The federal government will release a road map next week that lays out how Canada can achieve its 2030 target to reduce greenhouse gas emissions even as newly approved pipelines are expected to spur oil sands development.
Long worried about the lack of export pipeline capacity, Western Canadian crude producers are suddenly seeing the promise of a building boom that would erase such concerns – assuming governments overcome fierce political opposition to the projects.
But the prospect of growing oil sands production is stoking fears among environmentalists that the Liberal government is abandoning its commitment that Canada will reduce GHGs by 30 per cent below 2005 levels by 2030, and to undertake even deeper "decarbonization" by 2050.
In announcing two pipeline approvals Tuesday, Prime Minister Justin Trudeau and Environment Minister Catherine McKenna insisted that the construction of crude pipelines is consistent with Canada's climate change strategy and its claim to international leadership.
Next week, Mr. Trudeau will meet provincial and territorial premiers to hammer out a pan-Canadian climate strategy that includes a national minimum carbon price. And Ottawa will indicate how Canada can achieve its 2030 emissions target, even if oil sands emissions grow by as much as 50 per cent between now and 2030, Ms. McKenna's spokeswoman, Caitlin Workman, confirmed Wednesday.
The Prime Minister has given the green light to Kinder Morgan Inc.'s Trans Mountain expansion and Enbridge Inc.'s Line 3 rebuild – which together will add 1.1 million barrels of capacity out of Alberta. At the same time, U.S. president-elect Donald Trump is signalling he'll approve TransCanada Corp.'s Keystone XL pipeline, which would add another 830,000 barrels a day in capacity.
Given the pipeline approvals, "it will be very difficult to hit those targets," Dale Marshall of Toronto-based group Environmental Defence, said on Wednesday. "I think we're either going to have massive stranded assets because the pipelines will not be filled, or they do get filled and we don't do our fair share" in addressing the international climate crisis."
The federal Liberals are counting on Alberta Premier Rachel Notley's climate change plan to keep a lid on oil industry emissions. The provincial NDP government has adopted a plan that would cap GHGs from the oil sands at 100 megatonnes by 2030, up from around 70 megatonnes today. It also is imposing a price on carbon emissions that would rise to $50 a tonne in 2022, if the Trans Mountain project gets built.
"Alberta's climate plan is a vital contributor to our national strategy," Mr. Trudeau told reporters. "We are able to approve pipeline projects because we have put in significant measures in place including a price on carbon pollution … [and] because we're demonstrating genuine climate leadership."
Meanwhile, Ottawa is working with provinces on a host of other regulations and policies to cut emissions, including carbon pricing, an accelerated phase-out of coal-fired power, a plan to reduce GHG-intensity in transportation fuels and the heating and cooling of buildings.
However, Alberta's rising emissions from the oil sands will require deeper sacrifices elsewhere. To hit the 2030 target, Canada will have to cut its release of GHGs to 524 megatonnes from 732 in 2014. If oil sands producers hit their cap, they would account for nearly one-fifth of Canada's total emissions that year.
The producers insist they can meet that cap while boosting production through the use of innovative technologies that will reduce the per-barrel emissions of production. One promising approach aims to use solvents instead of steam to extract bitumen from underground deposits – a technology that would dramatically cut carbon emissions but has yet to be deployed in a commercial operation.
Meanwhile, emissions intensity in the oil sands is actually rising, as the industry shifts from mining to the more energy-intensive method of steam-assisted extraction from underground deposits. Between 2004 and 2014, per-barrel emissions rose on average by 25 per cent due to growing importance of that in situ production, the Calgary-based Pembina Institute has calculated.
At current emissions intensity, if all projects that have been granted regulatory approval get built, the industry will exceed the 100 MT cap by a significant margin.