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.
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).
