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Oil Sands Emissions on the Decline Even as Production Grows

Stockhouse Editorial
5 Comments| April 8, 2022

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Click to enlargeGreenhouse gas (GHG) emissions from Canadian oil sands production should be in decline by the middle of this decade even as production continues to grow.

This is according to a report by S&P Global Commodity Insights (NYSE: SPGI, Forum) released this week that assesses current technology trends and production growth.

Entitled The Trajectory of Oil Sands GHG Emissions: 2009-2035, the report also fond that continuing efficiency improvements, as well as new technologies, are poised to overtake slowing production growth and result in absolute emission reduction by middle of this decade.


From the report:

“[L]ong-term trends of reductions to the GHG intensity of oil sands production are set to reach an inflection point around 2025. Immediate pressure on absolute emissions to rise is expected in the short-term prior to that point. Absolute emissions are then expected to begin to decline from a level between 87-89 MMtCO2e, even as production rises by more than 600,000 barrels per day during the same period (2020 to 2025).”


Analysis:

S&P Global Commodity Insights’ vice president, GHG estimation and coordination, Kevin Birn noted that GHG intensity improvements do add up.

“Our latest analysis shows that, if existing trends continue, they will overtake pressure from a slowing growth profile leading to absolute emission declines within the next few years.”

He added that efficiency improvements, including higher facility utilization rates as well as the roll-out and ramp-up of newer, less GHG-intensive operations have been leading contributors to past intensity reductions.
Admitting that these factors are expected to continue to play a role in future, carbon capture and storage as well as what S&P Global Commodity Insights is calling steam displacement technologies have the potential to result in more dramatic reductions.

He said that although it can take time to be developed, carbon capture and storage is a wildcard when we look at technologies that can really make a difference for large industrial scale emitters like in the oil sands.

“Another wild card is the increasing use of what we are calling steam displacements technologies in thermal oil sands operations. This category of technologies can materially reduce the steam, and thus emissions required to produce a barrel of oil.”

Calling this arguably the most rigorous examination of oil sands GHG emissions to date, he added that these new S&P Global Commodity Insights analysis is and the findings that, even if current trends continue, absolute emissions are set to decline within the next few years are profound.

“This may yet prove to be a conservative estimate with both industry and governments in Canada vowing to take more material actions to lower the oil sands emissions profile and improve the long-term carbon competitiveness of the sector to better compete through the energy transition.”


Final thoughts:

Carbon capture and storage is a wildcard when S&P Global looked at technologies that can make a difference for large industrial scale emitters like in the oil sands.

“Another wild card is the increasing use of what we are calling steam displacements technologies in thermal oil sands operations. This category of technologies can materially reduce the steam, and thus emissions required to produce a barrel of oil.”


New to investing in Oil and Gas? Check out Stockhouse tips on How to Invest in Energy Stocks and some of our Top Energy Stocks.

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Energy Trending News hub on Stockhouse.



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