Canadian Oil Sands GHG Intensities Down 20% Since 2009: ANALYSIS

Canadian oil sands emissions intensities dropped 20% between 2009-2020

Canada's oil sands sector has once again shown its global leadership in environmental performance and why it should be a supplier of choice for the world's future energy needs.

According to IHS Markit, Canada's oil sands' greenhouse gas (GHG) intensities dropped 20 per cent between 2009 and 2020. Furthermore, preliminary research by the U.K.-based research firm found that "…ongoing GHG intensity reductions are poised to overtake a slowing oil sands growth profile and absolute emission could begin to decline within the next half decade."

IHS Markit's analysis confirms the long-term trend of declining GHG intensities in Canada's oil sands. Since 2009, the sector has seen its average GHG intensity drop by more than 1.5 kilograms (kg) of carbon dioxide (CO2) equivalent per barrel (bbl) produced annually. Cumulatively, this represents a drop of around 17 kgCO2e/bbl or 20 per cent between 2009 and 2020.

Canada's world-class transparency, reporting and regulatory requirements make GHG intensity evaluations of the oil sands possible for firms like IHS Markit. In many other major oil-producing nations, the inputs required to analyze emissions intensities just aren't available.

IHS Markit also found in a 2020 analysis that the oil sands could see an additional 16 to 23 per cent improvement in GHG emissions intensities by 2030, to a level 30 per cent below 2009. Also see:

What is GHG Intensity?

S&P Global Platts Oil Demand to Plateau Late 2030s Early 2040s at 115 million barrels per day

GHG intensity is the ratio of absolute (or total) emissions versus production volume. In the case of the oil sands, emissions intensities are measured by total GHGs divided by the number of barrels produced. Therefore, GHG intensity can fluctuate considerably depending on total emissions and the amount of oil being produced.

Despite significant disruptions in global energy markets over the past few years, Canada's oil sands managed to reduce its emissions intensities once again in 2020.

Why Do GHG Intensities Matter?

Climate change is one of the most significant challenges of our time. Current scientific consensus indicates that future global warming needs to be limited through transitioning towards greener energy and cleaner technologies that will help reduce GHG emissions. Additionally, global investors are now looking to invest in responsible companies with world-class performance on Environmental, Social and Governance (ESG) metrics.

Many large industrial sectors – like the oil sands – are now intently focussed on improving environmental performance and mitigation methods. By doing so, these industries will solidify their place in our world that prefers sourcing raw materials and products from sustainable supply chains more than ever before.

Oilsands Net Zero Alliance

Over 95% of oil sands production committed to net zero by 2050

Apart from GHG intensities, the oil sands sector is now looking at ways to reduce its total emissions and continue to carve out its place as a global energy supplier of choice.

The Oil Sands Pathway to Net Zero, announced last year, is an initiative backed by a consortium of major oil sands producers that represent over 95 per cent of the sector's output.

How exactly do these companies plan to reach net zero emissions by 2050?

#1 – Collaboration – between industry and government to support programs for emission-reducing infrastructure and projects, like the Alberta Carbon Trunk Line (ACTL).

#2 – Investment – significant investment by both industry and government will help support the research and development of new cleantech and innovations.

#3 – Carbon Capture & Storage – by utilizing pipeline systems like the ACTL mentioned above, the oil sands sector expects to significantly reduce emissions through carbon capture, utilization and storage (CCUS) methods.

#4 – Continued Reductions – the deployment of existing and emerging GHG emission reduction technologies at oil sands operations along the expanded CCUS pipeline system including, but not limited to more CCUS capacity, energy efficiency and process improvements, electrification and fuel switching.

#5 – Accelerating Development – emerging emission reduction technologies such as small modular nuclear reactors (SMNRs) and direct air capture have the opportunity to significantly decrease oil sands GHG intensities further.

Oil Sands Emissions Facts

oil sands emissions intensities up to 35% lower than previously reported

Canada's oil sands sector has long been a global leader in the continued improvement of its environmental performance.

Here are several facts showing that leadership and why Canada should be a go-to supplier of choice in a world expected to see continued oil and gas demand growth for decades.

#1. Since 1995, Canada's oil sands emissions intensities decreased by 44 per cent. (BMO)

#2. Since 2013, reported GHG intensities among oil sands operators dropped 23 per cent versus just 13 per cent for global majors. (BMO)

#3. Between 2000 and 2018, the GHG emission intensity average of Canada's oil sands operations dropped by 36 per cent due to efficiency and technological improvements, less venting emissions and reductions in the percentage of bitumen upgraded to synthetic crudes. (NRC)

#4. If the rest of the world followed minimal Canadian flaring standards, total GHG emissions from every barrel produced would drop by 23 per cent – equal to removing 100 million cars off the road globally. (University of Calgary, Stanford University – Journal Science)

#5. Oil sands now emit just 4 to 5 per cent more than the global average crude over the life cycle from production to end-use, with several newer projects reflecting below-average footprints. (BMO)

#6. Average oil sands GHG intensity could improve 20 to 30 per cent with the application of planned innovations. (BMO)

#7. In 2007, Alberta was the first jurisdiction in North America and one of the first globally to take climate action with mandatory GHG emission reduction targets for major emitters. (BMO)

#8. Alberta, accounting for around 80 per cent of Canada's oil production, is one of the few oil-producing jurisdictions globally with regulated emissions protocols, mandatory disclosures and carbon taxes on excess GHGs. (BMO)

#9. The Canadian Oil Sands Innovation Alliance (COSIA) is a unique alliance rarely seen between competing companies across the globe, where oil sands producers come together to focus on improving environmental performance through collaboration and innovation. (BMO)

#10. Canada is the third-largest operator of CCUS globally and one of few countries with enough storage to achieve net zero using CCUS methods by 2050, with roughly ~400 gigatons (GT) reflecting >65x industrial output to 2050. (BMO)

#11. Over 90 per cent of future oil sands emissions are 'capturable' using carbon capture utilization and storage (CCUS) "...given the highly concentrated nature of stationary point sources, abundant high-quality storage options in Alberta, as well as advanced carbon infrastructure, carbon management expertise and regulatory systems in place."

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Canada's oil sands sector has time and time again proved itself as one of the most responsible energy sources on the planet. We should be proud of our record, our people and our resources!

The bottom line is that more Canadian oil and gas on global markets is good for our families and governments at home AND the global environment. It's a win-win situation, one that all Canadians can get behind!

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