The Alberta tar sands has been on a collision course with the climate since industry and government made it clear they would bend over backwards to make this high cost, high carbon, high risk oil the centerpiece of a misguided strategy to become an ‘energy superpower’. For over two decades, the governments of Alberta and Canada have done everything possible to pave the way for rapid growth of the sector, leaving the industry to plan for rapid growth without giving a second thought to greenhouse gas emissions, environmental regulations, or even the rights of the First Nations on whose territory the tar sands are mined.
But it was never going to be that easy to get away with such reckless expansion. Too many conditions need to be perfectly aligned for such rapid development. Ranging from easy and affordable market access (now stymied by extraordinary public, political, and legal opposition to pipelines and crude-by-rail), to unquestioned political support (Alberta recently tossed its industry-friendly government in an historic election), to high oil prices – the perfect storm of conditions is passing.
Today we release brand new analysis that shows just how bad things are looking for tar sands expansion.
Our key findings include:
- Currently, 39 tar sands projects are delayed or ‘on-hold’.
- For every 1,000 barrels per day (bpd) of tar sands production capacity approved or under construction, there are over 500 bpd that are delayed or ‘on-hold’.
- Delayed or on-hold projects represent over 1.61 million bpd of proposed tar sands production capacity.
- Delayed or on-hold projects contain nearly 13 billion barrels of total resources, which would amount to 7.8 billion metric tons of CO2 if extracted and burned. The emissions are equivalent to 40 years of emissions from 51 average U.S. coal-fired power plants.
- An additional 550,000 bpd of production capacity (40,000 bpd currently operating) is owned by companies that have filed for bankruptcy.
A recent report in the Financial Times showed that falling oil prices have hit investment in high cost oil projects across the world but that the Canadian tar sands sector has been worst hit. However, the FT only counted the project phases that have been explicitly cited as delayed by company executives. We used detailed industry data to calculate the subsequent phases of those projects that will clearly not go ahead before the announced delays. We also include projects that were put on hold prior to the oil price crash.
That these projects are under threat is good news for the climate and yet another wake-up call for an industry that is struggling to come to terms with the reality that it can’t and won’t define energy in the 21st century. Unfortunately, they are unlikely to give up without a fight, which is why the growing movement for a safe, just climate future is more important than ever.
Industry will undoubtedly continue to insist that we cannot live without its product – as any industry would when faced with an existential crisis. But this type of fossil fuel fatalism is wrong: energy is so much more than oil, coal and gas. The sooner we can all see past these desperate (very pervasive) efforts to stay relevant, the better. Cleaner, safer, just energy is taking hold and exceeding expectations all around us, so let’s start looking in the right direction when it comes to defining our energy future.