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As withering criticism of the oil sands continues unabated, the industry is fighting back, armed with its own set of facts and highlighting the strides made in tackling the environmental issues that have sullied its reputation.
Criticism of Canada’s oil sands is not a new phenomenon, but the industry is at a key stage of its development with about one million barrels per day of production under construction, according to IHS CERA data. Companies are mulling new projects in the hopes of near-doubling oil sands production within a decade, while decisions on major pipeline projects are in the offing.
Meanwhile, the European Union is determined to “reduce its emissions through policies to stop the development of highly greenhouse-gas-intensive unconventional fossil fuels such as tar sands,” according to an official press document. An EU decision against the oil sands could be a stigma that’s tough to shake off.
The criticism has come from all quarters. Neil Maxwell, interim commissioner of Canada’s Environment and Sustainable Development (CESD), said in a report published Nov. 5: “Despite efforts over decades and progress in some areas, the government has not met key legislative responsibilities, deadlines, and commitments to protect nature and advance sustainable development.”
Nearly two-thirds of Canadians surveyed by Ipsos Reid Public Affairs recently, believe the oil sands industry could do a better job of protecting the environment.
Simon Dyer, policy director at The Pembina Institute, says that the industry and government have not been able to demonstrate how they can “square the circle” of meeting their Copenhagen commitments and expanding oil sands production.
Pembina published a report on Wednesday, arguing that an emphasis on the Canadian oil sands was a carbon and revenue “gamble” that could hurt the country’s long-term competitiveness.
The industry has shrugged off the criticism and remains committed to raise Canadian oil sands production to 5.2 million bpd by 2030 from its current level of 1.8 million bpd. Recently, Suncor Energy Inc. and its joint venture partners Total E&P Canada Ltd. and Teck Resources Ltd. announced plans to build Fort Hills, a $13.5-billion bitumen mining project with a capacity of 180,000 barrels per day starting from 2017. Royal Dutch Shell Plc. also said it will proceed with an 80,000-bpd Carmon Creek oil sands project.
And in a rare bit of good news for pipelines, British Columbia and Alberta governments agreed to work together to facilitate the construction of the $6.5-billion Northern Gateway pipeline being proposed by Enbridge Inc.
But behind the industry’s poker face is the nervous realization that it needs to secure a social licence to proceed with its plans. At the heart of the industry’s argument is that it has taken huge steps in curbing its carbon footprint and that it’s being unfairly targeted whereas other oil-exporters have not attracted the same level of scrutiny.
Reynold Tetzlaff, energy leader at management consultant PWC, says Canadian oil companies are deploying innovative technology to cut production costs, which in turn is helping reduce emissions.
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