Musings: Did The Oil Sands Win Over Europeans With Report?

Last week the battle over the "dirty" oil from the oil sands reached a crescendo with the release of a study claiming that on a global scale, oil sands carbon emissions are not as bad as those that would be released by burning all the world's coal resources. Moreover, the study's conclusion shows oil sands emissions are actually less than those from other heavy crude oils being burned. This report came merely days before a decision requiring greater environmental offsets for use of the fuel was to be rendered by the European Union (EU) Fuel Quality Directive Committee composed of experts from each of the 27 member countries of the EU. This committee was considering a proposal to revise the EU Fuel Quality Directive that has a mandatory target for fuel producers and suppliers to reduce greenhouse gas emissions (CO2) by 6% from 2010 levels by 2020. 

The study's conclusion shows oil sands emissions are actually less than those from other heavy crude oils being burned

While the proposal would not have banned the importation and use of oil sands bitumen, it would have assigned it a carbon footprint that is 23% greater than that of conventional crude oil. This would force users of oil sands bitumen to make significant improvements in their operations to offset the additional carbon emissions or buy green credits from others under the mandatory greenhouse gas reduction target. For all practical purposes, the ruling would have been the equivalent of a ban. For Canada, this would be a problem as other governments around the world might use the EU determination as grounds to ban or restrict the use of this bitumen. That would shrink the markets available for this rapidly expanding output, with potentially significant implications for Canada's and Alberta's economy and employment.

The Committee failed to approve the policy as the vote was 89 for, 128 against with 128 abstentions. The Committee was using a qualified majority voting system that awards more votes to larger country members. Belgium, Germany, France, Cyprus, the Netherlands, Portugal and the U.K. all abstained. Had the proposal received 255 votes the ruling would have gone immediately into law. The proposal will now be considered in June by the Council of Europe, which is composed of the ministers from the 27 member countries in the EU. 

It would have assigned it a carbon footprint that is 23% greater than that of conventional crude oil

The new study conducted by researchers Andrew Weaver and Neil Swart and published in Nature magazine, calculates the climate impact of producing the oil sands bitumen against other fuels. Dr. Weaver is the Canada Research Chair in Climate Modeling and Analysis at the University of Victoria and a recognized Canadian climate expert who was a lead author with the UN Intergovernmental Panel on Climate Change (IPCC). Dr. Weaver and his doctoral student decided to go looking for the figures to respond to a claim made during Congressional hearings on the Keystone pipeline by NASA scientist and author James Hansen, a global warming proponent, who called the oil sands "the biggest carbon bomb on the planet." He also said that if the Keystone pipeline was approved it was "game over" for our population. The study prompted immediate environmental and media attention as the conclusions by such a noted climate scientist challenged the "proven science" and the linkage to man-made global warming. 

To understand the thrust of the research study and its conclusions, we quote from Dr. Weaver's blog. "We asked the question as to how much global warming would occur if we completely burned a variety of fossil fuel resources. Here is what we calculated for the following resources:

" 1.tar sands under active development: would add 0.01°C to world temperatures.
" 2.economically viable tar sands reserve: would add 0.03°C to world temperatures.
" 3.entire tar sands oil in place which includes the uneconomical and the economical resource: would add 0.36°C to world temperatures.
" unconventional natural gas resource base: would add 2.86°C to world temperatures.
" coal resource base: would add 14.8°C to world temperatures.

"In other words: Coal presents a climate challenge 1500x greater than that presented by the oil sands."

The chart in Exhibit 1 from the study shows the relative contribution to increased global temperatures from burning all the resources for each specific fuel. While it is impossible to see, there is a slight heavy black line at the top of the Unconventional oil bar that represents the impact from burning the proven oil sands reserves. The Alberta oil sands bar represents the impact of burning all the oil

Exhibit 1. Global Warming Contribution Of Fuels

sands resources including the proven reserves. One thing not considered in this study was the greenhouse gas emissions from the extraction and refining processes for each of these fuels. Some environmentalists have tried to make a lot about that omission given their view that all the oil sands output is mined, which really represents a small portion of total production that will become smaller going forward.

There are several points about this study and the EU debate that need to be made. While Dr. Weaver's conclusions have been seized upon by the supporters of the oil sands development, he pointed out that it was not being given a "get-out-of-jail-free" card. Dr. Weaver still believes we need to break our addiction to fossil fuels and he is opposed to the Gateway pipeline to move oil sands bitumen to Canada's west coast for export. He sees too many potential environmental problems including the risk of ship accidents, along with the need for the country to honor the wishes of the First Nation populations over whose land the pipeline would have to travel and who are opposed to it. Dr. Weaver is also concerned that the development of the oil sands will leave North Americans complacent about the need to develop less polluting energy sources.

Dr. Weaver still believes we need to break our addiction to fossil fuels and he is opposed to the Gateway pipeline to move oil sands bitumen to Canada's west coast for export

With respect to the EU debate, it is interesting that it is even ongoing since no oil sands bitumen is exported by Canada to Europe. On the other hand, European countries import Venezuelan, Angolan and Middle Eastern heavy oils that create as much or more carbon emissions than oil sands bitumen. Without classifying all these heavy oils as dirty and assigning them greater carbon footprints, the EU opens itself up to being taken to the World Trade Organization (WTO) by Canada. According to the WTO, nations must adhere to the "national treatment" rule that means a country cannot discriminate against imports in favor of "like" domestic products. Numerous cases at the WTO have determined that "likeness" is based on the intrinsic nature of the goods and not how they were made. Likeness is determined by physical properties, usage and whether the goods compete in the same market. The question will come down to whether a different standard can be applied to oil sands bitumen that is "like" conventional fuels in terms of physical and chemical properties, end-usage and competes in the same fuels market.

Exhibit 2. Oil Sands CO2 Below Other Heavy Oils

The oil sands battle is but one of many wars over fossil fuels underway. Joe Romm of Climate Progress and a leading global warming proponent puts the argument against the oil sands in the following language: "There are big pools of carbon that the world must not burn. Since the United States is responsible for more cumulative CO2 emissions than any other country and has to cut emissions by more than 80% in four decades to do our fair share to avert catastrophe, it's quite safe to say that from America's perspective, the huge pool of unconventional oil vastly dirtier than conventional oil up north is definitely on the no-burn list." He claims this is a reasonable summary of the case against the oil sands that has been made by Dr. Hansen.

Mr. Romm uses the chart in Exhibit 3, taken from a forthcoming paper by Dr. Hansen to substantiate his point about pools of carbon that shouldn't be burned. We suggest you look at the emissions from Unconventional Gas bar on the far right side of the chart, which is as tall as the coal emissions. Unconventional gas is about to move to the center of the stage in the battle over fossil fuel development. If you thought all the battles over hydraulic fracturing

Exhibit 3. Attack On Unconventional Fuels

were winding down, be prepared because the war is just beginning and it will be led by one of the highest profile global warming proponents.

G. Allen Brooks works as the Managing Director at PPHB LP. Reprinted with permission of PPHB.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Andrew | Mar. 4, 2012
"One thing not considered in this study was the greenhouse gas emissions from the extraction and refining processes for each of these fuels." It will take a lot of unconventional fracked shale gas to get bitumen out of the tar sands. The tar sands have a pretty disappointing Energy Return on Investment (EROI).

Lorne Onstad | Feb. 29, 2012
The media and the global warming proponents like to have a large visible target, and that fits the oil sands quite well. The research how ever when viewed from all perspectives will show that the oils sands emissions in Alberta Canada are far less than almost all of the other heavy oil options currently favored by many European countries. And as they may have a considerable financial interest in those options this bodes well for their voice being lended to any movement against the oil sands. This has turned into far more of a political issue than an environmental issue and this also fits into what the global warming proponets are trying to say. If it is all examined on a equal scale globally the oil sands is very low on the list of problems we are facing in regards to global warming from fossile fuel production.


Our Privacy Pledge

More from this Author
G. Allen Brooks G. Allen Brooks
Managing Director,
 -  Musings: Outlook for The US Offshore I... (Mar 22)
 -  Musings: Low Prices And Liberal Politi... (Feb 12)
 -  Musings: Dog Days of Summer Bring a Ne... (Sep 22)
 -  Musings: Are We Entering The Capitulat... (Aug 25)
 -  Musings: A Retrospective View of A Res... (Aug 11)

Most Popular Articles

From the Career Center
Jobs that may interest you
Accounting Manager
Expertise: Accounting
Location: Houston, TX
Executive Assistant
Expertise: Executive|Secretarial or Administrative
Location: United States
Senior Accountant
Expertise: Accounting|Financial Analyst|Financial Audit
Location: Houston, TX
search for more jobs

Brent Crude Oil : $52.67/BBL 1.91%
Light Crude Oil : $51.6/BBL 2.60%
Natural Gas : $3.17/MMBtu 2.76%
Updated in last 24 hours