Canada’s oilsands emitted about two per cent less carbon dioxide per barrel of oil produced in 2018, a sign of progress toward addressing environmental concerns, according to a new study.
So-called emissions intensity in the oil sands has declined 20 per cent since 2009 to the equivalent of about 70 kilograms CO2 per barrel pumped, based on 2018 data, IHS Markit Ltd. vice-president Kevin Birn wrote in a study released Wednesday. By 2030, that margin probably will widen to 30 per cent, the report said.
The decline was driven by the opening of a new mine that had below-normal emissions intensity, as well as reductions at four out of five existing mining operations, Birn said. The study looked at 2018 data because that was the most recent available.
The oil-sands industry has long been a top target of environmentalists, who warn that the massive, carbon-intensive operations help fuel global warming. Opponents have successfully delayed and blocked pipelines to stall the sector’s growth. In recent years, the industry also has been shunned by investors concerned about environmental, social and governance metrics.
Last week, Deutsche Bank AG said it wouldn’t finance any new oilsands projects as part of its sustainability strategy.
Still, even as the oilsands industry is producing less CO2 per barrel, rising crude output means that total emissions – the most important figure with regards to climate change – continue to rise. Absolute emissions increased about 3.9 per cent to 80 megatons in 2018, according to figures previously released by Environment & Climate Change Canada.
While Alberta has a 100-megaton limit on oilsands emissions, that cap applies to a narrower slice of the sector’s output. Only about 66 megatons of the industry’s current emissions are subject to the cap, IHS Markit estimates, meaning the oil sands have ample room to boost them.
IHS also cautioned that the weighted average emissions intensity of 70 kilograms per barrel “may do a poor job of representing any one operation” because the variability among oil-sands projects is wide. The most carbon-intensive operation produced about 201 kilograms of CO2 per barrel, about five times the 40 kilograms per barrel of the most efficient operation, Birn said.
© 2020 Bloomberg L.P.