that these policies and technological innovations won't deliver a level of carbon performance that allows oil sands to compete with advanced biofuels or electric vehicles powered by clean electricity.

As John Podesta of the Centre for American Progress recently said (http://www.americanprogress.org/issues/2010/06/tar_sands.html):
"...setting a goal of lowering oil sands emissions to come into line with conventional oil production is the wrong goal. The arrow is pointing in the wrong direction. Oil sands can’t simply be as good as conventional oil. We need to reduce fossil fuel use and accelerate the transition to cleaner technologies, in the transportation sector and elsewhere."

Dan Woynillowicz

Director, Strategy and External Relations, Pembina Institute

Graham Ludlow — Jun 23, 2010 - 06:18 PM MT

Excellent use of the 'can be' and 'Mostly' qualifiers there, David. However I would suggest saving them for debates in which the key issues are actually in doubt. California's politicians ARE attempting to sanction the oil sands as a source of fuel, because oil sands production DOES produce significantly higher levels of greenhouse gas emissions. It is, in fact, a practical consideration, the resolution of which - in California at least - carries tangible political benefits.
- Graham Ludlow

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