Alberta Oil: How bad data leads to bad policy

Alberta Oil
By Alberta Oil staff

Understanding the energy sector often requires navigating competing, chaotic and often confusing data sets. Figuring out the greenhouse gas emissions (GHG) from oil sands is one example. Wide-ranging estimates, differences in data quality, availability and collection all make getting the numbers right difficult. As a result, using these numbers for policy is challenging.

Illustration Kaley McKeanYet GHG policy directed at crude oil is advancing in some places. California has its Low Carbon Fuel Standard, and work continues on a European Fuel Quality Directive. In both cases, Canada, Alberta and industry participants strongly oppose the high-carbon label uniquely applied to oil sands.

At a glance, the opposition is curious. Oil sands exports to these markets are currently small to nil. Why does Canada care so much? One reason is that numbers etched in policy, even if highly uncertain, are often perceived as more credible than others.

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Comments

  1. Ruzel says:

    Question 2: two measures are neeedd i) A more aggressive GHG reduction target, coupled with access to out-of-province offsets to keep the costs down; ii) Get a CCS facility built rather than just talking about it. Question 3: Measures listed above will help with access to foreign markets particularly America’s. The offsets are useful insofar as they can cost-effectively bring down the lifecycle emissions of oil sands exports to equivalent levels other US imports. This way, the GHG intensive nature of Oil Sands production, relative to substitutes, is no longer a point critics can dwell upon this helps with things like XL approval and compliance with state-level LCFS regs. Additional measures are neeedd like renewable energy subsidies. Alberta has great wind resources and the best solar resources in Canada. A few cents on rate-payer bills can finance the deployment. Critics will have a very hard time pointing fingers at Albertan oil sands if they see solar panels and wind turbines dotting the landscape. Additionally, given Alberta’s clout in Ottawa, they are also well positioned to influence the Federal Gov’t (and therefore the rest of Canada) to bankroll part of the cost. In America, the Feds pay 30% of the capex of renewable energy projects plus generous accelerated depreciation treatment, but the states who add the state level subsidy to get the projects over the investment hurdle garner most of the positive publicity.

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