Election 2006 - Issue: Climate Change and the Petro Industry
Following up on my comments regarding Martin’s jab at the US on climate change, it would be good to illustrate why the US assertion that they are leading the world on this issue is a political statement, not a strictly factual one.
The US assertion is rooted on a misleading statistic that shows US greenhouse gas emissions rising by 13% over the period from 1990 to 2003, while countries like Canada have significantly higher emissions growth (24% in our case) during that same period.
Why is this so? We Canadians like to think ourselves as being green, so what gives?
A big part of the increase differential can be found coming out of the Canadian petro-complex, and the best way to get down to brass tacks is to understand how much US petroleum supply has shifted from domestic to foreign supply over that period.
The US produced significantly less petroleum from domestic sources in 2003 than it did in 1990. 7.355 million BOE per day vs 5.681 MBOE per day in 2004 – a 23% decline in domestic production. Their domestic production peaked in the 70’s and has been in steady decline ever since.1
An important aside: some believe world production peak is not that far off; the US itself thinks this is 2025 – 2030, others (and with some reason) feel the peak is a lot closer. In either case, you can well imagine the demand for Canada’s oil resource will be strong. The world is not prepared for peak production, period.
Canada’s contribution to US imports rose over that same period from 0.934 million BOE per day in 1990 to 2.072 MBOE in 2003, a 122% increase in our supply (and a relatively linear increase in our CO2 emissions).
Virtually all oil exported from Canada during that period of time went to the US.
Total US oil imports (all sources) over that same period rose from 8.018 million BOE per day to 12.264 MBOE, a 53% increase, of which Canada’s share accounted for 27% of the total.
The single biggest contributor to the relative differential in GHG production by the US and Canada is that the US has effectively “outsourced” the GHG emissions to petroleum exporting countries such as Canada, and in Canada, oil sands and the petro-chemical industry are the single biggest contributor to our GHG emissions growth profile—there’s no magic to predicting that our GHG emissions are going to grow rapidly over the next decade as the 100 billion plus in new oil sands projects (and growing) turn into new production.
From 1996 where there was no production to 2003 oil sands grew to 0.855 million BOE per day – when the current planned investment is on-line that will be measured in multiple-millions.2
While some conventional production will be lost (exhausted), there’ll still be a significant net gain in our production and thus GHG output.
Bottom line: the US progress on climate change and dependence on foreign oil is minuscule when compared to the enormity of the issue. They, and we, have nothing to crow about.
Data sources: