Part 8 in a series of 18 discussion papers
Canada’s declared climate plan is to “cap” the emissions released into the atmosphere from the oil production process in Canada but at the same time continue increasing our oil production and oil exports for another 20 years.
On November 1, 2021, on the stage at the COP26 meeting in Glasgow speaking to an assembly of world leaders, Prime Minister Trudeau declared that Canada has “formally committed” to cap emissions from our country’s oil and gas sector. What Trudeau did not tell the assembled leaders is that Canada, the world’s fourth largest oil producer, intends to continue expanding its oil production. The promised “cap” relates only to the volume of emissions released into the atmosphere from oil extraction and processing activities within Canada.
The Federal Government has confirmed that none of the government’s proposed new policies, including plans to subsidize large-scale deployment of Carbon Capture, Utilization, and Storage (CCUS) technology in the oil sands industry, are intended to bring about any decline in the currently projected growth of Canada’s oil production. Indeed, the text of the government’s most recent Emissions Reduction Plan (ERP) affirms that the aim of government policy will be to continue to maximize production:
The government will work closely with the provinces and the sector to manage competitiveness challenges, remain attuned to evolving energy security and climate risk considerations, maximize opportunities for ongoing investment in the sector, and minimize the risk of carbon leakage. The intent of the cap is not to bring reductions in production that are not driven by declines in global demand. Mechanisms like the CCUS investment tax credit will help support decarbonization.
— 2030 Emissions Reduction Plan, March 29, 2022, p.53 (emphasis added)
The government’s plan is clear: Canada’s oil production will continue to increase until – and if – other countries eventually begin to consume less oil. In the meantime, Canada’s production levels will be guided solely by “global demand”.
But no amount of further technological improvements in the oil sands industry aimed to “cap” and reduce emissions during extraction activities, not even large-scale adoption of CCUS at oil sands production sites, will significantly lower the total amount of emissions that will be released into the atmosphere from oil sourced from Canada’s oil sands. Our predicament is that over 85% of the life-cycle emissions of every barrel of oil we produce occur after the extraction process is completed, after we export our oil, when it is burned as fuel in cars and trucks (“downstream emissions”) and released into the atmosphere as tailpipe emissions.
The significance of “downstream emissions” from Canada’s oil production
The total amount of emissions released during the oil production process within Canada’s borders in 2019 was 118 Mt (83 Mt in the oil sands industry and 35 Mt in conventional oil production, not including additional emissions from petroleum refining in Canada). Those are just the “upstream emissions”. By far the largest share of the emissions released by oil produced in Canada occurs when it is consumed as fuel in foreign markets. Those emissions, which occur after the oil extraction production process is completed and after we export our oil, are referred to as “downstream emissions” (or “Scope 3 emissions”).
Carbon intensity is the metric used to measure the amount of GHGs emitted through a portion of the oil supply chain. It is used, for example, to measure the emissions that occur during the extraction process alone. It is also used to calculate a total life-cycle emissions analysis of the fuel, including extraction emissions, refining, shipping (pipelines, rail, and marine), and the emissions from the fuel’s combustion in vehicle engines (the full life cycle is also called a “well-to-wheels” analysis). It is measured in kilograms of carbon dioxide per barrel of crude oil (kg CO2).
Oil sands emissions intensity during the oil sands extraction process in Canada has declined since 1990, down from 116 kg CO2 per barrel in 1990 to 80 kg CO2per barrel in 2019 (those are averages for all oil sands producers): see National Inventory Report, April 15, 2021, pp. 55-56).
Extraction emissions, however, are less than 15% of the total well-to-wheels emissions released by each barrel of oil from Canada’s oil sands and ultimately burned as fuel. Comprehensive studies have examined the emissions intensity of oil from many different world oil producers. See, for example, The oilsands in a carbon-constrained Canada, Pembina Institute, Benjamin Israel et al., February 2020. The Pembina report shows that “well-to-wheels” emissions for all types of oil range from a low of about 450 kg CO2 per barrel up to a high end of about 650 kg CO2 per barrel. Canadian oil sands production is at the higher end of that range, about 550 kg CO2 per barrel and above that. Given that oil sands extraction emissions average 80 kg CO2 per barrel, they account for less than 15% of the total life-cycle emissions released by each barrel of oil Canada produces.
The same point was demonstrated seven years ago, when the U.S. government completed its Final Supplemental Environmental Impact Statement (SEIS) relating to the proposed Keystone XL pipeline, designed to carry 830,000 bpd of oil sands crude to the U.S. market. Chapter 4 of the U.S. study in 2012 examined the carbon intensity of Canada’s oil sands production compared to four global sources, including a “U.S. Average” (the emissions per barrel data is found in Table 4.14-3 at page 4.14-29 of that report). In the U.S. study, extraction emissions intensity for Canada’s oil sands was found to be 74 -105 kg CO2 per barrel and overall well-to-wheels emissions were 533 – 568 CO2 per barrel.
While oil sands extraction emissions are now in the lower range of 67 – 80 kg CO2 per barrel, the downstream emissions per barrel (which mainly are released during combustion of the fuel in vehicle engines) remain at around 470 kg CO2 per barrel. The basic point is that the emissions from the production process (the upstream emissions) in Alberta are only about 15% or less of the total emissions from each barrel of oil we produce.
Over 85% of the total life-cycle emissions released by the oil we produce occurs after the extraction process is completed. Canada’s national emissions accounting (i.e., the emissions data reported annually by the government to Canadians) does not include that 85%.
Promised future technological innovation and improved efficiency in Canada’s oil sands industry at production sites may well further reduce emissions per barrel at the extraction stage in Alberta. But those measures will not reduce the downstream emissions that will be released into the atmosphere by every barrel we export.
No amount of further technological improvements in the oil sands industry (not even large-scale adoption of CCUS at oil sands production sites) will significantly lower the total life-cycle emissions from oil sourced from Canada’s oil sands. The largest share of the total emissions from every barrel we produce occurs after we export our oil, when it is combusted as fuel in vehicle engines in the U.S and in other foreign markets, and release into the atmosphere as tailpipe emissions. Those downstream emission will continue to rise in step with our production.
The government does not publicly disclose official data about the amount of the downstream emissions released every year by our exported oil. But energy economists can readily calculate that number based on available data about the extraction emissions (within Canada) and the total life-cycle emissions (which include the emissions from shipping, refining, and combustion of the exported fuel in vehicles). In the case of oil from the oil sands, the downstream emissions are about 6-times greater than the production process emissions.
In addition, very recently in response to a petition by the environmental law organisation Ecojustice Canada, Environment Canada disclosed data showing the annual level of emissions from the combustion of our exported oil over the period 2016–2019:
The source for the data in Figure 8A was published by Ecojustice Canada on June 30, 2021 (see: To avoid climate catastrophe, Canada must account for its hidden emissions, Fraser Thompson, https://ecojustice.ca/to-avoid-climate-catastrophe-canada-must-account-for-its-hidden-emissions/). This article was reprinted by the National Observer on July 27, 2021 (https://www.nationalobserver.com/2021/07/27/opinion/canada-hidden-fossil-fuel-emissions-avoid-climate-catastrophe).
This data reveals that, driven by Canada’s increasing oil production between 2016 and 2019, the annual level of our downstream emissions increased 129.9 Mt CO2eq during those three years.
The annual level of the downstream emissions from our exported oil are almost equivalent to the combined volume of emissions released by all emitting activities of every kind within Canada’s borders, i.e., all our domestic transportation (including all heavy trucks and passenger vehicles, trains, marine, and aviation), all heavy industry, heating buildings, agriculture, and land use and forests, as well as the emissions released by all oil and gas production activities. In 2019, Canada’s total domestic emissions reached 738 Mt. The “downstream emissions” from our oil amount to ‘another Canada’, a kind of transnational emitting twin for which we take no responsibility.
If Canada’s oil production expands by another 26% by 2030 above the 2019 level, as currently projected in the government’s 2030 Emissions Reduction Plan (ERP) published on March 29, 2022, the annual volume of Canada’s “exported emissions” from our oil production will rise proportionately, from 706 Mt in 2019 to approximately 850 Mt by 2030. That is about a 150 Mt increase by the end of this decade above the 2019 level. That increase in the downstream emissions will more than offset the relatively modest reduction in “upstream emissions” that might be achieved by the government’s promised “cap” on emissions during the oil production process in Canada.
