Kyoto Impact Upstream Oil Gas 2005 05 26 - Corvelle · File: Kyoto_Impact_Upstream_Oil_Gas.PPT 5...

File: Kyoto_Impact_Upstream_Oil_Gas.PPT 1

Kyoto Protocol Impact

IT Futures BriefingPresenter: Yogi Schulz

Kyoto Protocol Impacton the Upstream

Oil & Gas Industry

26 May 2005 Copyright © 2005 Corvelle Management Consultants


Kyoto Protocol ImpactManagement Consultants

Yogi SchulzBiography

� President of Corvelle Management Consultants

� Information technology related management consulting

� Project management and systems development

� Computing Canada & Calgary Herald columnist

� PPDM Association board member

� Industry presenter:

– Project World - 4 years

– CIPS Informatics - 7 years

– PMI - Information Systems SIG

– Convergence - 4 years

– PPDM Association - several years



PresentationOutline

� Presentation Objectives

� Global warming described

� How does the Kyoto Protocol address global warming?

� Impacts on Canada and the oil & gas industry

� Is global warming really a problem?

� Speculation about the future of the Kyoto Protocol

� Conclusions & Recommendations

� Questions & Answers



Global Warming Describedby Comic Strip Writers

I can’t believe theBush Administrationis just playinglip-service toglobal warming



PresentationObjectives

� Better understand the goals and terms of the Kyoto Protocol

� Understand some of the challenges to the Kyoto Protocol

� Appreciate the impacts that the Kyoto Protocol will have on the oil & gas industry

� Understand the source of the controversy that surrounds the Kyoto Protocol

Presentation intended to spark an ideayou can explore to reduce greenhouse gases



How does Global Warming work?



Disposition ofIncoming Solar Radiation

100 25

455

25

29100

88

25

12

70

4

Absorbedby surface

Reflectedby surface

Reflected byatmosphere

Evaporation& Thermals

Absorbed byatmosphere

Outgoing infraredradiation

Radiatedby surface

??

Greenhouseeffect

.............

. . . . . . .

.............

. . . . . . .

.............

. . . . . . . .............. . . . . . .

.............

. . . . . . .

.............

. . . . . . .

.............

. . . . . . .

.............

. . . . . . .



How has the CO2 Levelin the Atmosphere changed?

Start of theIndustrial Revolution



How has the Temperatureof the Atmosphere changed?



What are the various Greenhouse Gases?

Carbon dioxide 1 360,000 76%

Methane 24 1,721 13%

Nitrous oxide 360 311 6%

Chlorofluorocarbon-11 4,600

Chlorofluorocarbon-12 10,600

Hydrofluorocarbons 10 – 14,800 0.6 5%

Sulfur hexafluoride 22 200

Other perfluorocarbons 5,700 – 11,400

Greenhouse Gas NameWarmingPotential

Parts perbillion

Percent ofvolume


Kyoto Protocol Impact Where doGreenhouse Gas

Emissionscome from?



Impact of SUV’son Energy Efficiency



What Countries Producemost of the CO2 Emissions?



How does Global Warmingaffect the Planet?

Changing climate can:

– Alter forests, crop yields

– Reduce water supplies

– Affect human and animal health

– Change ecosystems

– Expand deserts into rangelands

– Increase precipitation and evaporation

– Intensify rainstorms

– Produce drier soils

– Raise sea level

Changes in precipitation and other local climate conditions



How does the Kyoto Protocoladdress Global Warming?

Under the Kyoto Protocol, Canada and other signatory countries, are committed to reducing their emission tonnage to 6% below what they were in 1990 by 2010

For Canada, the target 2010 level is:

� 20% below the 2002 level

� 35% below the projected 2010 business-as-usual level



Can Canada meet itsCO2 Emissions Commitment?

550

600

650

700

750

800

850

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

mT

CO

2e

Kyoto Target560 mT

810 mTLarge emitter

target

830+ mT

699

Recent revision of trend in emissions

Gov’t projection in 2001

for 2000 to 2010

725 731Actual Other policies & programs

250 – 270 mT



What creates the focuson Alberta?

� 30% of carbon dioxide

� 26% of nitrogen oxides

� 23% of sulphur oxides

� 23% of benzene

Alberta is and will be highly impacted by Federal government decisions about Kyoto implementation

Alberta supplies over 80 percent of Canada'soil & natural gas and over half of our coal

InCanada,Alberta

produces:



Approaches to meetingKyoto Commitments

� Policies and measures:

– Mandating more efficient vehicles

– Mandating lower emissions from fuel combustion

– Providing incentives for renewable energy generation

� Sink enhancement:

– Growing forests

– CO2 sequestration

� International Emissions Trading

– Buying & selling emission credits



How the Kyoto ProtocolImpacts Canada

� Places Canada at an economic disadvantage:

– Canada’s greatest trading partner and greatest source of investment capital, the United States, will not be bound by Kyoto targets

– Venezuela, Saudi Arabia and Nigeria, our major energy competitors, will not be bound by Kyoto targets

� Reduces economic growth/reduced job growth:

– Federal government predicts that job losses from Kyoto Protocol will range from 67,000 to 240,000

– Canada could potentially spend from $2 - 6 billion in purchasing international emission credits; eliminates no emissions

� Reduces greenhouse gases marginally

– Without commitments by all major emitters, the Kyoto Protocol will deliver only about a 1% reduction in global greenhouse gas emissions

� Improves environmental quality barely



How the Kyoto Protocol couldImpact the Oil & Gas Industry

� Increased production costs:

– CO2 collection and sequestration

– Reduced methane leakage from facilities

– Further flare gas collection

– Further reductions in emissions from combustion

� Reduced production/Partial shutdown:

– Reduced investment

– Reduced employment

– Reduced royalty & tax payments

– Higher prices for gasoline & natural gas



Is Global Warming really a Problem?What does history tell us?



Is Global Warming really a Problem?What do predictions tell us?

Projected temperature increaselies within long-term historicaltemperature variation range



Call for Action onGlobal Climate Change

There is potential for sudden and perhaps catastrophic [climate] change.

The fact that we are uncertain [about the climate impact of the rise in atmospheric temperature] may actually be a reason to act sooner rather than later.

Eileen Clausen

President

Pew Center on Global Climate Change



Kyoto Protocolas Wealth Redistribution

The Kyoto Protocol is a prime piece of the embodiment of a massive, grand, global scheme for redistribution of the world’s wealth from "abilities" to "needs" -- a scheme which has flamed in the hearts of egalitarians of all stripes and "-isms" for ten thousand years of known human history.

Floy Lilley, Esq.

The University of Texas at Austin



Challenges toProponents of the Kyoto Protocol

� Increases in carbon dioxide cause increases in temperature

� Temperature increases lead to more costs than benefits

� Emissions controls are the most efficient means of "solutions"

� Early measures are superior to later measures

� Emissions controls can be monitored and enforced

� Governments will approve the control measures

� It is desirable to control emissions in the rich countries even if emissions are not controlled in poor countries

William Niskanen, Chairman of Cato Institute, challengedproponents to demonstrate the accuracy of the these statements



Supplements to theKyoto Protocol

� Reduce energy consumption

– Reduce automobile use; reduce size of vehicles; improve insulation

� Accelerate investment in emerging energy technology

– Wind power, more efficient & hybrid engines

– Improve combustion

� Improve energy intensity

– Reduce energy consumption per unit of economic output

� Introduce market-driven control mechanisms such as internationally harmonized carbon taxes



Speculation about the Futureof the Kyoto Protocol

� Widespread cheating in reportingof emission reductions

� Revisions to the Kyoto Protocol:

– Reduction in emission targets

– Extension of the timeline

� Pressure to include nations now exempt

� Signatories admit inability to meet targets; decline to purchase credits

Success as contemplated is unlikely



Conclusions

� Kyoto Protocol will have limited impact on reducing greenhouse gases

� Kyoto Protocol will have limited impact on reducing global warming

� Kyoto Protocol may reduce economic growth of nations that pursue implementation rigorously

� Kyoto Protocol will transfer wealth to nations that can sell credits



EnvironmentalSensitivity



Recommendations

� Individually lobby governments. Support efforts to:

– Reduce greenhouse gas emissions

– Minimize adverse economic impacts

– Bring major emitting nations into the Kyoto Protocol

� Consider greenhouse gas impacts in our personal buying decisions

� Identify opportunities at Nexen to:

– Reduce energy consumption

– Reduce greenhouse gas emissions



Questions &Discussion



1800, 250 - 6th Ave. S.W.Calgary, Alberta Canada T2P 3H7

Phone/Fax: (403) 249-5255E-mail: [email protected]

Web: www.corvelle.com

Information technology related management consulting

Project management and systems development

Computing Canada & Calgary Herald columnist

PPDM Association board member

Kyoto Protocol Impacton the Upstream Oil & Gas Industry

Management Consultants



Summer Vacation Stories



Potential Future TopicsUpstream Business Themes

� How much exploration & production software is enough?

� Linking IT investments in exploration & production to business value

� Cost-benefit analysis

� Potential impact of an Avian flu epidemic

� Working from home; Telecommuting; Workforce demographics

� Globalization

� Regulatory compliance

� Overview of what specific Nexen business units are doing

� Technologies for offshore drilling

� Past, present and future of oil & gas technologies that use IT: mapping, reservoir modeling, seismic interpretation, drilling



Potential Future TopicsUpstream Technology Themes

� Windows vs. Linux vs. UNIX – Desktop and server

� Convergence of voice, data, videoconferencing to IP

� Document and content management trends

� GIS

� Emerging IT trends – O/S, Java, process flows, work flows, middleware

� Define value that IT brings to business

� Holistic approach to computing – business, IT, human beings

� Data management

� Security

� Knowledge management as it pertains to IT

� Collaboration



Gasoline StationLine-ups



Bibliography- 1

� After Kyoto: Alternative Mechanisms to Control Global Warming

– William D. Nordhaus, Yale University

– www.econ.yale.edu/~nordhaus/homepage/PostKyoto_v4.pdf

� Alberta to Propose Kyoto Alternative; Americans Mostly Unconcerned About Global Warming

– www.globalwarming.org/article.php?uid=378

� Australia State of the Environment Report 2001 (Theme Report)

– www.deh.gov.au/soe/2001/atmosphere/atmosphere02-16.html

– www.deh.gov.au/soe/2001/atmosphere/atmosphere02-18.html

� Beyond Kyoto Print Mail - Real Solutions to Greenhouse Emissions from Developing Countries

– By Roger Bate, David Montgomery

– www.aei.org/publications/pubID.20982/pub_detail.asp



Bibliography- 2

� Canada's Greenhouse Gas Inventory 1990-2000

– June 2002

– www.ec.gc.ca/pdb/ghg/1990_00_report/appb_e.cfm

� Canadian Climate Impact Scenarios

– www.cics.uvic.ca/scenarios/index.cgi?More_Info-Emissions

� Climate Change Plan for Canada

– www.climatechange.gc.ca/english/publications/plan_for_canada/

� Clouds Over Kyoto - The Debate Over Global Warming

– by Jerry Taylor

– www.cato.org/pubs/regulation/regv21n1/21-1f6.pdf

� The Convention on Climate Change - Key Issues; Impacts on U.S. Law

– www.sovereignty.net/floy/kyoto.html

� Costs and Benefits of Greenhouse Gas Reduction

– October 1995

– www.accf.org/publications/reports/sr-costsbenefitsggr95.html



Bibliography- 3

� Demonstrating Carbon Sequestration

– www.geotimes.org/mar03/feature_demonstrating.html

� EIA Country Analysis Briefs – Canada

– www.eia.doe.gov/emeu/cabs/canada.html

� Energy in the Americas

– www.eia.doe.gov/emeu/cabs/archives/theamericas/theamericas.html

� Environment Canada - The CORE Network

– www.msc.ec.gc.ca/core_network/index_e.html

� EPA – Climate Change

– yosemite.epa.gov/OAR/globalwarming.nsf/content/Climate.html

� Evidence of Global Warming

– rst.gsfc.nasa.gov/ Sect16/Sect16_2.html



Bibliography- 4

� Geographical Portal for Climate Change

– ceonet.ccrs.nrcan.gc.ca/insertcomponent?METHOD=get&URL=http://www.geoconnections.org/ccportal/www/index_e.html

� GHG Registries

– www.ghgregistries.ca/index_e.cfm

� Global Warming

– BusinessWeek, 16 August 2004, p. 60+

� Global warming blamed for earlier springs

– Calgary Herald, 17 May 2005, p. A13

� The Greenhouse Effect & Global Climate Change

– telstar.ote.cmu.edu/environ/m3/s2/07ghe_climchg.shtml

� Greenhouse Gases and Society

– by Nick Hopwood and Jordan Cohen

– www.umich.edu/~gs265/society/greenhouse.htm

� Hot air over Kyoto: The United States and the politics of global warming

– www.facstaff.bucknell.edu/pagana/mg312/kyoto.html

� Harvard International Review - Winter 2002; Timothy Wirth

– www.facstaff.bucknell.edu/pagana/mg312/kyoto.html



Bibliography- 5

� Images from “The Greenhouse Effect and Climate Change”

– www.bom.gov.au/info/climate/change/gallery/index.shtml

� Intergovernmental Panel on Climate Change (IPCC)

– www.ipcc.ch

� Kyoto – First of ten steps towards a CO2 free future

– www.wwf.ca/NewsAndFacts/NewsRoom/default.asp?section=archive&page=display&ID=1370&lang=EN

� Kyoto Protocol To The United Nations Framework Convention On Climate Change

– unfccc.int/resource/docs/convkp/kpeng.html

� Kyoto's Impact On Alberta's Energy Industry

– www.caronpartners.com/Practices/Other/Articles/Kyoto_Impact.htm

� Line Graphs of Temperature and Atmospheric CO2 Concentration Over the Past 400 000 Years (from the Vostok ice core)

– atlas.gc.ca/site/english/maps/climatechange/figure_1.jpg/image_view



Bibliography- 6

� The Main Greenhouse Gases

– www.pewclimate.org/global-warming-basics/facts_and_figures/mainghgs.cfm

� Moving Forward on Climate Change: A Plan for Honoring our Kyoto Commitment

– www.ec.gc.ca/climate/NewCCplan_e.html

� MyKyoto.ca

– www.mykyoto.ca

� One-Tonne Challenge

– www.climatechange.gc.ca/onetonne/english/

� Pembina Institute - Assessment by Canadian Environmental Leaders of the Government’s Kyoto Implementation Plan

– www.pembina.org/newsitem.asp?newsid=137&section=

� Pembina Institute - Climate Change

– www.pembina.org/climate_change.asp

� Pembina Institute - International Eco-Solutions

– www.pembina.org/international_eco.asp

� Potential impacts of climate change

– www.grida.no/climate/vital/impacts.htm



Bibliography- 7

� Ralph Klein - Speech to the Empire Club

– www.gov.ab.ca/premier/dsp_speech.cfm?content=37&Year=2002

� Sequestering of CO2 in Oil Sands Composite Tailings

– www.nrcan.gc.ca/mms/canmet-mtb/mmsl-lmsm/mines/control/photos/pages/oilsands-e.htm

� Shop Smart Buy Green

– A consumer's guide to saving money and reducing environmental impacts

– www.deh.gov.au/industry/corporate/eecp/publications/shop.html



Bibliography- 8

� Taking Action on Climate Change

– www.climatechange.gc.ca/english/

� The United Nations Framework Convention on Climate Change

– http://unfccc.int/2860.php

– unfccc.int/essential_background/convention/items/2627.php

� Vital Climate Graphics

– www.grida.no/climate/vital/index.htm

� Where do Greenhouse Gas Emissions come from?

– www.c2p2online.com/main.php3?doc_id=405&section=157

� Who are the Main Carbon Polluters?

– www.panda.org/about_wwf/what_we_do/climate_change/problems/polluters.cfm



Greenhouse Gasesby Source

Canada2000



CO2 Parts per MillionHawaii

Increase: + 18%in only 50 years



Sources of CO2by Country



CO2 Production per capitaBy Country



Eastern Europe/Former Soviet Union



Can Canada meet itsCO2 Emissions Target?

480 millionMetric tons

To comply with the Kyoto Protocol,Canada will have to achieve a reduction of

270 - 300 million metric tons by 2010

Kyoto Impact Upstream Oil Gas 2005 05 26 - Corvelle · File: Kyoto_Impact_Upstream_Oil_Gas.PPT 5...

Documents

Transcript of Kyoto Impact Upstream Oil Gas 2005 05 26 - Corvelle · File: Kyoto_Impact_Upstream_Oil_Gas.PPT 5...