“Development of the Canadian oil sands encapsulates the complexities the world faces on energy, environmental and security issues.” - CERA
CERA Report - Available for Public Download
Jul 27, 2009 - CERA has publically released their study "Growth in the Canadian Oil Sands: Finding a New Balance."
Download the Report
Oil Sands Move from the “Fringe to Center” of Energy Supply
May 20, 2009
Canada's oil sands will be an increasingly pivotal player on the world stage, says a new report.
Oil sands development has moved “from the fringe of energy supply to the centre,” with future development moving in parallel with new technologies, improved efficiency to reduce greenhouse gases, regulatory standards and increases in alternative forms of energy.
The Cambridge Energy Research Associates (CERA) study, Growth in the Canadian Oil Sands: Finding the New Balance, released Monday May 18, 2009, says “development of the Canadian oil sands encapsulates the complexities the world faces on energy, environmental and security issues.”
“The future of oil sands development is of great importance to Canada’s overall economy. Major US interests are at stake, and there will be a significant global impact as well,” the report says.
By 2035, global oil demand is projected to reach between 97 million barrels per day (mb/d) and 113 mb/d. In 2008 the total was 85 mb/d. “Even in a world of relatively slow demand growth, new supplies of oil will be needed, especially to meet demand for greater mobility among those entering middle income levels around the world and to offset declining production in existing oil fields,” the report says.
“Alternative forms of energy, such as biofuels, wind, and solar power, will play a growing role in satisfying higher demand, but so will fossil fuels, including oil,” adds the report. “Indeed, all forms of energy – as well as greater efficiency – will be needed to deliver and support higher living standards around the world.”
The report also points to a number of challenges facing oil sands development, including the need for continued private and government investment in technological advances that, for example, will reduce water use and the impact of tailings ponds. The study also underscores the need to address social impacts of development, including the importance of working closely with aboriginal communities and ensuring community infrastructure is aligned with the pace of development.
“In the context of meeting both rising global demand and increasing expectations for improved environmental performance, the study is an important benchmark of where the industry is today and where it must be tomorrow,” said David Collyer, President of Canadian Association of Petroleum Producers.
Among the report’s other findings:
Current production of oil sands crudes results in 5 to 15 per cent greater GHG emissions than average crude oils used in the U.S. However, GHG emissions need to seen in a “comparable framework which indicates that on a wells-to-wheels basis Canadian heavy crude are within the general range of crude oils already consumed in the United States,” the report says.
In addition, “the ‘average’ conventional barrel imported into the United States may become heavier over time as high-quality light crude becomes scarcer.”
The oil sands are already subject to some of the most stringent regulations in the world, and Canada is more transparent than many competitor nations. The high visibility of the oil sands makes it imperative to develop a broad regulatory framework that helps ensure public confidence, the report says. “Regulations that govern water use, waste management, and site reclamation in the Alberta oil sands will need to address the cumulative impact of the industry’s growth, not just individual projects.”
Energy Security and Climate Change
Canada’s share of US oil imports could rise from 19 per cent in 2008 to 23 to 37 per cent in 2035 (under the report’s range of scenarios) reducing US dependence oil from elsewhere in the world. The study also notes that “a key challenge for continued cooperation is the development of a common framework for regulating greenhouse gas emissions.”
Innovation has made it possible for the oil sands to move “from the fringe of energy supply to the centre,” according to the report. For example, “Since 2000 the amount of steam used in SAGD has been cut in half, significantly reducing GHG emissions on a per-barrel-of-output basis. As in the past, technology and process advancements will lead to greater efficiency and new ways of doing things, which in turn will enhance investment economics and improve the GHG footprint of the oil sands.” However, this will require innovation “across all sectors” including both private and government investment.