Pipelines – Energy Highways, Spills Waiting to Happen, Defeat for a Low Carbon Economic and Environmental Future?

October 31, 2016 – On the eve of Halloween, celebrated here as in most places in North America by children going door-to-door receiving treats and seldom doing tricks, I have chosen to share with you an issue that is foremost in the minds of Canadians (other than the upcoming U.S. election). Should we be investing further in pipelines and fossil fuel infrastructure knowing the implications for global climate change?

I host a policy group here in Toronto associated with my volunteer work with Canada’s federal Liberal Party. The monthly meetings we hold cover significant issues and this last month’s get together was focused on pipelines. The industry calls them energy highways. Environmentalists refer to them as spills waiting to happen. Climatologists see them as a surefire trip to enhanced global warming in the coming decades and the end to keep mean global temperatures from rising no more than 2 Celsius (3.6 Fahrenheit).

So the question is: Are pipelines incompatible with a low-carbon future?

For Canada, will building new pipelines mean we cannot meet our obligations to curb carbon emissions under international agreement (Paris, COP 21)?

If we don’t build pipelines will the oil industry find other ways to market, for example by rail and truck?

Is a pipeline oil spill worse or better than a railway spill or a marine spill?

The oil sands of Alberta and Northern Saskatchewan are the 3rd largest proven fossil fuel reserve in the world. Only Venezuela and Saudi Arabia’s are larger. Current estimates equal 166 billion barrels. Today industry extracts and ships 2.3 million barrels a day. By 2030 the industry projects volumes of 5 million barrels a day. Some argue that as long as transportation remains dependent on burning fossil fuels the taps have to remain open. And shipping oil by pipeline is seen as far less dangerous than by any other transportation alternative.

The industry in Canada in the last 15 years has poured more than $200 billion into oil sands infrastructure. In 2014 when oil prices were higher the industry employed 133,000 people. It paid $20 billion in taxes, royalties and other fees contributing to 7% of Canadian GDP.

Canadian Oil sands accounted for 8.5% of Canada’s greenhouse gas emissions in 2015, emitting 65 megatons of CO2, CH4 (methane), nitrous oxides, and aerosols (fine carbon particles). Burning fossil fuels produced 70-80% of the emissions in the country.

So if we use less oil and natural gas we can drastically cut our carbon footprint.

Today Canada has 825,000 kilometers (more than a half million miles) of built pipeline. The federal government administers 73,000 of that total.

Under consideration to add to those numbers are several projects including:

• Northern Gateway – from the oil sands through northern BC to a terminal on the coast – for export to Asia and the U.S. west coast.
• Trans Mountain (Kinder Morgan) – from the oil sands to an existing terminal in Burnaby, BC for export to Asia and Pacific markets.
• Energy East – from oil sands to Montreal and New Brunswick refineries (domestic consumption) and for export to U.S. northeast and European markets.
• Keystone XL – from oil sands to Texas refineries for American consumption and export to American overseas markets.
• Line 9 – reversing the flow of oil from Montreal to Sarnia to go the opposite way allowing oil sands product to be refined in Montreal for domestic consumption and export (no net new pipeline construction).

Not to be forgotten in all of this is natural gas. Canada is the 5th largest global producer with 300 years of reserves. Natural gas is described as a transitional fuel that is less greenhouse gas intensive than oil and therefore seen as more palatable by policy makers as an energy source that can continue to be used in a lower carbon-emitting economy.

Is that true?

Yes and No.

The current Alberta government has come up with a plan for a “responsible transition” to a low carbon future, allowing the oil sands to continue to be developed and putting a hard cap on emissions in 2030 to be followed by reductions. You can read about the strategy here. It is a policy promising to do something after it creates even more greenhouse gas emissions. It is not policy too dissimilar from previous Alberta governments which wrapped development around words like “environmentally responsible” and “ecologically sustainable.”

How can these two phrases be compatible while perpetuating an industry seen to be the global cause of climate change?

How can building more pipelines address global warming?

One of the industry-touted ways is to decrease the carbon output from a barrel of oil. Called intensification it looks at all stages of the extraction and production process to find ways to remove carbon. In the past the strategy was focused on the production cycle and not post production. Little net benefit was gained in the production process per barrel of oil. What was far more promising was capturing the carbon at the tail end of the process.

Canada as a result has developed a number of projects that may serve to decrease the net carbon impact of fossil fuel production and combustion. The first of these isn’t even an oil sands project. I have written about it in the past. It is Boundary Dam in Saskatchewan, a coal-fired power plant with added carbon capture and sequestration (CCS) infrastructure. CCS captures carbon in the production process (at Boundary Dam it comes from the smokestack emissions) and liquefies it, then pumps it through pipelines to underground storage where it is safely contained in perpetuity, or is used to enhance oil recovery from older reservoirs.

Quest which I have also written about is the first CCS facility built to capture carbon from oil sands operations. It captures the gas in the post-extraction phase of oil sands production and liquefies it. It then pumps it through pipelines to underground permanent storage in stable rock formations.

Globally oil companies have the necessary expertise and engineering skills to deliver CCS as a solution for carbon reduction. They understand underground stratigraphy with the right properties for safely storing carbon. For example Quest stores CO2 in deep shale formations where the  gas becomes inert and stable within the rock. Other rock suitable for CCS is sandstone which when exposed to liquefied CO2 quickly turns into  limestone. Studies in Iceland show the change occurs in less than three years. The science and engineering for these solutions, therefore, is first class.

Four other technologies must be mentioned.

• CO2 Plume Geothermal shows significant promise having just been named a semi-finalist in the Carbon XPrize competition, a $20 million prize to the winner. You can read more about this in a previous posting at this site. The big benefit here is exploiting liquid CO2 as a medium for generating geothermal energy while safely capturing the gas.
• Oxy-Combustion Carbon Capture has opened a new pilot facility in Ottawa funded by Canada and the United States. I described it in a previous posting.
• CO2 Solutions, an Alberta company with a CCS technology that has the potential to be a game changer.
• Carbon Engineering, also located in Alberta and backed by Bill Gates. It has built a demonstration plant in Squamish, BC that removes CO2 from ambient air.

These are Canadian and American technologies with a world market opportunity to help reduce carbon emissions around the globe. China and India with their heavy reliance on coal for thermal-power generation, would be prime markets. And none of these technologies are limited to standalone facilities. They can be deployed to serve industry clusters. And finally, Carbon Engineering can be implemented as a standalone air filtering facility anywhere.

If we are looking to transition to a low carbon future while still relying on pipelines and fossil fuels then it makes economic and environmental sense to include CCS technology as a requirement to equal and offset every barrel of oil produced and burned. In the policy meetings that I host I recommended a short-term goal (within a decade) to produce net-zero emission results. And in the longer-term (from 2025 onward) to start producing negative-zero emission results. In other words deplete carbon from the atmosphere.

For Canada and North America this is a global industry opportunity that is immediate with positive employment growth. For the fossil fuel industry the technology can be its saviour. For universities and colleges it can be a prime stimulus to new research and innovation.

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