Why we can't afford to expand high carbon fuels
Posted April 15, 2010
Speaking on a panel of the Energy and Climate Ministerial of the Americas (a meeting of energy ministers, industry and non-governmental representatives), I had this to say about the development of high carbon fuels and particularly about the Canadian tar sands:
I am not optimistic that strategies to reduce the environmental footprint of high carbon, unconventional fuels will work. Even if all the best technology that we have today were applied, there will still be unacceptably high trade offs – in carbon emissions, damage to the land, wildlife, and people, and ultimately in keeping us unsustainably dependent on oil.
Given rising demand for oil as the middle class grows globally and with the ever more dramatic reality of climate change, it is imperative that we reduce –rather than expand – our dependence on oil. At best, these fuels will forestall that imperative and, at worst, they will derail efforts to shift to a clean energy economy. Developing these fuels sends the wrong message to countries like China that are now looking at developing their own high carbon fuels industries.
My comments will focus mainly on the Canadian tar sands, since they are already in significant commercial production and are set to double or triple in the next decade. They can also tell us a lot about the downsides we face in developing heavy oils, oil shale, and liquid coal more broadly in the Americas. Finally, I focus on the tar sands because what our two countries do regarding this resource will have a lot to do with whether we will be effective leaders – or laggards – in achieving truly clean energy in this hemisphere and beyond.
Last year, when President Obama took his first foreign trip to Canada, he had this to say: "…the issue of climate change and greenhouse gases is something that is going to have an impact on all of us and, as two relatively wealthy countries, it’s important for us to show leadership in this area.”
This is the lens through which I ask this forum to consider the following three questions:
- Are the trade-offs too great in producing these high carbon fuels? Can the U.S. lead the “clean energy revolution” while expanding our dependence on these fuels?
- Are emissions from these fuels the “game changer” in meeting the goal of an 80% reduction in emissions from our transportation sector by 2050?
- Will development of these fuels make it politically difficult to adopt low carbon fuels standards and other critically important policies?
So why in our view too great a trade-off?
There are energy security risks in expanding our reliance on high carbon fuels. We will be locked in to the use of these fuels through an extensive network of pipelines and refineries, the politics of which are already undercutting our ability to pass low carbon fuel and fuel efficiency initiatives that wean us from oil. Without these oil savings policies, we will remain hostage to oil price volatility, oil wars and the cost to our economy of purchasing oil. And, in the longer term, national security is risked by aggravating climate change – a position increasingly endorsed by the military establishment.
There are serious environmental risks. For Canadian tar sands extraction, these include damage to the Boreal forest, huge water requirements and toxic water tailings ponds, destruction of habitat of migratory birds shared by all the Americas, and toxic air and water pollution from upgraders to refineries. Communities at both the extraction and refining end of these fuels are concerned about impacts on their health and surrounding environment. Those in-between are concerned about ruptures associated with high pressure bitumen pipelines. The risks are similar for other high carbon fuels –such as oil shale in the American West.
There are serious climate risks. The high production emissions – 3 times higher for tar sands and up to 10 times for oil shale – are one concern. The full lifecycle emissions (production and combustion) are also a concern. Locking ourselves into decades of emissions will make it difficult – if not impossible – to meet our climate goals. For Canadian tar sands alone, gains under the new U.S. fuel economy standard could be nearly halved by the growth in just the 20% extra emissions from the tar sands once production reaches 3 mbd. Those incremental emissions are equal to putting 22 million more cars on the road.
Improved efficiency in production, while a good thing, is swamped by expansion of the industry. While efforts can – and should – be made to address the environmental and carbon impacts of current operations in the tar sands, expansion has occurred at a reckless pace. The massive water and energy use, tailings ponds, and most fundamentally the alteration of a vast natural landscape – cannot be easily resolved by a technological silver bullet. And what we have seen to date is mostly unmet promises. Last week, the Government of Alberta released its own scorecard on a much ballyhooed plan released last year before President Obama’s trip to Canada. The scorecard showed they had met only two of 20 benchmarks for short term environmental improvement in the tar sands operations.
So what is our vision for transportation in 2050 without reliance on these fuels?
In North America, these fuels are destined for the U.S. transportation sector, which consumes over 75% of the 20 million barrels the U.S. uses every day. As a result of our energy bill of 2007, the U.S. is now on a trajectory to stabilize our oil use and carbon emissions in the transportation sector, assuming fuel intensity does not increase. Even more encouraging, NRDC’s analysis shows that by 2020, the U.S. can reduce oil use by over 4 million barrels per day (mbd), consistent with the President’s pledge to reduce oil use by about 3.3 mbd, within the same timeframe. We can achieve these savings by implementing the fuel economy standards announced two weeks ago, proposing and implementing heavy truck standards, moving more transportation to public and nonmotorized transit, including plug in electric vehicles, “smartgrowth” and making improvements in air travel and building efficiency. Deeper cuts – 10 mbd – are possible by 2030. In short, we do not have an ever escalating need for more oil and we can offset our foreign oil use with policies we are familiar with today.
Why is it important to start down this path of reducing our oil dependence?
NRDC’s analysis shows that by 2050 – in order to reach our stated goal of an 80% reduction in carbon emissions – our oil use will have to fall to 5% of what it is today for cars, SUVs and minivans. We’ll also need to reduce oil use in aviation, shipping and heavy trucks.
To accomplish these changes requires an enormous paradigm shift in how we use fossil fuels. It also presents enormous political challenges. So what policies can help us move towards this 2050 vision in a way that creates more winners than losers?
- Put in place policies that allow invention and creativity to flourish. Just think that when Congress passed the Clean Air Act in 1970, there was no such thing as a catalytic convertor. Like 1970, we should set the goal and let invention and creativity unveil today’s equivalent of this game changing technology. But policies are needed to level the playing field, including eliminating fossil fuel subsidies – called for by the President in the G20 – which amount to approximately $10 billion per year in this country alone. Today, it is very hard for low carbon fuels to get a foothold in a market so dominated by petroleum. The Low Carbon Fuel Standard, adopted in CA and proposed as a national standard in the U.S., would help remedy these challenges. It would allow for maximum flexibility to the industry while giving cleaner fuels a leg up by requiring carbon intensity in fuels to decline over time.
- Take a time out on investments in high carbon fuels. Let’s make sure there aren’t cleaner alternatives right under our nose before we invest in these high carbon fuels. For example, the decision to permit the dedicated tar sands Keystone XL pipeline in the United States should be delayed until there is a thorough analysis of need for the pipeline and the global warming impact is assessed. There are literally hundreds of billions of investment dollars at stake that could – and should – be invested in clean energy instead. Investing in technologies that lock us into a high carbon future make little sense in the face of the mounting imperative to move the other direction.
- Create incentives to overcome market barriers. We should invest in new technologies through government R&D, provide help in retooling manufacturing, create consumer and corporate fleet incentives for lowest emission vehicles, dedicate funding for priority transit projects, and provide incentives to reform land use and driving patterns.
- Finally, make sure our governments pass climate legislation and oil savings plans. Canada and the U.S. are in the political throes of enacting climate legislation. Canada has said it will follow the U.S. lead. Once this happens, we will begin the process of accounting for the carbon pollution in our energy use. This is a long time coming and we are grateful for the support of the President and his Administration for comprehensive, economy wide climate legislation, including the transportation sector. But we also need robust oil savings plans and I encourage the Administration to aggressively pursue the President’s pledge to reduce our overall oil use.
To quote the Administration’s energy plan:
“Our reliance on oil poses a threat to our economic security. Over the last few decades, we have watched our economy rise and fall along with the price of a barrel of oil. We must commit ourselves to an economic future in which the strength of our economy is not tied to the unpredictability of oil markets. We must make the investments in clean energy sources that will curb our dependence on fossil fuels and make America energy independent.”
I encourage all of you to help move America – and the Americas – beyond oil and in particular high carbon oil.
See the PowerPoint presentation that I delivered at the panel yesterday below.