Exaggerations in the pipeline

Exaggerations in the pipeline

There are a lot of claims about the benefits that the Kinder Morgan Trans Mountain Extension (TMX) pipeline project will supposedly have for BC, and Canada generally. Recently, I listened to Alberta Premier Rachel Notley on the CBC the other day making her pitch, emphasizing the economic benefits for BC. Some of what she said made me immediately reach out to Google to try verify the claims she made. Along the way, I looked critically at some of the other assertions the pipeline promoters have made. In the interest of fairness, I’ll briefly mention some of the exaggerations of the pipeline opponents.

At the outset, let me say that I’m generally inclined to support Premier Notley. In particular, I’m an admirer of the Alberta Climate Leadership Plan that was put together by an expert panel led by University of Alberta economist Andrew Leach. This was a major step forward by an oil-producing province traditionally governed by conservatives. To be sure, the plan is insufficient to reduce emissions to safe levels, but there are yet no such plans enacted anywhere.

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The looming irrelevance of big oil

The looming irrelevance of big oil

This a long piece that would probably be better split up into several separate, focussed articles. Never mind, consider it as a rambling, idiosyncratic and opinionated mind-dump on the subject of the future of oil. I may later rewrite parts of it more coherently and rigorously for a wider readership. As I make my way through the recently published IEA WEO 2016, I will provide updates.

Pioneers or pariahs?

James Gandolfini, the late actor who played the gangster boss Tony Soprano, was once asked what profession he would never have wanted to have pursued. He answered: “an oilman” (video at 5:00). Those of us who have followed careers in the oil industry might be a little surprised, but not really that shocked, by a response like that.  To many people, oil companies and the people who work in them are often seen as the embodiment of greed and environmental destruction. Oilmen get used to being thought of as pariahs. Continue reading

The quest for CCS

The quest for CCS

This article was originally published online at Corporate Knights and will appear in the hard copy Winter 2016 Edition of the Corporate Knights Magazine, which is to be included  as a supplement to the Globe and Mail and Washington Post later in January 2016. The photograph used in the original was changed for copyright reasons. Also reposted at Skeptical Science.

Human civilization developed over a period of 10,000 years during which global average surface temperatures remained remarkably stable, hovering within one degree Celsius of where they are today.

If we are to keep future temperatures from getting far outside that range, humanity will be forced to reduce fossil fuel emissions to zero by 2050. Halving our emissions is not good enough: we need to get down to zero to stay under the 2 C target that scientists and policy makers have identified as the limit beyond which global warming becomes dangerous.

Photo: rustneversleeps

Shell boasting about its government-funded Quest CCS project, on a Toronto bus.  “Shell Quest captures one-third of our oil sands upgrader emissions”

Many scenarios have been proposed to get us there. Some of these involve rapid deployment of solar and wind power in conjunction with significant reductions in the amount of energy we consume.

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Alberta’s new carbon tax

Alberta’s new carbon tax

Originally posted at Skeptical Science on December 31, 2015

http://alberta.ca/documents/climate/climate-leadership-report-to-minister.pdfOn Sunday November 22nd, 2015, Alberta’s new centre-left Premier, Rachel Notley, announced that the province would be introducing an economy-wide carbon tax priced at $30 per tonne of CO2 equivalent, to be phased in in 2016 and 2017. Observers had been expecting new efforts to mitigate emissions since Notley’s election in May 2015, but the scope and ambition of this policy took many by surprise.

Alberta, of course, is the home of the Athabasca oil sands and is one of the largest per-capita GHG emitters of any jurisdiction in the world. The new plan was nevertheless endorsed by environmental groups, First Nations and by the biggest oil companies, an extraordinary consensus that many would not have thought possible.

How was this done? I will try and explain the new policy as far as I can (the details are not all available yet), but the short answer is that a huge amount of credit is due to the panel of experts led by University of Alberta energy economist Andrew Leach and his fellow panelists. Not only did they listen to what all Albertans had to say, but they were thoughtful in framing a policy that is acceptable to almost everyone.

The background

Alberta is the wealthiest province in Canada, with a population of 4.1 million.  In 2013, greenhouse gas emissions were 267 Mt CO2 equivalent, about 65 tonnes per capita, which compares with the average for the rest of Canada of about 15 tonnes. Among US states only North Dakota and Wyoming are worse. Alberta’s fugitive emissions of methane alone amount to 29 Mt CO2e, about 7 tonnes per person, which is a little more than the average for all GHGs per-capita emissions in the world.

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Shell: internal carbon pricing and the limits of big oil company action on climate

Originally posted at Skeptical Science on March 24th, 2015.

Shell evaluates all of its projects using a shadow carbon tax of $40 per tonne of carbon dioxide. That’s great. But why is the company still exploring in the Arctic and busy exploiting the Alberta oil sands?

Of all of the big fossil-fuel companies, Shell has adopted perhaps the most constructive position on climate change mitigation. Recently, the company’s CEO, Ben van Buerden told an industry conference:

You cannot talk credibly about lowering emissions globally if, for example, you are slow to acknowledge climate change; if you undermine calls for an effective carbon price; and if you always descend into the ‘jobs versus environment’ argument in the public debate.

Shell employs engineer David Hone as their full-time Climate Change Advisor. Hone has written a small ebook Putting the Genie Back: 2°C Will Be Harder Than We Think, priced at just 99¢ and he writes a climate change blog that should be part of every climate-policy geek’s balanced diet.

Shell also has a position they call Vice President CO2, currently occupied by Angus Gillespie. Here’s Gillespie talking recently at Stanford on the company’s internal shadow carbon pricing strategy (hat-tip to John Mashey). It’s worth watching if only for Gillespie’s vivid example of the limitations of looking at averages. The slides can be downloaded here.

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Keystone XL: Oil Markets and Emissions

Originally posted at Skeptical Science on September 1st, 2014

  • Estimates of the incremental emission effects of individual oil sands projects like the Keystone XL (KXL) pipeline are sensitive to assumptions about the response of world markets and alternative transportation options.
  • A recent Nature Climate Change paper by Erickson and Lazarus concludes that KXL may produce incremental emissions of 0-110 million tonnes of CO2per year, but the article has provoked some controversy.
  • Comments by industry leaders and the recent shelving of a new bitumen mining project suggest that the expansion of the oil sands may be more transportation constrained and more exposed to cost increases than is sometimes assumed.
  • Looking at the longer-term commitment effects of new infrastructure on cumulative emissions supports the higher-end incremental estimates.

President Obama (BBC) has made it clear that the impact of the Keystone XL (KXL) pipeline on the climate will be critical in his administration’s decision on whether the pipeline will go ahead or not.  However, different estimates of the extra carbon emissions that the pipeline will cause vary wildly. For example, the consultants commissioned by the US State Department estimated that the incremental emissions would be 1.3 to 27.4 million tonnes of CO2 (MtCO2) annually. In contrast, John Abraham, writing in the Guardian (and again more recently), estimated that the emissions would be as much as 190 MtCO2 annually, about seven times the State Department’s high estimate (calculation details here).

The variation in the estimates arises from the assumptions made. The State Department consultants assumed that the extra oil transported by the pipeline would displace oil produced elsewhere, so that we should only count the difference between the life-cycle emissions from the shut-in light oil and those of the more carbon-intensive bitumen. In addition, they estimated that not building KXL would mean that bitumen would instead be transported by rail, at slightly higher transportation costs. Abraham simply totted up all of the production, refining and consumption emissions of the 830,000 barrels per day (bpd) pipeline capacity and did not consider any effect of the extra product on world oil markets.

Neither set of assumptions is likely to be correct. Increasing the supply of any product will have an effect on a market, lowering prices and stimulating demand (consumption) growth. Lower prices will reduce supply somewhere.  The question is: by how much?

An interesting new paper in Nature Climate Change (paywalled, but there is an open copy of an earlier version available here) by Peter Erickson and Michael Lazaruares ,attempts to answer this question. The authors are based in the Seattle office of the Stockholm Environment Institute (SEI).
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The Editor-in-Chief of Science Magazine is wrong to endorse Keystone XL

Originally published at Skeptical Science on March 3rd, 2014

An editorial by the Editor-in-Chief of Science Magazine, Marcia McNutt, conditionally endorses the Keystone XL (KXL) pipeline. Her argument is that:

  • the absence of the pipeline has not stopped oil sands development and the building of the pipeline will not accelerate oil sands development;
  • President Obama can extract concessions from the Canadians to reduce emissions and upgrade the bitumen in Canada.

Both of these arguments are wrong; let me explain why.

Pipelines promote production

The Mildred Lake oil-sands plant in Alberta. Note the tailings pond behind the huge yellow piles of sulphur, a by-product of bitumen upgrading. The sulphur may come in handy later for use in solar radiation management. Photo Wikipedia

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