(Oil’s new supply boom is a bust for the climate: part 2)

Last week we published a chart and analysis that showed how the oil industry is striving to build production capacity that would substantially overshoot the limits of our climate system.

By 2020, the industry could have over 110 million barrels per day (bpd) of production capacity in place. This is over 22 million bpd more than International Energy Agency (IEA) models say we should be using in that year if we are to reduce the risk of warming the planet more than an average 2 degrees C.

Hurricane Sandy this week sadly demonstrated the risks we face. The storms, droughts and wildfires the United States has endured this year in a world with average warming at around 0.8 degrees leaves us wondering what 2 degrees will bring. That we may surpass that level hardly bears thinking about.

We have long argued that the oil industry’s boom is a bust for the climate. The Canadian tar sands is a source of oil that is at the forefront of the current boom. It is also at the forefront of the oil industry’s climate overshoot, with enough projects lined up to surpass the IEA’s 2 degree model nearly three times over.

While current production capacity is at 2.28 million bpd, the tar sands industry has over 7.1 million bpd of projects proposed and under construction. While depletion at existing projects will reduce the overall figure, this could potentially raise production to around 9 million bpd. The IEA’s 2 degree model suggests tar sands production be limited to 3.3 million bpd.

Click on image to see bigger chart

tar sands climate limits

In 2010, the IEA’s annual flagship publication, the World Energy Outlook (WEO), featured a special chapter on unconventional oil. The Canadian tar sands industry was a major part of that chapter, being at that time the leading unconventional oil source.

The IEA used its scenario modelling to show where Canadian tar sands production could be in 2035 under three scenarios.

The “Current Policies Scenario” reflects a freezing of current policies over the period. So no new vehicle efficiency standards, no carbon regulation, all current energy and climate policies globally are unchanged. In this scenario greenhouse gas emissions are so high that the average global temperature is raised by 6 degrees C by the end of the century. The IEA has described this scenario as leading to, “massive climatic change and irreparable damage to the planet”. In this scenario the IEA has tar sands production at 4.6 million bpd.

In the “New Policies Scenario”, the IEA applies relatively weak implementation of the commitments discussed at the Copenhagen climate conference in 2009. It estimates that this would miss the 2 degree target by at least 1.5 degrees, leaving us with a 3.5-4 degree C warmer planet. In this scenario the IEA has tar sands production at 4.2 million bpd.

Finally, in the IEA’s “450 Scenario”, the agency models energy supply and demand that would help keep atmospheric carbon at 450 parts per million. This is considered to have a 50% chance of keeping the climate below the 2 degree threshold. In this scenario tar sands production tops out at 3.3 million bpd.

Tar sands producers know no climate limits

The tar sands industry, and the Albertan government that regulates it, have probably not read the 2010 WEO, or if they have, they have chosen to ignore its implications.

While production capacity stands at 2.28 million bpd today, over 750,000 bpd is currently under construction, all of which should be operational by 2015. At 3.04 million bpd, that already brings us very close to the IEA’s “450 Scenario”, which may very well be a conservative scenario if we are to limit the worst impacts of climate change.

The Alberta government has already approved a further 2.22 million bpd of tar sands production that is not yet under construction. If those projects are built production capacity would be over 5.25 million bpd. This is not only massively over the 2 degree scenario but is also significantly over where the IEA predicts production would be under the Current Policies Scenario.

Not happy to rest there though, the industry also has another 4.15 million bpd of projects that are either currently undergoing regulatory review or have been announced but not yet submitted for approval. That would add up to over 9.38 million bpd should it all be built.

Of course, some existing projects will have wound down by the time all this capacity can be built, so tar sands production may never actually reach 9 million bpd. But the tar sands, particularly tar sands mines, are considered a high recovery resource. Unlike most conventional oil production, a large proportion of what is in the ground can be recovered, so many tar sands projects actually have long lifespans. So a realistic figure for production capacity, should all these projects go ahead, is likely still very high, and certainly beyond any safe climate scenarios.

Regardless of any depletion or wind down of some existing projects, it is painfully clear that the industry has no intention of keeping production below 3.3 million bpd.

The tar sands are an extreme source of oil with very high local and global impacts. For First Nation and other communities living downstream suffering from polluted air and water and destruction of habitat that supports traditional livelihood, 3.3 million bpd may be much more that they can tolerate. But with such an abundant resource to be exploited and billions of dollars at stake, industry executives and government representatives are apparently choosing to ignore these startling realities.

Shell’s Jackpine Mine: a case in point

In one example, Shell’s Jackpine Mine expansion project, the local capacity to absorb the project’s pollution is clearly at stake. The expansion would raise production at this already massive mine a further 100,000 bpd.

When accounting for projects in the region that either already exist or have already been approved, this project will lead to government-mandated limits on habitat destruction, air quality and acid deposition in 21 lakes being exceeded.

The cumulative impacts of tar sands production urgently need to be acknowledged, both on a local and global level, by the decision makers that are allowing production to continue. The tar sands do not operate in a bubble; its products have the potential to reach all over the world and the global warming emissions associated with it accumulate together with all the emissions from other activities.

And the tar sands industry needs to get real about its impact. It cannot continue to use the Boreal Forest, rivers and lakes as its dumping ground and it cannot pursue its full development without playing a significant role in sending the world’s climate beyond the point of no return.

The Albertan government has already approved far more production capacity than the climate can withstand. It needs to reverse those approvals and stop further applications. It can start with Shell’s Jackpine mine expansion.


Thanks to Jennifer Grant at The Pembina Institute and Keith Stewart at Greenpeace Canada for compiling the industry planning figures.

One Comment

  • Here is a transportation fuel solution that is tied to each person here, it’s tied to your wastewater that ends up at your sewage treatment plant, the reason it must be treated is that it causes algae blooms if released, so if we instead of chemicals use algae to purify the water they are much better at cleaning the water so allow full recycling at a reasonable price.

    Ponds don’t work for this, you have to grow 24×7 to keep up with volume, Phoenix, AZ, produces 10M-gallons/day that is 41.5M-pounds of algae food to extract by tomorrow and worth about $8.3M/day if you had to buy it at $400/ton, this produces about 3M-gallons/day of biodiesel or 7.5L/2gal per day per person, nearby SuperBowl Glendale produces the same amount.

    The USA burns up 474M-gallons/day of all types of transportation fuels with 300M-people that’s 6L/1.58gal per day per person.

    This gives a local supply of transportation fuels from a renewable resource we create daily and recycles the water, the fuel consuming CO2 and emitting O2 to make it so near carbon-neutral when burned, this is what can significantly reduce CO2 emissions globally.

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