What in the World? Canada and GHG Management Michal C. Moore Senior Fellow The Institute for...
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![Page 1: What in the World? Canada and GHG Management Michal C. Moore Senior Fellow The Institute for Sustainable Energy, Environment and Economy University of.](https://reader034.fdocuments.in/reader034/viewer/2022051201/5a4d1b617f8b9ab0599ad79c/html5/thumbnails/1.jpg)
What in the World?Canada and GHG Management
Michal C. MooreSenior Fellow
The Institute for Sustainable Energy, Environment and EconomyUniversity of Calgary
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An emerging, thoughtful, if hesitant and discontinuous, approach to carbon impacts and the future
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CanadaEnergy and Resource Rich
Major Industries– Thermal Energy Generation– Oil and gas extraction and processing– Pulp and Paper generation– Cement and lime production– Chemical production– Mining, smelting and refining– Iron and Steel production
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Oil Sands
Canadian Population Concentrated Near Border
Hydrocarbon Resources e.g. OilSands Concentrated in non-shield areas
WesternSedimentaryBasin
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The Oil Sandsan overview
• 174 Billion Barrels of economically recoverable oil (>$35/bbl US)
• Surface mining and in-situ extraction (SAGD)• Upgradable to synthetic equivalent of light crude• Output should exceed SA by 2047 at current rates• Water, energy, transport intensive• Bitumen extraction and upgrading produces >2x
GHG emissions per barrel as conventional crude• Concentration of emissions close to production
site, creating potential sequestration economies of scale
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Source: US EIA
Oil Sands Unconventional Oil Productionhas begun to rapidly increase
Initial export focused on USnow increasing to China& in the future to India
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Carbon is the Key for GHG
• Carbon is synonymous with GHG emissions, a principal catalyst for global warming
• There are six main GHG’s all expressed as a ratio to CO2
– Methane (CH4) 21
– Nitrous Oxide (N2O) 310
– Hydroflourocarbons (HFC’s, HFC23) 11,700– Perflourocarbons (PFC’s)– Sulphur hexaflouride (SF6)
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Policy Drivers in Canada• Emerging Evidence
– Glaciers– Temperature– Crop cycles, breeding cycles– Permafrost changes
• Politics– Kyoto signing– Lawsuits– Emergence of alternative markets e.g. enhanced oil recovery
• Uncertainty and risk– Insurance payments– Trade disruption
• Basic Science Research
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Coincident with Expansion of Oil Sands Activity, GHG emissions have increased
… and exceeded Kyoto targets
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Overall energy demand increasedeven with energy efficiency
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Changes in air pollution indicatorsare regionalized and coincident with population
and political centres
the trend is generally up
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Alberta is the Principal Generatorof new supply and of GHG
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Official and Unofficial Acknowlegment of carbon constraints
• Kyoto• Project Green• High corporate responsibility• Still slow on energy efficiency• Missing linkage to corporate finance depts
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Emerging Long-term Strategies(post Kyoto planning was missing or inconclusive)
• Hedging to reduce risk• Technology investment• Emblematic trading markets
– European Union Emissions Trading System (ETS)
– Chicago Climate Exchange– New South Wales Emissions Trading system
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Corporate Actions
• Suncor - published carbon profile• Transalta - emission reduction trading • TransCanada - product transport• EnCana - sequestration
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Public Actions• New Renewables interest• Developing interest in demand management• New Carbon trading marketMarket liquidity
– Cdn Federal Gov’t price assurance for compliance $15/tonne CO2 equiv.
– Companies may find it easiest and least risky to purchase non tradable credits from govt, since marginal abatement costs usually in excess of 15/tonne
• Rule change probability• Credit lifespan• Post Kyoto
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Examples
• Weyburn - sequestration• New TransCanada Project
Belle Plaine (syngas)• AICISE - Alberta Ingenuity Centre for In-
situ Energy
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Challenges That Will Influence Oil Sands Operations
(and consequent GHG emissions)
Competitive marketsLong term cost of fuelTransport challengesFuture cost of carbon reduction creditsDifference in domestic v intl marketsPolicy uncertainty
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Future Commitment
• Morality• Market demand• World actions, primarily US policy• Liability and culpability
– Sarbanes-Oxley and Canadian Equiv.
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Advice Givenand beginning to be taken
There are a number of compelling legal and economic reasons that corporations would be well advised to give careful consideration to the issue of climate change and even develop their own climate change action plan in advance of any regulatory requirement. . . . [T]here is reason for genuine concern that liabilities may be lurking for those who neglect the issue now, to the later detriment of the corporation and its shareholders.
J. Healy and J.M. Tapick, “Climate Change: It’s Not just a Policy Issue for Corporate Counsel - It’s a Legal Problem,” Columbia Journal of Environmental Law, 29 (2004), pg 93