Human induced global climate change resulting from the increased release of greenhouse gas emissions represents one of the most pressing environmental concerns facing our generation. To help combat this, the United Nations Framework Convention on Climate was ratified by 189 members and it laid the groundwork for the Kyoto Protocol which called on countries to agree to voluntary emission reductions based on 1990 levels. Canada was among those countries that ratified the Kyoto Protocol and it agreed to a 6% reduction, a commitment which called on Canada to lower annual average emissions below 563Mt for the 2008-2012 period. However, since this time Canada’s emissions have steadily increased with the most recently published numbers revealing 2005 annual emissions of 747M. While meeting its Kyoto commitments during the 2008-2012 period now seems highly unlikely, simply meeting these targets at all within the next decade will require Canada to make emission reductions of over 184Mt.
Within Canada, the largest single contributor to the recent growth in these emissions is the extensive oil sands operations taking part in the province of Alberta. Due to the poor quality of the oil significant amounts of energy and water are required to produce the final synthetic crude oil, and as a result large amounts of GHGs and other pollutants are released. Despite the environmental drawbacks, the economic and political pressure to develop a resource thought to have reserves over 173 billion barrels of oil has been enormous, and thus massive development has taken place.
Given these competing interests, the question therefore becomes: How can the Alberta oil sands be developed while at the same time allowing Canada to meet its Kyoto commitments? An important principle that was taken into consideration when answering this question was that of ‘polluter pays’, that is, if an industry pollutes in the pursuit of profit it should be responsible for this pollution, and therefore any solution should be based primarily on private sector investment. Via literature review and the interviewing of experts within the fields of Carbon Capture and Sequestration (CCS) and Enhanced Oil Recovery (EOR), it was determined that the establishment of a large-scale CCS network in Western Canada represents the most cost-effective option for reaching Canada’s emission targets. While such a network would be costly to build, these costs could largely be borne by private sector companies involved in EOR, particularly if government legislation provided these EOR developers with a favourable royalty regime and a stable and comprehensive regulatory framework with respect to domestic GHG emissions.