Climate activist Al Gore. Photo: CBC

Industry is committed to de-carbonizing oil sands heavy crude, Notley govt supports those efforts with ambitious regulations

Alberta loves to hate Al Gore. Who can blame it, really? His Thursday tweet supporting British Columbia pipeline opponents and taking a cheap shot at the Alberta oil sands garnered plenty of social and news media attention and set teeth gnashing east of the Rockies.  Here’s the problem: just like Vancouver Mayor Gregor Robertson and BC Premier John Horgan, Gore is utterly ignorant of efforts by the oil sands industry to clean up its act, aided by aggressive policy from the Rachel Notley government.

Former President Bill Clinton’s unctuous Veep had this to say on Twitter yesterday:

The Kinder Morgan pipeline carrying dirty tar sands oil would be a step backward in our efforts to solve the climate crisis. I stand with @MayorGregor, and all of the Canadians, including the First Nations, who are fighting to stop this destructive pipeline. #StopKM

Much of the criticism of Gore concerns his climate hypocrisy. He lives in an $8.8 million 6,500 square foot beach house on the California coast, flies to his climate gigs in a private jet, and hangs with Hollywood celebrities who live extravagant lifestyles while milking their climate activism.

Al Gore

But there is a more telling criticism of Gore’s position on the oil sands: it’s a decade out of date.

When Gore’s Inconvenient Truth documentary about the climate crisis was released in 2006 and kicked off a fractious public debate over the role of greenhouse gases in global warming, the oil sands was arguably a climate villain.

The oil sands was Canada’s fastest growing source for GHG emissions and neither government nor industry was doing much to curb that growth.

Then, in 2007, the Progressive Conservative government of Ed Stelmach introduced the Climate Change and Emissions Management Amendment Act, which included the Specified Gas Emitters Regulation that applied a $10/tonne (rising to $30/tonne by 2017) carbon tax to facilities emitting more than 100,000 tonnes of greenhouse gases annually. The goal was to lower emissions-intensity of over 100 facilities by 12 per cent over business as usual.

After a promising start, not much happened for the next decade or so. Loopholes in the SGER regulations lowered the cost per tonne and provided minimal incentive for industry to lower emissions.

Fast forward to 2015. Two things happened that dramatically changed the oil sands sector’s approach to emissions.

One, all the controversy over the years about emissions reductions leading up to the Paris Climate Accord late in the year finally got industry’s attention. The super-majors like Royal Dutch Shell, Total, and BP were already preparing for a low-carbon economy and the oil sands companies jumped on the bandwagon.

Al Gore

BC Premier John Horgan.

Two, election of the Notley NDP in May shocked the province, not least because climate policy – though without a lot of detail – was part and parcel of the party’s platform. The new premier quickly organized a climate policy advisory committee chaired by well-known economist Andrew Leach. The government accepted most of the Leach panel’s recommendations and launched the Climate Leadership Plan in Sept. with the CEOs of the four biggest oil sands producers standing on stage with Notley.

While industry was slowly ramping up emissions-reducing technology prior to 2015, Notley’s leadership shifted de-carbonization of oil sands heavy crude – supply of 2.8 million b/d out of global output of 10 or 11 million b/d – into high gear.

This comment by Suncor CEO Steve Williams is typical of the new mantra:

And why would Suncor, as a company, commit to an ambitious program to reduce its own GHG emissions? The answer to both questions is rooted in two interrelated convictions. The first is our belief that bold, ambitious action will be required by all of us to effectively tackle the climate change challenge. The second is our conviction that technology will continue to transform our industry to a place of global cost and carbon competitiveness.

Oil sands producers are convinced that carbon pricing in existing markets – in the United States, many states are busy toughening up cap-and-trade systems – and new markets (think China and India) is inevitable.

Al Gore

Vancouver Mayor Gregor Robertson.

A 2017 study by the Canadian Energy Research Institute estimated that replacing some or all of the steam in SAGD (steam assisted gravity drainage) production could reduce emissions 34 to 40 per cent, lowering carbon-intensity to that of the average American crude oil, or even lower.

Oil sands mining is busy adopting paraffinic froth treatment and related technologies to lower the carbon-intensity of its oil: Imperial Oil’s Kearl plant already turns our crude that is only two per cent higher than the American average.

These efforts are supported by the Alberta government’s new Carbon Competitiveness Incentives regulations, which consist of a carbon levy, output-based allocations, and a 100 Mega-tonne emissions cap (oil sands currently produce about 70 MT/year).

The new regulations were developed in consultation with industry.

Al Gore

Rachel Notley, Alberta premier.

That doesn’t mean all producers were happy when CCI was announced in Dec. Companies that use a lot of natural gas to create the steam that thins out bitumen enough to pump it to surface – like Husky Energy, which has some operations with a steam to oil ratio (SOR) of 8 to 1, high by industry standards – were not pleased.

But the Province is also providing $1.4 billion in a variety of innovation funds to help develop and diffuse new technologies to lower those SORs, effectively “taking carbon out of the barrel,” as industry likes to describe it.

Then there are other regulations, such as those designed to reduce fugitive methane emissions by 45 per cent by 2025, that will augment efforts to reduce SORs.

Taken as a whole, the experts I’ve interviewed believe the Notley government’s de-carbonizing policies are the most ambitious and aggressive of all the heavy crude oil producing jurisdictions in the world.

Not even California can match Alberta’s efforts.

Al Gore should drive the hundred miles or so over to Kern County just west of Bakersfield, which produces some of the world’s dirtiest oil from some of the ugliest oil fields on the planet. At Aera Belridge, thousands of pumpjacks nod up and down within just a few square kilometres of desert, some of them only a few metres apart.

Alberta is a leader in heavy crude oil emissions reduction, not a laggard. Leaders should be praised and supported, not vilified.

If Gore insists on publicly criticizing Alberta, he should at least bring himself up to date about the facts.

A lot has changed since 2006.