5. EMISSIONS:

Climate impact of Canada's oil sands generates heat in Congress today

Published:

Witnesses will present two starkly different views of the carbon footprint of the Canadian oil sands at a congressional hearing today.

The statements in official prepared testimony -- released late yesterday by the House Energy and Commerce Committee -- insert climate change into the debate about the oil sands as the president heads this week to Cushing, Okla. There, he is expected to reiterate support for TransCanada's effort to build the Cushing-Gulf Coast portion of Keystone XL, a pipeline that would carry oil sands crude to U.S. refineries.

In their prepared testimonies for the committee, environmentalists will say that greenhouse gas emissions from the oil sands have more than doubled over the last decade and threaten Canada's climate commitments.

Representatives from Alberta, Canada, and several companies, meanwhile, will discuss an array of developing technologies aimed at reducing emissions in the Canadian oil patch.

"The evidence of climate change is compelling and terrifying ... I believe 'harm reduction' is the most pragmatic option," says John Nenniger, CEO of N-Solv Corp., in his written statement.

Nenniger will discuss his company's technology, which will be tested as part of a $60 million field test supported by Suncor Energy, to use a condensing solvent to loosen gooey bitumen, or Canadian petroleum, out of the ground. The pilot should be producing oil by April 2013, he says.

Efforts to cut use of natural gas

Because the process avoids burning natural gas to heat steam commonly used to free the oil, the solvent method also could reduce energy used in the oil sands by 85 percent and cut emissions as a result, says Nenniger.

Similarly, another corporate project envisions using electromagnetic heating rather than steam to loosen thick bitumen, with a goal to reduce greenhouse gases by 50 percent in comparison to other methods, says Eddy Isaacs, CEO of Alberta Innovates, an organization backed by the provincial government.

The group is collaborating with numerous North American organizations, including the Pacific Northwest National Laboratory and the University of Ottawa, to study how to capture carbon dioxide from oil sands operations, he states.

Murray Smith, former Albertan energy minister and president of Murray Smith & Associates, points out that the chief method for loosening deep underground bitumen -- injecting steam underground -- did not exist for commercial operations a decade ago. The same public-private framework that helped bring the steam method to commercial development now exists to improve innovations for cutting emissions, he says.

"The oil sands have been the world's engineering 'sandbox,'" he says.

Representatives from an environmental think tank and a member of the Lubicon Cree First Nation, however, will testify that the technology improvements will do little to change the ultimate dynamic of the oil sands -- that they are raising carbon dioxide emissions rapidly while putting the environment at risk of oil spills and other problems.

"The commercial application of new technologies is simply not keeping pace with expansion, and as a result the vast majority of new production will rely upon conventional, more polluting technology," says Simon Dyer, a policy director at the environmental think tank Pembina Institute, in his statement to Congress.

Carbon capture remains expensive and untried

In his testimony, Dyer says that an analysis from the Pembina Institute found that Alberta's climate targets rely on carbon capture and sequestration to achieve 70 percent of the province's greenhouse gas reduction target. Since there are no operating CCS projects in the oil sands region to date, the reliance on carbon capture is "not economic under current policies," he says.

One planned integrated project by Royal Dutch Shell PLC that would capture CO2 from an oil sands facility is still in the works, but it also received $865 million in subsidies from the governments of Canada and Alberta, Dyer says. That level of investment has not occurred with other proposed oil sands projects.

Projected costs to deploy carbon capture systems in the oil sands range from $75 to $230 per metric ton of carbon dioxide, Dyer states. The province's much lower carbon price -- of $15 per metric ton -- means that there will "be no deployment of CCS in the oil sands beyond" Shell's project.

In the meantime, the province is on track to reduce emissions by less than a third of its stated goal of 50 million metric tons of CO2 for 2020, according to Pembina.

The Canadian oil industry also is relying more heavily on in situ oil sands production, rather than mining. The process disrupts the surrounding environment less, because it involves underground injection of steam rather than wide-scale digging of earth, but also increases greenhouse gases more than mining because of its natural gas usage.

In situ is part of the reason greenhouse gas emissions from the oil sands have more than doubled over the last decade, Dyer says. The amount of CO2 emitted per barrel of oil also has increased over the past six years, he says.

New research and voluntary measures are not a bad thing, but it is important to distinguish among lab research, small test pilots, and technologies and policies that could achieve large-scale reductions, Dyer says.

Oil price debate escalates

Additionally, Melina Laboucan-Massimo, a member of the Lubicon Cree First Nation and member of Greenpeace Canada, will testify how her family members experienced headaches, burning eyes and dizziness after an oil spill in Alberta last spring. She says she is worried about elevated rates of cancer near oil sands operations and lowered drinking water quality.

"When companies violate environmental regulations we rarely hear of these companies being prosecuted," she says in her testimony.

The hearing comes as Republicans and some Democrats continue to look for legislative vehicles to overturn President Obama's rejection of a cross-border permit earlier this year for the full version of Keystone XL, which would have run from Canada to Texas. Critics of the president have said the denial will reduce oil supply and kill jobs, while Obama supporters say the denial will have no impact on oil prices because of an existing oil glut in the Midwest.

The city Obama will travel to, Cushing, Okla., is the oil hub where TransCanada recently announced it would begin construction of the portion of Keystone XL running from Oklahoma to the Gulf Coast. The company also said it would apply later for a new presidential permit for the northern portion of the project.

"There is certainly a long-standing tradition of presidents traveling around the country to highlight the agenda that they're pursuing, their policy agenda," White House spokesman Jay Carney said yesterday when asked whether the trip was designed to rebut political attacks about oil prices and other energy issues.