STOP: Stop Tar Sands Operations Permanently

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Big Oil talks Carbon Tax

Posted by mhudema on June 26, 2008

OK, Alberta oil producers, start thinking carbon taxes

From Wednesday’s Globe and Mail

You might have recently seen newspaper advertisements for Suncor Energy, the oil-sands producer, touting its record in fighting greenhouse-gas emissions.

Suncor, relatively speaking, has been one of the most environmentally conscious oil companies. Rick George, the company’s president and CEO, has spoken often about environmental challenges.

Suncor’s ads, and its recently released progress report on climate change, show it has decreased the intensity of its energy use, thereby reducing greenhouse-gas emissions while investing in several renewable energy projects.

All commendable. Intensity improvements, the preferred policy choice of the Conservative governments of Alberta and Ottawa and the industry, do reduce the growth of emissions. But Suncor’s report also shows that absolute emissions continue to grow, and sharply. Suncor plans to increase capacity to 550,000 barrels a day by 2012. As a result, from now until then, emissions will soar to 25.5 million tonnes of carbon dioxide from 11.5 million.

Suncor’s carbon-dioxide emissions, according to its own report, will rise by 14 million tonnes in the next five years. Suncor is only one major oil-sands producer. Spread Suncor’s kind of increase over the exploding production from other oil-sands plants, and you get some idea of why Alberta’s own climate-change policy forecasts an increase in greenhouse-gas emissions by 20 per cent by 2020.

On Monday, Alberta got a taste of what’s to come when the U.S. Conference of Mayors adopted a resolution challenging the use of fuels from high-polluting sources such as the tar sands. What’s coming, especially after the U.S. election, will be all sorts of pressure directed at Alberta’s oil sands from environmentalists and politicians south of the border.

Against this, the Alberta government proposes a $25-million ad campaign. A more useless expenditure of money could scarcely be contemplated, because the case Alberta will make will be so weak. The ads will merely draw attention to this weakness. Of course, Alberta reflexively opposed the federal Liberals’ carbon shift plan: higher taxes on carbon-producing fuels (except gas) in exchange for lower taxes on incomes and business.

Alberta business and energy producers elsewhere should think before they shoot off their mouths. Here’s why. Suncor, like many oil companies, has been very sensitive to being singled out for greenhouse-emission reductions. The industry’s mantra has been: We produce; others consume. Suncor calls it a “wells to wheels” analysis.

It’s unfair, claims the Alberta-based industry, to make the industry and Alberta bear a disproportionate burden of emission reductions. What about all those drivers? In particular, what about all those drivers and energy users in Ontario and Quebec? There are a lot more of them there than in Alberta.

So, for two reasons – sharing the greenhouse-reduction burden beyond the oil industry, and sharing it across the country – the oil companies should hold their fire before lining up behind their provincial government’s knee-jerk reaction.

Because what’s the alternative? A cap-and-trade system that targets the producers almost exclusively and mostly lays off any direct lifestyle change or contribution to greenhouse reductions by consumers. That’s precisely why the NDP, for example, opposes any carbon tax shift and proposes a policy built on a cap-and-trade system that would make the “big polluters pay,” while ignoring the fact that most emissions come from individuals. The NDP thus marries its anti-big-business attitude with its unwillingness to rile voters through a carbon tax shift, an unedifying mixture of ideology and political calculation that lines up the NDP with the Harperites.

Suncor, like other companies and the Alberta government, is making a huge bet on technology, especially carbon capture and storage. The sums are large in developing the technology, building the pipelines to move the carbon, and installing equipment at the production end.

Alberta and Ottawa are investing in carbon capture research. If the companies don’t meet government intensity reduction targets, they pay into a research fund. All fine, but way too slow.

Later this summer, according to well-informed sources, Alberta will announce a first-quarter surplus of — wait for it — $11-billion to $12-billion. Alberta should spend a portion of it on a crash program to get carbon capture up and running as soon as possible. But, hey, that would require vision.

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