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Tuesday, December 18, 2018

Climate Politics In Canada

When teaching, I often explain to my students that other western democracies generally don't have debates about the veracity of climate science. Instead, the debates often focus on the cost and appropriateness of particular policy measures.

In Canada, for example, I attended a Fulbright scholar panel recently that revealed this quite clearly. The business lobbyist on the panel, who used to work for conservative PM Steven Harper, favored a form of carbon pricing. That typically means either taxing carbon or creating a cap on carbon levels and auctioning permits.

Today, I was reading a recent magazine article (from an insert in the Toronto Globe and Mail) and found this interesting excerpt in a piece on Canadian oil sands:
Suncor CEO Steve Williams, meanwhile, has emerged as one of the most ardent critics of climate-policy footdragging you'll find anywhere. 
"It is a matter of profound disappointment to me," Williams told a Calgary crowd recently, "that science and economics have taken on some strange political ownership--why the science of the left wing is different than the science of the right wing." You could be forgiven for thinking he was directing his ire at opponents of his industry, but his actual target was the political right and its refusal to give a fair hearing to economists arguing that carbon pricing represents the most efficient way to take action. It was, in essence, an established oil sands CEO dressing down his most vocal boosters--telling them it's time to get with the program on climate change.
The article continues by discussing various efficiency innovations firms have introduced in the production of energy from oil sands:
Oil sands companies have embraced the need to act on climate change not because it might make them look better, but because the risk of not acting has proven to be so great--a fact made clear to the industry almost daily since the name "Keystone XL" first hit the international political radar. Oil sands companies know they have no viable future unless they can find a way to be welcome and profitable in a low-carbon economy. 
The other critical lesson oil sands companies have learned is that there is opportunity in taking action. For many, this has meant obsessive efficiency improvements. By consuming less fossil fuel in the digging and processing of bitumen, they have cut costs and boosted profits, even as they've shrunk the carbon footprint of each barrel of oil. It's mainly a question of competitiveness, but also an opportunity to develop pollution-reducing technologies that may one day be of enormous value in the marketplace. 
Canadians are also talking seriously about uses of those oil sand bitumen that don't involve burning it for energy. An interesting study on that theme was prepared by Alberta Innovates (provincially-funded) and was discussed in an October Corporate Knights article.
The study, known as Bitumen Beyond Combustion, gave a reasonably positive outlook for bitumen-based materials that are expected to see demand growth over the period until 2030, a time when demand for crude oil will grow at a slower rate than it has over the past decade. 
Chief among those materials are carbon fibres derived from bitumen. Carbon fibre is a fast-growing product that is both strong and light. Currently, the industry is growing at a compound annual growth rate of more than 10 per cent. 
Already in use in products like cars, the bitumen study found that future growth would be underpinned on carbon fibres replacing steel, cement and wood – and that bitumen-made carbon fibres could also find a market by being mixed with those materials. 
If carbon fibres took just one per cent of the global steel market by 2030, that would require 3 million barrels of bitumen a day, the study found.
That kind of usage would be significant. In 2017, Canadian oil sands production was about 2.6 million barrels per day. Recent projections suggest 3.8 mbd production by 2025.

The study also discussed asphalt as a major alternative use:
 Another avenue could be asphalt for roads. The market, currently US$50 billion in value globally, is expected to grow 4.1 per cent until 2030, the Bitumen Beyond Combustion report said. 
The oil sands already produce road asphalt for western Canada. The trouble with expanding into new markets is that it needs to be kept very hot for transport, as high as 150 degrees Celsius. But if the process of turning the material into pellets can be made cheaper, oil sands-sourced asphalt would fulfil large demand in China, said Nathan Ashcroft, an engineer with Stantec who worked on the study. 
“That’s something that can be achieved much, much quicker (than carbon fibre),” Ashcroft said. “The infrastructure, the rail cars, are out there, the global pull, the pricing mechanisms – people are building roads all over the world everyday.” 
Getting oil sands-derived asphalt onto international markets in five years is within reach, he said. Markets for carbon fibres mixed with other materials like concrete, which offer an opening for bitumen as a feedstock, will become widespread within the 10- to 20-year timeframe, said engineer Axel Meisen, who also worked on the study.


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