In situ oil sands project in northern Alberta. Photo courtesy MEG Energy

From the Canadian Energy Centre

By Deborah Jaremko

‘The oil sands are Canada’s winning lottery ticket’

As Alberta’s oil sands sector reaches a major economic milestone, a new report shows that emissions growth continues to slow.

There is a clear “structural break” for the industry where production growth is beginning to rise faster than emissions growth, according to S&P Global Commodity Insights. While last year’s oil sands production was nine per cent higher than in 2019, total emissions rose by just three per cent.

“It’s not driven solely by slower production growth because production growth has continued. This is a notable, significant change in oil sands emissions,” said Kevin Birn, head of S&P Global’s Centre for Emissions Excellence.

Birn said that in many cases oil sands growth is coming from optimization, where for example instead of companies building new equipment to generate more steam to inject underground, they have found ways to produce more oil with the steam they already have.

Emissions per barrel, or so-called “emissions intensity” is now 28 per cent lower than it was in 2009.

Earlier this year, S&P Global raised its oil sands production outlook, now projecting the sector will reach 3.8 million barrels per day by 2030, compared to 3.2 million barrels per day in 2023.

Analysts continue to expect total oil sands emissions to peak in the next couple of years, absent the federal government’s proposed oil and gas emissions cap.

“Certainly, there’s potential for that to occur later if there’s more volume than we anticipate, but it’s also the time when we start to see the potential for large-scale decarbonizations to emerge towards the end of this decade,” Birn said.

Meanwhile, before the end of this year the oil sands sector will hit approximately $1 trillion of cumulative spending over the last 25 years, according to a joint report by the Macdonald-Laurier Institute and Pathways Alliance.

That is, not profits or dividends, but investment in operations, building new facilities, and government payments including taxes and royalties.

“The oilsands are Canada’s winning lottery ticket,” wrote MLI’s Heather Exner-Pirot and Pathways’ Bryan Remillard.

They noted that oil sands producers have paid more than $186 billion in royalties and taxes to Canadian governments, representing more than the last five years of Canadian defense spending.

“Far from just an Alberta success story, the oilsands are a quintessentially Canadian sector. More than 2,300 companies outside of Alberta have had direct business with the oilsands, including over 1,300 in Ontario and almost 600 in Quebec,” wrote Exner-Pirot and Remillard.

“That juggernaut could keep Canada’s economy prosperous for many more decades, providing the feedstock for chemicals and carbon-based materials whenever global fuel consumption starts to decline.”

That is, unless companies are forced to cut production, which credible analysis has found will happen with Ottawa’s emissions cap – well over one million barrels per day by 2030, which Exner-Pirot and Remillard said would have to come almost entirely from Canada’s exports to the United States.

“If companies are forced to cut their production, they won’t be able to afford to aggressively cut emissions. Nor will they be able to make other investments to maximize and sustain the value of this resource.”

Alberta’s government is taking swift action that will curb illegal border activities and strengthen the nation’s border security. New measures will immediately crack down on illegal migrants and drug trafficking across the border.

“We cannot take concerns about border security lightly. By establishing this new team of sheriffs at our southern border, we are actively working to address security concerns and stop the criminals whose activities are destroying lives on both sides of the border.”

A new Interdiction Patrol Team (IPT) within the Alberta Sheriffs will crack down on drug smuggling, gun trafficking and other illegal activities occurring along Alberta’s 298-kilometre international boundary. IPT will be supported by:

• 51 uniformed officers equipped with carbine rifles (weapons for tactical operations);
• 10 support staff, including dispatchers and analysts;
• four drug patrol dogs, critical to ensure reasonable suspicion to search vehicles;
• 10 cold weather surveillance drones that can operate in high winds with dedicated pilots; and
• four narcotics analyzers to test for illicit drugs.

This team will patrol to detect and intercept illicit drugs, illegal firearms and unlawful attempts at illegal international border crossing.

Alberta’s government will also create a two kilometre-deep critical border zone, deemed critical infrastructure, to enable the sheriffs to arrest individuals found attempting to cross the border illegally or attempting to traffic illegal drugs or weapons, without needing a warrant. This critical border zone will be created by amending regulations under the Critical Infrastructure Defence Act. This will not apply to people travelling legally along Alberta highways and roads.

“Alberta’s government is ramping up border enforcement. We have long recognized the need for additional capacity to patrol Alberta’s vulnerable international borders, where any amount of illegal activity is too much. I look forward to working with our partners in law enforcement and across government as we send a clear message to prospective offenders that criminal activity, such as fentanyl trafficking, will not be tolerated at our borders or anywhere else in our province.”

“Stemming illegal cross-border activities at the source prevents their spread to the rest of the province later on, and the Alberta Sheriffs are proud to step up and take on this important role.”

“Regardless of what uniform we wear, or what agency we represent, law enforcement from across the province will aggressively target drug dealers, disrupt the fentanyl trade and keep our communities safe.”