The current linchpin in Canadian Big Oil’s plan to be carbon neutral by 2050 is its apparent success at reducing the emissions intensity of each barrel of oil produced, a claim that relies on a form of creative accounting that treats a tonne of emissions exported to another country as a tonne removed from the atmosphere.
Canada’s latest greenhouse gas inventory submitted to the United Nations in April shows that oil and gas production emissions have only been growing, reports CBC News. They’ve increased 170% since 1990, largely because emissions-intensive tar sands/oil sands production in Alberta ramped up. Absolute emissions in the tar sands/oil sands sector have skyrocketed, writes CBC, increasing 437% since 1990.
Yet oilpatch producers like Canadian Natural Resources Limited (CNRL) and Cenovus Energy claim big cuts in the emissions intensity of their oil production—the greenhouse gases they emit per barrel of oil they extract. The UN report credits three factors, writes CBC.
Reducing methane venting, flaring, and leakage has played a part. (CNRL reduced methane emissions 78% between 2012 and 2019.) And some genuine emissions reductions have come from technology upgrades and efficiency improvements.
But the third factor is really just some crafty accounting. Companies are producing and exporting more crude bitumen without first “upgrading” it to synthetic crude oil here in Canada, writes CBC. As a result, more of the emissions in each barrel fall into the emissions inventory of the importing country.
Between 2010 and 2020, non-upgraded bitumen production increased more than 130%, while synthetic crude oil production grew just 41%, Canada’s report to the UN says. “The additional energy required to process the crude bitumen (and resulting emissions) is therefore transferred downstream, mainly to export markets where the bitumen is processed at petroleum refineries,” it adds.
“It makes a difference for accounting purposes, but the atmosphere doesn’t care whether the emissions were generated in Canada or in the U.S.” Jan Gorski, director of the Pembina Institute’s oil and gas program, told CBC.
Kevin Birn, vice-president of emissions coordination at S&P Global, said non-upgraded bitumen and synthetic crude are “quite similar” in their overall emissions profile if you consider the full life cycle. “You’re doing the same sorts of things,” he said. “You’re just doing it in a different place.”