Canada will have no hope of meeting its relatively modest greenhouse gas reduction target for 2030 unless it phases out all tar sands/oil sands production by that year, according to new modelling by two University of Toronto geographers.
“Only with a complete phaseout of oil production from the oil sands, elimination of coal for electricity generation, significant replacement of natural gas-fueled electricity generation with electricity from carbon-free sources, and stringent efficiency measures in all other sectors of the economy could Canada plausibly meet its 30% target,” write professor Danny Harvey and MSc candidate Lika Miao on Policy Options.
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But that’s just as well, since “expected improvements in the performance and reductions in the cost of electric vehicles, combined with across-the-board improvement in the efficiency of cars and trucks, could see a permanent collapse in the price of oil by 2030, if not sooner, rendering oil sands oil a permanent money loser,” they add. “Thus, the most urgent task related to the oil and gas industry in Canada is to plan an orderly phaseout of oil sands oil production—before such a phaseout is imposed by external economic forces.”
Using federal government data, Harvey and Miao calculated greenhouse gas emission reductions across four scenarios: a freeze on tar sands/oil sands production at 2014 levels, a full phaseout by 2030, a full phaseout combined with elimination of coal- and oil-fired electricity generation in favour of natural gas, and all the above plus shifting half of the natural gas capacity to carbon-free electricity. The most ambitious scenario only lands “two-thirds of the way toward Canada’s 2030 target,” they report.
Next, Harvey and Miao looked at the emissions reductions in other sectors that would be needed to hit the 2030 goal with tar sands/oil sands production increased, frozen, or phased out. The Increase and Freeze scenarios necessitated 39 and 29% reductions in other sectors, respectively, an expectation the two researchers considered “unachievable, as they are in addition to the emissions reductions that are already embedded in the [Environment and Climate Change Canada] 2030 baseline scenario.” The 16% required from other sectors alongside a tar sands/oil sands phaseout “would require a substantial effort, but—with a coordinated effort involving building codes, a national building renovation program, stringent efficiency standards for automobiles and trucks without loopholes, and other timely measures—it should be achievable.”
And with domestic oil consumption down 16% compared to current federal projections, “Canada could be self-sufficient in oil (in fact, have a small surplus) while phasing out its carbon-intensive oil sands oil production and honouring its climate change commitment.”
Harvey and Miao argue that a tar sands/oil sands phaseout must be seen as a national project for Canada, just as the quest for bitumen production was itself treated as an economic priority from 1913 on. What will make that easier, they say, is that “oil sands operations do not represent as large a fraction of the Canadian economy and even of the Alberta economy as one might think: the direct contribution of the entire oil, gas, and mining sector to Alberta’s 2016 GDP was 16.4%, of which oil sands mining and processing was likely about one-third.” Tar sands/oil sands royalties “accounted for only $1.2 billion out of $42.5 billion of provincial revenue in 2015-16, while production represented only 2% of Canadian GDP.
“With a gradual (12- to 15-year) phaseout of oil sands operations, workers and capital can be redeployed to emerging sectors (renewable energy and building retrofits, among others),” they note. “Nevertheless, we need to begin a national conversation now about how to wind down the tar sands operations in an equitable way, and we have little time to lose.”