P. 1
PCO Oilsands memos

PCO Oilsands memos

|Views: 573|Likes:
Published by mikedesouza
The Privy Council Office warns that oilsands development has unpredictable and potentially dangerous consequences that could harm the economy and environment.
The Privy Council Office warns that oilsands development has unpredictable and potentially dangerous consequences that could harm the economy and environment.

More info:

Categories:Types, Letters
Published by: mikedesouza on Feb 20, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

02/20/2012

pdf

text

original

Document Released Under the Access to Information Act I Document dlvulgue en vertu de la Loi sur l'acces ]'information_

a

1+1

Government of Canada Privy Council Office OttawaCanada K1AOA3

Gouvernement du Canada BUreau du Consei! prive

SECRET

CANADA'S

ENERGY SECTOR only)

(Information

SUMMARY
o You will be taking part in an energy roundtable in Calgary on March 10, 2011 with representatives from Alberta's energy sector. Representatives from major Canadian oil and gas firms ""-~7i:ti" ,_ %imn- Suncor,~r~~~,*CNRL, and ' l--:(>IIi~i~~ - Encana), think tanks~~ ';m~'.r Canadian ergy Rese arch Institute) and academ ic institutions: ~@[![\]i:filr:'@';'Institute for Sustainable Energy, Environment and Economy, -' , ~, ."'Mi ",~. lj ~ ._" .L r Canada School of Energy and Environment) are expected to participate.
•.. ~~,~!% ~ ~

o

5.19(1.)

o

This note provides an overview of Canada's energy sector and its importance to the Canadian economy, with a focus on Alberta It also addresses environmental challenges and technology responses, labour challenges and oil sands advocacy. Speaking points are included (attached at Tab A).

'-------------~. Background
Canada has o

an extensive natura' resource

base

Canada is blessed with an important resource endowment Carnada has the world's second largest oil reserves (recoverable at today's prices) after Saudi Arabia, estimated at about 170 billion barrels. Canada's oil resource base is significantly larger still, at over 300 billion barrels, primarily in the aU sands. Canada also has over 200 years of proven coal reserves and, according to recent

Canada

Document

Rele.ass'3dUnder the Access to

Information Act I Document divulque en vertu de la Loi sur l'acces a l'infcrrnation.

-2-

SECRET

estimates by the Canadian Society for Unconventional Gas. enough natural gas (both conventional and unconventional) to maintain production at current levels for over 100 years.

o

Because of its extensive resource base, solid institutions and strong investment climate, Canada is a major energy producer, and increasingly recognized as such internationally. Canada is well positioned to benefit from growing global demand for energy.
all

The energy sector is
o

impodant driver of the Canadian economy

From hydroelectricity ill Labrador and Quebec, to uranium and oil in Saskatchewan, oil sands and coal in Alberta, oil and gas in the Newfoundland and Labrador and Nova Scotia offshores, and shale gas in British Columbia, the production of energy is an importer driver of the Canadian economy. Overall the energy sector III 2009 accounted for 6.7 per cent of Canada's gross domestic product (GOP) and directly employed over 260.000 people, primarily in the oil and gas and electric power sectors.

o

o

In 2008, before the recession, Canadian energy exports were valued at $128 billion, representing about 28 per cent of Canada's total exports. In 2009, Canadian energy exports were valued at $84 billion, representing about 23 per cent of total exports. While energy sector GOP is below its July 2008 pre-recession peak, production and exports are seeing a healthy rebound. The Petroleum Services. Association of Canada estimates that in 2010 the oil and gas industry drilled over 30 per cent more wells than in 2009. According to Natural Resources Canada, higher oil prices. an influx of foreign direct investment. and industry success in extracting high value resources such as natural gas liquids have led to this growth.
Canada IS a key energy partner to the United States (U.S.). An extensive network of integrated pipelines and transmission infrastructure connect the two countries. Today Canada exports about two million barrels of oil each day to the U.S., making it thai country's most important foreign supplier of oil, and more than Saudi Arabia and Mexico combined. Canada is also the most important foreign supplier of natural gas to the U.S. Overall, Canada's energy exports to the U.S. were valued at $124 billion in 2008.

o

Document Reieased Under tile Access to Information Act I Document d.vulque en vertu de la Loi sur l'acces a I'information.

-3o

SECRET

Existing pipeline projects, such as TransCanada's Keystone XL pipeline project, currently the subject of regulatory reviews in the U.S., can help support continental energy security objectives and facilitate the growth of energy exports to the U.S.

Labour challenges are a potential hurdle to continued growth in Alberta's energy sector
o The energy sector is currently facing a significant labour shortage challenge: the Petroleum Human Resource Council forecasts the sector will need 105,000 new workers by 2020 to meet increased demand, and the Mining Industry Human Resources Council predicts that between 60,000 to 90,000 new workers (including in oil sands mining) will be needed to meet anticipated Canadian production growth through to 2017. Compounding this challenge is the pace of technology and the length of time it takes for employees to develop expertise in their field. For instance, it can take between five and seven years before a worker in the petroleum sector becomes fully proficient at their job. In addition, there is a demonstrated need for improved skills and knowledge among new recruits. For instance, only 53 per cent of the mining sector workforce has participated in post secondary education. Canada's ageing workforce has hampered recruiting efforts for new employees, and is expected to worsen over the coming decade. Attracting and retraining individuals from underrepresented groups, including Aboriginal peoples, women and immigrants has also been a challenge. The perceived negative image of the petroleum sector, especially in terms of the environmental impact, has also created a barrier for workers wanting to work in the sector. The remote location of the oil sands, for example, as well as the cyclical and seasonal nature of work also creates barriers to an available supply of labour.

o

o

o

o

Rapid growth, patticularly in the oil sands, has given rise to important environmental challenges
o

It took 40 years, from 1967 to 2007, to extract 6 billion barrels of oil from the oil sands. It is estimated that the next 6 billion barrels will be extracted over the next eight or nine years.

Document Released Under the Access to Information Act / Document divulque en vertu de la Loi sur l'acces l!inf~~(f.r1(ob)

a

-4o

SECRET

This ra..eld growth in oil production from the oil sands has shed light on the significant environmental challenges associated with this economically important sector These include rapidly increasing greenhouse gas (GHG) emissions, tailings management issues, and habitat degradation and loss

o

The oil sands are the fastest-growing source of GHG emissions in Canada, While today they represent only about five per cent of Canada's total GHG emissions, that figure will increase rapidly as oil sands production doubles over the next decade, According to
Environment Canada's emissions trends, emissions from the oil and gas sector could increase by 30 per cent between 2005 and 2020, driven by a more than 200 per cent increase in emissions from the oil sand sectors, By 2020, Oil sands GHG emissions could total 92 million tonnes a year, up from about 31 in 2005. This increase of 61 million tonnes is greater than the p.~cted emissions growth for all other sectors combined.

/.

v r-

o

While the industry has taken steps to reduce emissions. the shift from mining to in situ production, which is almost three times as emissions intensive as mining, is resulting in a contiiiU'ed acceleration of emissionsfrom this sector. The industry's approach to tailings, meanwhile, has been widely criticized. including in a recent Royal Society of Canada report, as representing a significant environmental and financial risk to the province of Alberta. While the industry has taken steps to recycle water and collaborate on the development of innovative tailings management technologies, at this point in time it is far from clear that tailings ponds can be adequately restored,

/

o

o

issues, such as the.loss of wetlands and hC!.Qiiat. also exist and pose a risk to the ecological integrity of the ofl sands region. At present the c~s otg.il.§ands development are not adequately understood. ~

Other environmental

7(;(

Information Act J Document divuigue en de 18 Loi sur l'acces l'mforrnation.

a

vern,

5.21(1 )(b)

o

o

The Government of Canada has also announced that it would be introducing regulations to reduce emissions from coal-fired electricity generation. Alberta, with its coal-fired ants

International agvocacy otA/beda's
parficu~n

~ne.f.9'j. ector, and1b_e oil sands in s

...-------

ongoing activity

o

o

o

o

the two governments

-----

have worked together

----------~

, Recently,

to engage the

Document Released Under the Access to Information Act / Document d.vulque en vertu de la Loi sur t'acces I'information s.21(1)(a)

a

s.21 (1 )(b)'

-6-

SECRET

European Commission over their proposed Fuel Quality Directive,/'" which would discriminate against oil sands-derived fuels. This work is ongoing.

Timothy Sargent Attachment

Bea u rega rd -T ell ie r & Rafte rIF orge rontS a rg entlvs

s.21(1 )(a) s,21(1)(b)

Document Released Under the Access to Information Act I Document oivulque en vertu de la Loi sur l'acces l'information.

a

SECRET

Speaking Points Energy (gene'ral)
• • Canada can play an important role in helping to meet growing demand for energy in the years and decades to come. Canada has strong Institutions and an extensive resource important cornerstones of our lonq-term prosperity. global

base, which are

Canada's energy sector
• • Canada's energy sector is globally competitive and attracts investments from the United States, Europe,. Japan, China, and South Korea. Overall the energy sector in 2009 accounted for 6.7 per cent of Canada's GDP and directly employed over 260,000 people.

Energy - Trade • Canada is a key energy partner to the United States. The United States relies on Canada for supplies of oil, gas and electricity. Canada is the most important foreign supplier of oil and gas to the United States, Canada's energy infrastructure is integrated with that in the United States. An extensive network of pipelines and transmission infrastructure connect the two countries. Existing pipeline projects, such as Transcanada's Keystone XL pipeline project, currently the subject of regulatory reviews in the United States, can help support continental energy security objectives.

Oil sands • • The oil sands represent a reliable source of energy for Canada, United States and beyond. the

All regions of the country benefit economically from development of the oil sands, from suppliers in Alberta to manufacturers in Ontario and Quebec. While at present the oil sands represent only about five per cent of Canada's total greenhouse gas emissions, emissions will increase rapidly under a business as a usual scenario.

Document R8i8aSt:O 01 rGel tl Ie A ... I_.<"-'ss 1.0 Information Act I Document divulque f.'Il vertu de la Loi sur l'acces l'information. !

a

-2 •

SECRET

The challenge moving forward will be to develop the oil sands in an ever more environmentally responsible manner. This is important not only to protect the environment but also to ensure market acceptability going forward as the world moves towards less carbon-intensive sources of enerqy.

Greenhouse Gas Emissions • Under the Copenhagen Accord, Canada is committed to reducing its greenhouse gas emissions by 17 per cent below 2005 levels by 2020. a target that is aligned with that in the United States. According to Environment Canada data, provincial and federal actions to date will take Canada about one-quarter of the way to meeting its Copenhagen target. To reach Canada's Copenhagen target, the Government intends to work on a sector-by-sector basis to regulate and reduce emissions, beginning with the transportation sector and the coal-fired power generation sector.

Federal clean energy and technology investments • The Government has developed a broad suite of policies and programs to help meet Canada's energy and environment objectives. Since 2006, the Government has invested more than $10 billion to reduce greenhouse gas emissions and build a more sustainable environment through investments in green infrastructure, energy efficiency, clean energy technologies and the production of cleaner energy and cleaner fuels. Investments include $1_5 bil!lon to support the production of renewable fuels, $1.5 billion to support the production of renewable power, and $795 million over five years through the Clean Energy Fund to advance Canadian leadership in clean energy technologies such as carbon capture and storage.

r-------------~ Retufil.cl from the PM
OCT 1 7 Z011
Retourne du PM

Clerk of the Privy Council and Secretary 10 Ine Cabinet
Ottawa, Canada K1A OA3

Greffier du Conseil prive . secretalre du Cabinet

SECRET

5.21(1)(b) 5.15(1)

L..

·OCT 12 2011

MEMORANDUM FOR THE PRIME MINISTER

EUROPEAN UNION FUEL qUALITY
(Information Only)

DIRECTIVE

SUMMARY o The purpose of this note is to provide you with information on the latest developments concerning the European Union (EU) Fuel Quality Directive (FQO)@d:::to describe Canada's overall approach to advocacy in this area: The European Commission is moving forward with an FQD implementation measure that would single out the oil sands by aSSigning a uniquely higher greenhouse gas intensity value to oil sands crude.

o

o

o

Background o In April 2009, the European Commission (the Commission) proposed to adopt a low carbon fuel standard by modifying framework regulation-the Fuel Quality Directive (FQO)-in

a order

Canada

Document Released Under the Access to Information Act / Document divulque en vertu de la Lot sur l'acces a l'intorrnation

-2-

SECRET

to reduce life-cycle greenhouse gas (GHG) emissions for fuels used in road transport and non-road mobile machinery by 6 per cent below 2010 levels by 2020. o The Commission's cfimate action directorate (CLlMA) has led the development of an implementation measure for the revised FQD that would effectively discriminate -against oil sands-derived crude oil ("natural bitumen") by assigning a default GHG life-cycte value to fuels derived from this product that is about 22 per cent higher than that assigned to fuels produced from conventional crudes from any other source,'

s.21(1)(b)

o

o

o

Document Released Under tile Access to Information Act / Document divulque en vertu de la Loi sur l'acces I'information

a

o

The majority of Canada's oil sands crude is exported to the United States where it is blended with other crudes for continental consumption or export. The blending of different crudes in the North American pipeline system pr~des the ready establishment of a chain of custody system that would be required to comply with the FQD should it discriminate between oil sands and other crudes.

'\ i

S.15(1)
5.21(1 )(b)

For example, an AplU. 2Q_tLs.tudy by
,

....-.-.-~--- ...

-----~

Document Released Under the Access to Information Act I Document oivulque en vertu de la Loi sur r acces a l'intorrnation

-4-

SECRET

5.15(1)
s.21(1 )(b)

Cambridge Energy Research Associates finds that oil sands products are in the same GHG intensity range as current European crude imports from Venezuela, Angola and Nigeria, to name a few.

--_.---_

....

Docurnent Released Under the Access to lntormation Act I Document divulgue en vertu de la Loi sur l'acces l'inforrnation

a

-5~

s.15(1) s.21(1)(b]

.~1lft

pee
o

Comment s.21(1)(aJ s.21(1)(b:

Document Releaserrtf Idl;:jl t! Iti"Access to Information Act I Document divulque en vertu de la Loi sur l'acces a l'intorrnation.

-6o

SECRET

s.15(1) s.21(1)(a) s.21(1 )(b)
o

Wayne G. Wouters Attachment Bea u regard- T ellie r/F orgeron/Sa rgentlvs

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->