OIL AND GAS:

Major emissions increase expected from Canada's oil sands -- study

Any greenhouse gas emission cuts achieved by Canada will be nullified if the country proceeds with development of its oil sands, according to an under-the-radar government report released last month.

The Environment Canada study tracked and projected greenhouse gas output across several sectors between 2005 and 2020. During that period, researchers expect electricity generators to cut emissions by 31 megatons of CO2 equivalent as gas-fired power plants replace coal-fired ones. However, those savings will be offset by 62 megatons of emissions from oil sands.

Once reductions from pipelines, refining and non-oil-sands production are taken into account, the authors estimate the oil and gas sector will see its emissions rise by 46 megatons. On a nationwide scale, greenhouse gas outputs will increase by 54 megatons, they said.

Analysts said they were surprised to see such a jump in emissions by the oil and gas sector.

"This is the first time we've seen just exactly the difference between the different sectors, and just how out of line the oil sands emissions are," said Simon Dyer, policy director at the Pembina Institute.

Oil executives said the report's predictions failed to account for likely technological advances.

"You'll see some significant reductions going ahead," said Steve Laut, president of Canadian Natural Resources Ltd. He said his company has installed a carbon capture and storage system beneath one of its oil sands mines that could provide "up to a 20 percent reduction" in per-barrel emissions.

Canadian officials say they will defend the lucrative industry against emission limitations.

"I'm not interested in Kyoto-style policies," said Energy Minister Ron Liepert. "That's something that was the previous liberal government. We're working with the current government to ensure that we do what we can, but at the same time we're not going to cripple the Canadian economy."

Environmental groups have said that allowing emissions increases could instead have the effect of crippling the industry. Dyer of the Pembina Institute pointed to debates over the extension of TransCanada's Keystone XL pipeline into the United States. The project has been delayed due to concerns surrounding emissions from Canada's oil sands.

"Canada's failure to act on greenhouse gas pollution is starting to be an economic liability," Dyer said (Nathan Vanderklippe, Toronto Globe and Mail, Aug. 7). -- PK

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