The editorial by Vincent Brousseau-Pouliot is right: Ottawa must put its pants on the oil companies and impose a cap on emissions from the oil industry, something that the Trudeau government has pledged to do. However, with the current accounting method, nothing indicates that carbon pricing aimed at oil production activities will lead to a reduction in greenhouse gas (GHG) emissions caused by this industry.
Posted at 10:00 a.m.
In fact, Canada’s Emissions Reduction Plan, presented in the spring, confirms the opposite; an additional 1,400,000 barrels of oil per day are expected to be produced between 2020 and 2030, an increase of 34%. This is the equivalent of seven times the Bay du Nord oil project.
Ironically, Canada claims that it will reduce GHG emissions from this industry by 42% over the same period.
How is it possible ? Does the government have a miracle solution to make pollution disappear?
Not really. He performs more intellectual gymnastics in order to achieve a result that he likes.
Exclude the majority of GHGs from the life cycle of a barrel
Indeed, only production is calculated in the GHG emissions on Canadian soil, and it represents only 15% of the emissions caused by a barrel of oil. Scope 3 emissions (from the supply chain and consumed abroad) represent 85% of the GHG emissions of this industry, and will probably be omitted from the Plan.
It is frequently mentioned that 26% of GHGs emitted on Canadian soil come from oil production.
However, taking only this statistic into account minimizes the real impact of this industry: the omitted emissions – those of scope 3 – represent 1.3 times the total of Canadian GHGs. It is enormous !
That’s five times the emissions from transportation in Canada.
Financing carbon capture
By excluding Scope 3 GHGs and financing carbon capture, it is particularly easy to dangle incredible reductions when there is, in truth, an increase in GHGs emitted.
To understand the hypocrisy of Canada’s plan, let’s do the math together using its data.
Application case
Normalize the total pollution from oil in 2020 to 1000.
The pollution resulting from production, and therefore that emitted on Canadian soil, is 150, which represents 15% of total pollution. From there, we plan to reduce this 150 by 42%, which brings us to a reduction of 63 pollution units, which is excellent news!
But, you see, there is a “but”. Canada’s plan provides for a 34% increase in production, and since oil consumed pollutes, an increase of the same magnitude is applied, which brings us to a total pollution of 1277, a net increase of 28 %.
In short, the government must reduce its GHG emissions by 42%, but in truth, it plans to increase the emissions caused by our activities by about twenty percentage points.
Cap on emissions
The biggest flaw in Canada’s plan is to omit scope 3 GHG emissions, the majority of emissions for which Canadians are responsible. Regardless of the form of the next cap on emissions, if GHG emissions are not included, we will have an increase in pollution caused by our activities. This means more Bay du Nord type projects.
However, it is possible to include all of the GHG emissions caused by the oil industry; all you have to do is create a carbon market, like in Quebec, that includes all the emissions caused by this industry.
The advantage of this mechanism is that it will ensure that the Canadian oil industry contributes less and less to the climate crisis, and not more, as the current plan provides.
With a cap on all emissions, if more oil is produced, it would not lead to more pollution. In fact, to have one more barrel, pollution would have to be reduced by at least an equivalent amount by cleaning up production technologies, or even by capturing carbon.
In other words, the oil industry would finance the research and development of the energy transition, because it would benefit from these lower carbon technologies.
In the words of the Secretary General of the United Nations, Mr. António Guterres: “The real dangerous radicals are the countries that increase the production of fossil fuels”…like Canada.
Only the inclusion of scope 3 GHG emissions in the next oil industry reduction plan can really clean up this industry.