Greenhouse gas emissions from Canada’s tar sands/oil sands are on track to exceed the Alberta government’s “hard cap” of 100 million tonnes per year by 2030 unless the industry comes up with new ways to reduce its GHG output per barrel of oil produced, according to a new study this week by the Canadian Energy Research Institute.
The study shows emissions rising from 72 to 103 megatonnes per year, in a scenario in which tar sands/oil sands production stands at 2.8 million barrels per day (bpd) in 2017, 3.2 million bpd in 2020, and 4.1 million bpd in 2030.
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CERI sees the industry’s output peaking at 5.5 million bpd by 2038.
“If we take the historical decline in emissions per barrel from in situ, mining, and upgrading projects and if we were to apply these declines to the future production, then we can see that the emissions cap will not be reached,” said CERI Vice-President of Research Dinara Millington. But “for the industry to be able to achieve that, they will need to continuously improve their emission intensity every year.”
Late last year, the Organization for Economic Cooperation and Development (OECD) warned that Canada would miss its carbon reduction targets “without a drastic decrease in the emissions intensity of the oilsands industry.” While emissions have been ratcheted down in most provinces, The Canadian Press reported at the time, they have soared in oil-producing provinces, rising 18% in Alberta and roughly 7.5% in Saskatchewan. Alberta alone is now responsible for 38% of Canada’s emissions, “reflecting [its] large, energy-intensive extraction industry, notably the oil sands.”
CERI determined that a new steam-driven tar sands/oil sands project could be profitable with U.S. crude oil prices at just above $60 per barrel, while an expansion project would only need a U.S price of $51.60 per barrel. Benchmark West Texas Intermediate crude has recently been in the $70-per-barrel range.