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Abstract
Canada, with 0.5% of the world’s population, produces 2% of global greenhouse
gas (GHG) emissions. Oil sands account for 5% of Canada’s GHG emissions and
0.1% (1/1000th) of global GHG emissions (CAPP, 2011). In the absence of federal
initiatives to regulate GHG emissions, the Government of Alberta implemented
the Specified Gas Emitters Regulation (SGER) in 2007, becoming the first
jurisdiction in North America to mandate GHG emissions reductions. This paper
discusses the scope and implementation of the SGER, within the context of a
Canadian Oil Sands company preparing for regulatory compliance, and draws
lessons for business and regulators on the challenges, risks and opportunities
presented by GHG regulation.
The SGER imposes GHG emissions intensity (emissions per unit of production)
reduction targets on facilities emitting more than 100,000 tonnes of carbon
dioxide equivalent (tonnes CO2e) per year. For Connacher, this applies to two
in situ oil sands facilities (Pod One and Algar). The baseline for reductions
is 2011 for Pod One and 2013 for Algar. In the year following the baseline
year, each facility will be required to reduce the GHG emissions intensity by
2%. The reduction will then increase at 2% per year to a maximum of 12%.
Since 2008, Connacher has been calculating its future GHG reporting
requirements and assessing the environmental and financial impact of the
SGER.
Federal efforts to regulate GHGs in the US, as in Canada, have been largely
ineffective to date. However, a number of jurisdictions in both countries have
already implemented, or will soon implement, GHG reporting and/or reduction
regimes. The presentation will focus on the experience of Alberta, as the first
province to mandate reductions, and offer an industry perspective on the
benefits and disadvantages of regulating GHG emissions through an
intensity-based metric.
Introduction
Canada, with 0.5% of the world’s population, produces 2% of global greenhouse
gas (GHG) emissions. Oil sands account for 5% of Canada’s GHG emissions and
0.1% (1/1000th) of global GHG emissions (CAPP, 2011). Alberta is a land-locked
province situated in western Canada, north of the US border from Montana, and
is roughly two times the area of Japan, covering over 660,000 square kilometers
(Government of Alberta, 2011a). Alberta has a population of approximately 3.6
million (Government of Alberta, 2011b). In 2009, Canada’s GHG emissions totaled
690 megatonnes of CO2 equivalent (Mt CO2e) (Environment Canada, 2011). Alberta
accounts for 33.8% or 233 Mt CO2e of Canada’s GHG emissions (Environment
Canada, 2011). Conversely, the United States released 6,633 Mt CO2e in 2009,
according to the EPA (2011). In 2005, Florida released 337 Mt CO2e (Strait, R.,
Mullen, M., Dougherty, B., Bollman, A., Anderson, R., Lindquist, H., Williams,
L., et al, 2011).
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