IOL-O46 RESPONSE TO A FRAMEWORK FOR DISCUSSION ON THE ENVIRONMENT THE GREEN PLAN: A NATIONAL CHALLENGE June, 1990 Foreword mperial Oil Limited is pleased to off er the following response to the federal government's "A Framework for Discussion on the Environment - The Green Plan: A_National Challenge". As a major participant in the country's petroleum industry, we have an important stake in the development of public policy. We believe that the thoughts expressed in this document, along with our recently published "Discussion Paper on Potential Global Warming", will positively contribute to the current national debate sur!ounding the ·development of a new environmental policy framework for Canada. We encourage you to examine our ideas. Imperial" Oil has been involved directly as a company, as well as through industry ' associations, in the recent consultation sessions held across Canada on the Green Plan. A key theme that continues to permeate our thinking is the need to strike a balance between environmental concerns and Canada's economic priorities. We firmly believe that a strong economy provides the means to achieve environmental quality. In addition, the globalization of trade and commerce requires that we increase the international competitiveness of our economy at the same time as we embrace environmental issues that increasingly have international dimensions. A constructive outcome for global environmental quality, we believe, will require international cooperation rather than unilateral actions by individual countries. Imperial Oil is committed to help meet the environmental challenges facing Canadians. Our submission outlines work we have underway to contribute to the development of a new environmental policy framework for Canada, including a seven-point work program relating lo potential global warming and discussion papers on air quality and economic instruments to achieve environmental objectives. We welcome your comments and suggestions. J.D. Mcfarland A.R. Haynes v,n:-PHESllJENT, CHAIRMAN AND ENVIRONMENT CIIIEF EXECUTIVE OFFICER 3 Contents I. INTRODGCTION II. GGIDING PRINCIPLES III. EKVIRONMENTAL CHALLENGES A. Air Quality 6 7 9 9 1. Ground-level Ozone and Urban Smog 10 2. Toxicity ofTrans,portation -Fuels 11 B. Water 11 C. Waste 11 D. Potential Climate Change 12 IY. INSTRUMENTS OF CHANGE V. RECOMMENDATIONS AND COMMITMENTS 13 14 5 Introduction mperial Oil Limit ed ("Imp erial") ments to achieve environmental goals. We welcom es th e opportunit y t o believe these discussion papers - which we respond to th e fed eral govern - plan to complete by year end - will make a ment 's "A Framework for Dis- valuab le contribution toward finding effeccussion on th e Environment - · t ive solu tions to Canada's environmental challenges . . The Green Plan: A National . . In design ing a new environmental policy Challenge". As a leading indu strial company in Canada and as a major producer of fossil fuels, petrol eum products and petrochemicals, we have an important stake and a keen interest i:1 participating fully in the development of public policy concerning environmental issues. To this end, we are responding to those parts of the Green Plan where we believe we can make the m~st meaningful contribution to t he fram ewor k for Canada, we believe it is importan t t o reflect on where we have been and where we ar e heading in terms of environm ent al qu ality. Looking b ack , we need to acknowledge that considerable progress has been made on man y front s -in impro ving the environmental qualit y of the air, water and land in Canada. Thi s is important to recognize because we are doing some thin gs ri ght and these ·need to be discussion. Our comments are focussed on the envi- continu ed. Prog ress has come as a result of ronmental policy development process and a numb er of factor s. Advances in measurethe guiding principles and other considera- m ent techniqu es and science and technology tions we believe are critical to its success. have enabl ed impro ved un derstanding of These provided the context for Imperial's environm ental probl em s and have guided recent Discussion Paper on Potential solutions. We have incr easingly recognized Global Warming (March 1990), which is , the interrelation ship of th e environment and also being tabled as a contribution to · this the economy, and thi s has been reinforced by consultative process. The paper describes a the report of th e Worl d Commission on seven-point work plan now underwi;ty ·in Environment and Developm ent (the BrundtImperial, the results of which will be com- land Commission) in 1987 and by recent municated widely later this year. events in East ern Europ e. T here has been inWe have since commissioned other work creased cooperation , consultation and comto develop an integrated perspective on air mitment by man y sectors of Canadian society quality issues in Canada and to define fur- to achieve reali sti c en vironmental goals. ther contributions Imperial can make on There is a wider r~cognition that many en· these issues. To complement these efforts ' vironm ental issu es have international diwe are also developing a companion discus- mensions. In terms of the economy, we haYe sion paper on the use of economic instru- seen the benefit s of red uced intervention .. into the working- of market forces. As we look ahead. we are perhaps at a new crossroads. Emironmental issue:; are becoming more complex and potentially more costly. Societal expectations and standards &.rebecoming more demanding and our success in achie,ing these may be harder to measure. Looking farther out, world population groMh may loom as the toughest em,rronrnental issue. In t lw face of ::-uehchallenges, we believe it i::-critically important to ground Canada's new em ironmental policy framework on a set of guiding principles that reflect lessons learned from the past and a sense for these emerging realities. In this regard, the federal government may wish to consider the following guiding principles which have helped Imperial Loshape and focus its ideas. GuidingPrinciples 1. '·Strike the balance betu:een environmental a_nd economic priorities." A strong economy provides the means to achieve environmental quality. The sooner this reality becomes a part of the way we Canadians think about our country and its resources, the more likely we v.ill be able to find a workable balance between our economic and environmental priorities. Reasonable people can find such a balance. It v.ill mean incorporating into the equation the full costs of environmental degradation and the real cost of environmental protection. This will require a strong commitment by many government departments to work together as well as to work closely with industry, special interest groups, economists, the scientific community and the public to achieve mutually agreed-upon environmental and economic goals. Canadians also need to better understand the · full impact upon our economy of increasingly competitive worldwide trade and commerce and the imperative for Canada to compete effectively. We are at a point in history where there is an increasing trend for political and economic forces and policy actions to be global and integrated. This means we need to understand our strengths and weaknesses as a trading nation and the unique contribution we make to the worldwide economy and factor these considerations into negotiations on international environmental protocols. Canada is to a large extent a country of commodity producers whose prosperity flows from a resource-driven, energy-intensive industrial economy that relies heavily on international trade. We need, therefor.e, to avoid taking unilateral Canadian action on global environmental problems that are significantly out of step with other trading nations.' This kind of leadership would be costly and ineffective if it resulted in ind us-· tries simply redirecting their operations to other countries. 2. "Search out the best thillkir,g of all stakeholders." A consultative process that effectively draws out the viewpoints and expertise of a wide variety of interested individuals and groups across the country is vital to the process of 7 ---------- - developing effective publi c poli cy. It is th e rol e of governm ent to facilitat e th e con sultativ e pro cess, to set national prioriti es and goals, and to parti cipat e effectively in int ernational n egotiations . We believe that business has an essential role both in helping to shap e these goals as well as in the developm ent of policy options that achieve the desired res ults in the most effective and efficient manner . Our responsibility, th ere fore, is to ensure the best available infor mation, knowledg e, experienc e, and scientific and bus iness perspective s ar e shar ~d with government and' other parti cipant s . 3. "Enroll tho se closest to th e.pr oblem to help fi nd sol ut ion s." Fully informed, knowledgeab le partic ipants cap. help governments to shape the k~nd of publi c policy that evokes effective action from all sectors of the economy and fromeach of us as individuals. At lmperiaJ we are dedicated to being a prem ier corpor ation in Canad a, as reflected in everythin g we do. And that includes our commitm ent to contribut e to solut ions for th e many environmental challenges we face as Canad ians. Many of th ese challenges span the globe, and trul y·know no boundar ies. Im perial Oil has a role to pla y, not only as a socially responsible citizen of th e world but also as a good Canadian corporat e citizen , because we recognize Lhat our operations can pot entially have adverse effects on the environm ent. Without doubt, th e most valuable contribution we and our colleagues in industr y can make is to ensure that ~nvironm ental protection remains a top ,priorit y in all our business ope_rations. We continue to participate in the development of the scienc e and implementation of new technologies to min- 8 imize th e effect of our operation s and produ cts on the environment. Compreh ensiv,~ stan dard s, opera ting practices and managing systems are in pl ace, and are being continuou sly impr oved, to safeguard the air, the water and th e lan d we use in the production and distr ibution of our products . This is our commitm ent to th e pu bl ic. We also b elieve we can contribute knowl- I edge and exp ertis e to th e development of balanced and effective publi c policy to meet a wide range of environm ental challenges by continuing to work with indu stry, government s, busin ess, scienti sts, publ ic interest groups and th e communiti es in which we operat e. 4. "Apply sound science to defin e problems and guide solutions. " Scientifi c knowl etl.ge is an, essent ial foundation to ensur e that the right actions are taken to prot~ ct th e environm ent and that these actions ar e effectively appli ed. T his means developing data and risk assessments that have int egrit y, in ord er to foster informed, intelligent debat e. Industry ha s a major rol e to play in improving scientific und erstandin g. For example, at Imperial , we have und ertak en a seven· point work program to find more answers based on so:1nd science and com prehensive cost and benefit analyses relat ed to the issue of potential global warming. Because Imperial Oil can only do so mu ch with its own research an d technical per sonn el to contribut e t o th e compr eh en sive scientific inquiry needed to enhan ce th e environm ental knowl edge base. we see an ot her important ro le for U!-i: nam ely, to provide finan cial support to encoura ge an d n urture an expa nd ing niche of envir onm ent al resear ch in thi s countr~. I 5. "Utilize market forces to evoke the creative talents of the private sector." Imperial endorses the _Principle of using economic instruments, wherever possible, to harness market forces to help achieve environmental goals. It is our belief that this approach will unleash the full power of innovation, imagination and economic drives of the market. This will lead to solutions that, in most cases, will be more efficient and effective than the traditional "command and control" approach . . lenging environmental needs. At the individual level, it is ou; view that there are many opportunities to tap the imagination and enroll the participation of Canadian consumers. The tremendous success of "blue box" recycling of household waste is one splendid example. Funding for education and awarep.essprograms is vital to the task of informing many publics. 6. "Harmonize environmental legislation across the <;ountry to foster efficient and effective action. " Let's not "out-green" each other. There is a As an example, other jurisdictions, · need to enhance current intergovernmental such as the United States have experience partnerships to eliminate and prevent duplicain the use of emiss ions rights trading ar - tion and to ensure that · the environmental rangements, which could be invaluabl~o policy framework and operational mechanisms the developmen t of similar public pol- are efficient and effective. iurisdictional disicy in Canada . Now is the time to apply in - putes spawn uncertainty and lack of purpose novative appro aches to meet ever-more chal- and interfere with getting the job done. Environmental Challenges ollowing are four environm ental challeng es of particular con cern to Imp erial and to whi ch we can make the mo st meaningful contribution siderable improvement has been achieved in air quality as measured by Environment .Canada and provincial environmental agencies. However, many challenges remain and a numb er of initiat ives are underway. Those that relate mo st directly to our business in terms of th e polic y includ e: ,th e elim in ation of lead and the reduction of parti culates from trahsportation fuel s; reducti ons in emissions of nitrogen oxides (NOx) and volatile organic compounds (VOCs) to minimize lower atmosphere ozone formation ; elimination of chlorofluorocarbon s (CFCs) and lialons to mjnimize upper atmosph ere ozone depletion; and, reductions developm ent process . Our comments are focused on issues and considerations that we believe are important in developing publi c policy to meet these challenges. A. AIR QUALITY Canadians should be encouraged that con- 9 . 1<' auI" .·.~ (wli'ic:h being contemplated when gasoline worldwide to reduce capture and recycle hydro<'arhon vapours storage tanks an : fill<·d system) are gr<'enhousc•gas emissions that could lead to t 'l'h c approac hes used by climate c,umge. governmen t to develop goals ane1· H'Vt' ti1aI shown to cause respiratory ailments and agricultural damage, and steps to reduce ozone have already been taken. Engine exhaust standards for hydro- priority needs to be phuTd on irnpro iug the understanding of these lwalth and technil'al considerations prior to s<•tting targets for f ue 1composition. ln thi s rq?;ard, we strong.1y Ground-level Ozone and Urban Smog •l»om 111dnitrogen oxides have been tight- support Environnwnt Canada alH l J lca Ith "'1I"~~ -u.vapour pressures ha"e been d w , lf , 1}1e ~~rt:rr~'"'---~---__;;.,~ ·.::...::'=2..~a~n~~w~1e~a~r~e -~Canada effo rt s to asst'S~ . ' toxicological characteristics of a number of is "zero discharge". It remains a controver- substances on the "Priority Substances List" sial concept and we believe that in the under the Canadian Environmental Protec- absence of a proper definition of "zero dis- tion Act (CEP A)· These substances to be charge", public expectations may be raised tested include ,some components unduly, which will cause serious misunder- of diesel exhaust emissions. It may well be that this program is on the critical path in develop- standings between government, and society in general. ing supportable targets for diesel fuel composition and this warrants attention. While not unique to water quality, the problem centres on the constantly increasing 2. Toxicity of Transportation industry B. WATER capability of analytical chemists to identify and quantify smaller and smaller concentrations of trace substances. The parts per million capability of yesterday gives way to the parts per billion of today and the parts per trillion and quadrillion of tomorrow. What was considered a "zero discharge" yesterday is a cause for concern today. These constantly diminishing levels tend to be adopted as water quality limits, partly due to the difficulty of determining what, from scientific study, are the real toxic limits of the trace. substances. Considering that the cost to remove lower and lower concentrations of contaminants from water can rise exponentially with decreases in concentration of the substance removed, it is extremely important to ensure that specific environmental and health needs and toxic effects are factored into the process of setting effluent quality limits for trace contaminants. In this context, all of those interested and involved need to have the opportunity Imperial Oil agrees with the "Green Plan" statements regarding overall concerns with to be part of the debate on determining the ;eal meaning and applicability of the con- water quality, the improvement cept of "zero discharge"· Fuels Gasolines sold in Canada will be lead-free before the federal government's deadline of December l, 1990. With that issue behind us, attention is now turning to other components of gasoline su~h as benzene, other aromatics and fuel additives such .as manganese and potassium. We believe that a critical assessment of health-risk exposure for various fuels, including alternative fuels such as methanol blends, and their trace exhaust components should be conducted before significant changes to fuel composition are legislated on the basis of potential health impacts. Some of these considerations will be covered by the planned assessments associated with the "Priority Substances Lists" under CEPA, but others are not (e.g. formaldehyde) and this issue needs to be addressed. options included, the legislative measures mentioned and the encouragement of environmentally sound water management through the use of economic instruments. Another concept that is receiving increas- C. WASTE Imperial concurs with the "Green Plan" recommendation that ways be explored to contribute to a 50 percent reduction in waste. 1 1 .__ing_a_t_t~....,...1-·o_n_an_d_:_p_o_ss_i_h_le_ie~g~is_l_at_i_ve_a_ct_i_on __ Wi_e_ar_e_u_n_ce_r_ta_i_n_a_s_t_o_!___th_e_p_ra_c_t _·1i_· t_y_o_f__ __ _ _ __ _·c_ah_ 11 setting 50 percent as a specific target,.however, in principle, we believe_that the effort needs to be made toward attaining such a goal. While progress will be made throug h waste management strategies that focus on the three "R's" - reduce, recycle and reuse - we believe that th e oth er two "R 's" recover and retention - will continu e to have an important part to play. Wh en the options f~r redu cing , reusing and recycling have been exhau sted for specific wastes, incineration opport uniti es need to receive more attention. Modern incinerator designs ensur e compl ete combu stion and cleanup of the flue gases. ~y recoverin g the energy content of wastes, electri city can be generated or heat provided to neighbouring communities. Even with these steps ther e will be a continuing need for environmentall y safe waste disposal sites. Furthermor e, many of the sites that are currently in use are nearing capacity. Individual jurisdictions in Canada will need to quickly develop efficient environmental assessment and approval p~ocesses to meet this need. A word on plastics is important, as thi~ has become a significant environmental and waste managem~nt issue in Canada. As a major producer of polyethylene and polyvinyl chloride in Canada, Imperial believes that Canadians need to be better informed about the pros and cons of plastics in the envirc;>nment,since plasti~s can help to con- · tribute to waste management solutions. Plastics comprise about seven percent of municipalsolid waste whichcan ~e reduced by-~er packaging films, by reuse and ::MN.lead by aafelyincinerating and recap- hioh i equivalent to that concern is the potential development of legislation to limit the use of plastics without a full and informed public debate on the issue. Imperial is contributing to public understanding of the issue of plastics in the environment by supporting industry-wide public education initiatives, participating in recycling projects, fostering responsible product use and disposal and contributing to federal an d provincial government consultations. D. · POTE NTI AL CLIMATE CHANGE T he potentia l for climate change and global warming as a result of the buildup of carbon dioxide and other greenhouse gases in the atmosph ere is a serious and complex international issue. lmperial's Discussion Paper on Potent ial Global Wqrming (March 1990) calls for ur gent steps to improve scientific kno wledge to better define the problem and to guid e effective solutions and t.o assess th e costs and benefits of actions that could be tak en by Canada and the world. Imp erial has committed to its own sevenpoint work pro gram in 1990 to contribute to this knowl edge base . Instruments of Change uch of the pre- the setting of detailed performance stanceding has dealt . dards based on current technological capwith the ques- ability - potentially fails in many areas to tions of what address these concerns. Canada's enviNowhere is there a better example than in ronmental goals should be and how they should be determined. Imperial believes governments have the lead respon sibility to define the environmental quality society seeks an<. p11·pan ·d by Imp erial compound s (VO Cs). N Ox a n d Oi l Limi tl·d (" Tmp e- pre cur sors of ozon e (0:1) , a ria l" ) to con tribut e to Imperial p1tl1li(· 1111 dcr standing Canada 's CO 2 emi ssion s fr om f,, .1-; iJ f wl of k1·y environmen tal combustion and a lesse r share of t h 1: g 11:.1; 1dJ(J11 .,. contribut es about 2 1w1, 1-1il 1J11 i:il ., ,,[ 1,t h1·1 l, 111, ,11µ,, , l111·i11µ, ( :1111ada and Hound pub lic p11l1, ·, lo 11ld11·1,H1 tl H·Ht·. T lw paper is a ,·q 111 •I 111l111p1·11,d\, Marl'l1 1990 pu blication tory 11 l'1q wr 011 Potl·nt ial Globa l " \ I l r 111 111 which may be more larg er than previ,111-, Jy \\ ,11111 111µ," 1111d 11·1H11IH011work carr ied out 1,, I 111 p 1·1i ii ov1·1 1111 · paHI year to better believed . Also, the contribution of O ;; and its precursor gases, NOx and VOCs - to any enhanced greenhouse effect cou ld be significant and needs to be bett er und erstood . 1 1111dn l and t lw i111pl il'al io11Hof I he threa t of •l11lI ii ,, 11111iI ig a11dt Iu· rt:HponHe op t ions for I nq w1ial 111dC1111ada. It prnvidrn; a private ,,1·101 p1•1i,;p1·1·t1v1· 0111111 : iHH III! arid how one 1•u111p tit } 111i µ,lt1 lw 111,1, · to d,:al with it. 111tlw paHI y1·11r , Ca1111da a nd a numb er of otllt't ' i11d11 i,;lriali ,1, 1·d 1·01rntri,:HhaVl; c.; om mil - kd to tlw 1·i,;tal,li Hl11r11 ·11Iof nation al H1ra tegit· to Htul,ili,1,1·,·arl,011 dio xid,: (CO2 ) awl ~l't'l'llho1tH(· gaH(•rtiiHH iOIIHat I 'J90 levch, hy tit,· ·1·ar 2000. Th,· Hc goal Har<: ,:rnbodi ed in direct greenh~mse gas emissions. Th(; in v1:n· has highl ·ight ed th e nee d fo r improved understanding ;111 of CH 1 ernissi<,n s In terms of potential respon se opt ions for Impe rial and Canada, the compan y ha examined how it can best contribut e to resea rch efforts to resolve scientifi c un certainties . As a res ult, Imperial has emb~k ed on a numb er of new prografi1;Sthat addr e both the basic science of climate chang e and possi ble mitigat ive and adaptive strat egie . ( :a1111da 'H (; n·<·11Plan and Nat ion al J\<:tion Th e com pany has also conducted a comprehensive examinati on of the potential for St rnlt·g y 011Clolml Warmin g, 1:V1 :n thou gh furth er energy efficiency improvem ent to !-< 01111·!-< t'il·11tifi1· 11111 :,:rtaint i<;H rnmain and red 11cc CO 2 and other combustion-r elat ed li111it«·dprogrc HHha H b,:cn rna!J,: i11 greenhou se gas emissio n s in its operation s . 11rul1·r Hlaruling th<· H(H:io-,:co11omi,: irnpli1;a- Thi s HI 11dy showed that Imperial could tiom; of Hllt'h a commitrrwnt. achi eve a relatively modest 6 percent redu cAHa firHt Hlt•p in urul, ~rHlandirig I h,: :-;i1.,: t io11iII ot h1·rwit-wpr ojected CO2 emissions by of the ehallcng,~ for I rnp1:rial, Ih1· ,·om pan y I h,: y1·ar 2005 from en erg) efficiency in Yest haHcompleted an inventory of gr1·,·rd1011 :,;1· rrwnl :,;t liat al'lri«>v t· a fiw ear economi c pa~ ga11t mhu1iorn~reHulting from it:-;or11:rat i1111 H. ba, ·k al pn ·vaili11g t' n ergy prices. This is It includ s CO2 , m,~thanc: (C:11 1 ) , nit ro11H parll y a n ·fl(·l'lion orthe significant ener(Ty b. mud (Nz()) and chlorofluonwarbom1(CFCH) 1·f'f'i<-i1 ·1wy i1nprov1 nw nt s over the last two 11111 decad es which achieved a 28 percent redu c- and result in a 7 percent redu('tion in personal tion in otherwi se proj ected CO 2 emi ssion s. incomes by the year 2005. Serious regional di ·- Imp erial b elieves it is technically feasible to locations, particularly in Alberta, would result and int ernational competitiveness would be weakened if such a step was taken in isolation from Canada's major trading partners . Th ese st udi es re in force the need for Canada to car efull y desigri its strategy on global warmin g, t o ens ur e that it is scien tifi cally sound , compr eh ensive, cost· effec - dispo se of about 3.5 percent of Canada 's CO2 emissions into subt erranean formations at a cost of $15 to $50 per tonne of CO2 . Furth er studi es are und erway with the Alberta and Saskat chewan governments and other industrie s to confirm this outlook. Imperial and affiliated companies have carried out studies of the greenhouse gas emissions from various alternative transportation fuels, including methanol blends, compressed natural gas, liquified petroleum gas and electricity. These fuels offer somewhat limited potential to reduce - and in some cases actually increase - greenhouse gas emissions when "life-cycle" effects on CO2 and CH 4 emissions are considered. Electric vehicles promise lower overall emissions of greenhouse gases ti v~, regionall y sensitive, in te rn at ionally coordinat ed and flexibl e. , Such a strat egy will req uir e t he develop ment of a mor e ext~n sive and reliable data bas e of Canadian greenhou se gas emissions, including sour ces and p ot ential sinks . Addi tional resear ch fo cu sed on th e key sci entific gaps and on miti gative an d adap tive strategies is also importa nt in estab lishing a full range of opt ion s and their relat ive needs in the foreseeable future. Imperial commissioned ORI /McGraw Hill costs. A much impro ved und erst anding of the structural reason s for Can ada's energy intensity, and a realistic assessmen t of th e potential for energ y effi cien cy imp rove ments, are critical compon en ts in u~d erstanding the size of th e chall enge for Canada. An improved und erstandin g of th e complex interrelationships b etween global warming and other air qualit y issu es is required in order to design eff ective action to examine the macro-econo~c impacts on Canada of a number of potential policy measures - including gre6i, fuel, gas guzzler and carbon taxes - to reduce CO 2 emissions. The strategies. Finally, more definitiY e action s should be designed to sort out Canada 's broader environmental priorities in a way that balances the environmental and eco - study illustrated that it would be difficult and costly for Canada to stabilize CO 2 emis- nomic needs -of our societ y. For its part, Imperial is committ ed t o sions, requiring a carbon tax of about $200 making further contributions to sound pub- per tonne of carbon or $55 per tonne of CO2 . It indicated that such a tax would reduce lic policy on global warming and to und ertaking actions now that make sen se in th eir Canada's gross domestic product by $100 billion in real terms over the 1990 to 2005 period 9wn right. This will include widel y sharin g and other air contaminants, depending on how the electrioity is generated, but substantial engineering development will be required. Nonetheless, Imperial believes there will be increasing opportunities in the marketplace for alternative fuels, even though gasoline and diesel fuels will continue to play the major role in meeting Canada's transportation these findings, updating its inventor y ef , 7 greenhouse gas emissions, funding climate pursumg change research programs, enhancing implementing economic energy efficiency opportunities, CO 2 disposal opportunitie the technical an d and commer cial potential of alternative transportation fuel s. Introduction his discussion paper is and other greenhouse gas emissions at 1990 one in a series beil).g levels bv the Year 2000. ln ~ovember 1990. the Canadian Council of Ministers of Em -ironment (CCME) released a draft ·'~ational Action Strategy on Global ~ 'arming .. (national action strategy) designed to be a strategic framework for governments to develop and implement specific measures wit~in their jurisdiction, in consultati 'on ;with stakeholders, to meet this commitment. The elements of the national action strategy were embodied in Canada· s Green Plan of December 1990. prepared by Imp erial Oil Limit ed ("Imperial") to contribute to public und erstanding of key environmental challenges facing C.anada and sound public policy to address these. As a leading industrial company in Canada and a major producer of fossil fuels, petroleum products_ and petrochrmicms, Imperial has an importan~ stake and keen interest in fully participating in the search for realistic and costeffective solutions to these challenges. The paper is a sequel to Imperial's March 1990 publication "A Discussion Paper on Potential Global Warming" which addressed the threat of climate change in the context of energy use. It also included a commitment to assess-the implications of potential global warming for Imperial and Canada. In this second paper, Imperial reports on the results of these studies carried out over the past year. ( Since the March 1990 ·paper was pub: lished, there have been key developments on both the national and international level. At a U.N. conference in Bergen in May 1990, Canada made a cominitment, as a first step to limit emissions, to establish national strategies to stabilize carbon dioxide (CO 2 ) At the international level, the Intergovernmental Panel on Climate Change (IPCC) reported its finding's to the Second ~ 'orld Climate Conference in Genen in ~ovember 1990. The findings serYed to give additional emphasis to the development of an international framework convention on climate change. Negotiation for this convention began in February 1991 under the auspices of the U.N. with the objective of having a convention ready for signature at the 1992 U.N. Confere~ ce on Environment D~velopment. and As a backdrop to this quickening pace of in~tiat~ves by _Canada and other nations, the scientific debate on global warming continues and ther e appears to be emerging scientific consensus. A notable element is the position of the IPCC that increasing I I atmospheric conceptrations of CO 2 , an eye to reducing CO 2 emis ions; methane (CH 4 ), chlorofluorocarbons (CFCs) and nitrous oxide (1\2 0) will enhance the natural greenhouse effect and lead to higher global temperatures in the future . This could have significant impacts on agriculture, forests, fisheries and water resources and on low' lying coastal and island com I munities from changing sea levels . rhe scientists acknowledge, however, that uncertainties remain, particu larly with regard to the timing, magnitude and regional patterns of clima t e change . Nevertheless, many nations, including CJmada, are taking the view that the risks of waiting for furthe r research results before taking action to limit greenhouse gas emissions are too great . 3. Determine, in dialogue with governments and the scientific community, how its extensive research capabilities and facilities and external research programs can be utilized to address potential global warming. The primary context will be energy usage, considering both input and output implications; 4. Determine the technical and economic potent~al for CO2-"sinks," or mechanisms .to ~emove CO 2 from the atmosphere, such as underground injection into oil-bearing reservoirs to support enhanced oil recovery operations or into deep saline aquifers for disposal purposes; 5. Develop "life-cycle" assessments of greenhouse gas emissions for fossil fuels and their alternatives in various end uses; While these co~m itm ents ar e being made by governme n ts an d preca utionary 6 . Carry out a CC?mprehensi~e assessment steps are being planned, man y gaps re main of the technical and economic potential for in unders tandi ng both th e imp acts of an fue l switching with emphasis on the transincrease in global te mp eratur e and the socio- portation sector, including an assessment of economic consequ ences of pot ential strat e- t h e full range of environmental consegies to limit and adapt to thi s chang e. Nor qu ences; and , does Canada 's national action strat egy 7. Assess the macro -economic consequences clearl y defin e how th e nation could actuall y to Canada of opt ions being contemplated by achieve a gr eenhou se gas emis sions stabi- governm ent s to red uce CO emissions, such 2 lization targ et. ' as carbon or J uel taxes. Imp erial pr esents thi s second discussion This is no w sub stantia lly complete, pa p er on global warming within ·this evolv- . alth ough work to more fully satisfy the origing cont ext. Th e paper contains a summar y of work compl eted to date in conne ction with seven commitm ent areas outlined in th e original pap er. Th ese were to: inal commitm ent is still un derway in some ar eas, such as lt ern at ive fue ls. In other areas, follow-up action s are being taken or initiatives are being extended as described in 1. D evelop an invento~ y of gr ee nhous e gases that are emitted in Imp erial' s operations and identify feasible opportunities and costs to reduce these emi ssion s; accompan y thi s summ ary, and will be availabl e on requ est. 2. Determine the techni cal and econorpi c Effort s b y th e com pany over the past potential for additional opportunities later sections of th e pap er. Six background techni cal pap er s ar e ·bein g prepared to energy effici ency year have been ext ensive and have better in all of its operations , with defin ed th e-challenge Im peria l could face as 9 0 w1·IIas some potential response optjons for both lmpnial and Canada. The results will • l'O S I 1·ff1•l'I I VI ' i11 i lll i111t •1JI.ii io11:al ,•111t1 1·x1, ft'l'ognizirtg tlwt "\orru 111' ( .arr:td.i' ,, ,,1111, firnull'ial , lt'd11111l11 •y :i11d I 1111 w l,.,w help to fill in some of the major gaps Lhal st di n'main in understanding the size of the might w1•ll}1i1Vl ' 111011l1•v1•1:iv,1 drr 1t 11',I !Jltl task for Canada and Lhesocio-economic con- side its l,ord('n ;; • de signed in 1·0111 ·1·1I wit 11111 I,, r 11:il i1111 111 seq11ences of potential response options in appropriatel y ref'li-1'11lw 11:11111 , of ( .:111.id .1' limiting greenhouse gas emissions. lmperial's extensive work has focused on ccon~ 8 z z 0 f- z 6 emissions are about 3.4 percent rect gr eenhouse gases have been converted 0 4.2 _J _J ~ 4 to a CO 2 equivalent basis in Figure 1 and are di splayed in Figure 2 to permit 2.8 2.0 CH4 N20 _comp arisons. Conversion factors are based , on IPC C esti m ate/ but these are not precise. 0.3 CO2 relevant On thi s basis, Imperial's CFCs NO x voes CO 2 equivalent emi ssion s of direct greenhouse gases were 13.6 million t onnes in 1989. Of this totaL FIGURE 2 IMPERIAL'$ CO2 EQUIVALENT GREENHOUSE GAS EMISSIONS -1989 factors and numb er of individual sources ar 1: CO 2 mak es u p th e largest contribution at highly uncertain. Neither are data on total 10.5 million t onnes or 77 percent. Although Canadian emissions of CH 4 as well devel- emi ssions of CH 4 represent a lesser share at oped as they are for CO2 • Imp erial will be supporting planned work by the Canadian Petroleum Association to validate a number of CH 4 emission factors and to confirm emission sources in the production sector. Imperial's emissions of N 2 0 are also FIGURE 3 related t_o combustion of ,fossil fuels and IMPERIAL'S CO2 were about 1,000 tonnes in 1989 or about 1 EQUIVALENT percent of Canada's total. Canad;_'s N 2 0 EMISSIONS OFDIRECT GREENHOUSE GASES emiss~ons are also subject to conside.rahle uncertainty. BYREGION -1989 Imperial's emissions of CFCs, resulting from process losses in refrigeration and f1re suppression . systems and from laboratory solvent use, primarily in the refining sector, were relatively small at 15 tonnes i~ 1989. Imperial's emissions of indirect greenhouse gases, NOx and VOCs, are also shown 1 in Figure 1. In 1989, they were estimated at 28,000 and 64,000 tonnes respectively. Emissions of NOx result primarily from comBRITJSI-!' COLUMBIA3% bustion processes throughout Imperial's OTHER 2% operations and repr~sent about 1·5 percent 13.6x 1()6TONNES 12 of the national total. VOCs emissions also I 21 per cent , th ese are eq uivalent to about one quarter of Imp eria l's CO 2 'emissions. Imp erial 's CO 2 eq uivalent emissions of the indire ct gr ee nh ouse gases, 1 Ox and VOCs, were 6 .2 milli on tonnes in 1989 or ' about 46% of th e to tal dir ect greenhouse gas emissions. Whil e t~e act ual impact of these indirect gre enhou se gases on any enhanced greenhous e effect is h igh ly uncertain, the potential COI).tribution cou ld be significant. This highlights th e need t o develop a better · understanding of th e imp act of these indirect greenhous e ga ses on any enhanced greenhouse effe ct as an important step in establishing eff ecti ve na ti onal and international action strat egies . As shown in Fi gur e 3, 58 percent of Imperial's CO 2 equi valent emissions of direct greenhou se gases orig inate in Alberta and 24 percent in Ont ario, with much ' s~aller shares in oth er regions. The relatively high share in Alb ert a reflects the co,p· ~entration of Imperial 's pro du ction facilities m the provinc e. - J In terms of next steps, Imperial will widely share what it has learned in developing this preliminary inventory of greenhouse gas emissions and will continue to refine and periodically update the inventory in concert with steps ev_olving from Canada's national action strategy . Response Options for Imperial and Canada ith the knowledge of greenhouse gas emissions in hand, Imperial has begun to investigate some of the global warming response options available to both Imperial and Canada in more detail. The Many uncertainties remai_n and Canada's evolving response strategy needs · to be linked' to an improved understanding in Canada's Green Plan. As outlined m the next section of this paper, Imperial has examined ho~ it can best contr ibut e to the necessary research efforts. In ter~s of initial action, Imperial believes steps that mak e sense in their own right .are most appropriate, such as energy efficiency improvements that can achieve economic returns at least equivalent to the cost of capital. This allows simultaneous progress as 1,1ncertainties are reduced in global warming ·science and socio-economic impacts and as the negotiation of international protocols proceed. This strategy is also a cornerstone of Canada's current strategy as outlined in the Green Plan. Imperial's energy efficiency record and opportunities for the future are set out in a later section of this paper. And although opportunities· are limited, there is potential to reduce number of Imperial's combustion-related emissions of direct and indirect many areas. Areas of understanding include greenhouse gases including CO 2 , CH 4 , N 2 0 the fundamental physical, chemical and biological processes, the techniques to model and NOx. ' Other emission climate of already been initiated under national pro- These needs, and the grams that, in effect, serve multiple poli cy appropriate role for international and Canadian research programs, are addressed in objectives. For exa.mple, Canada has committed to elimina ·te the production and results to date have helped to define some initiatives that Imperial and Canada can sensibly act on now. Others should more appropriately remain held in abeyance until justified and coordinated with stakehglders in Canada and with other nations. The fundamental need for sound sc~ence in understanding the threat of climate change and designing approprjate mitigative and adaptive strategies cannot be overstated. change regional impacts. and the assessment a reduction steps hav e 13 .. . · .... - . . consumption of CFCs by 1997 and to sig- financial capacity to fund external programs. nificantly reduce NOx and VOCs under the CCME's October 1990 manageme nt pla n . These will also have some beneficial impacts on mi tigating an enhanced greenh ouse effect and t her efore nee d to be appropria te ly As a starting point, Imperial's researchers of government and the scientific community link ed to Canada's natio nal action strat egy who are involved in climate change research. on global warming. Of th ese program s, th e N Ox and VOC s management plan is th e mo_st signifi cant for, Imp erial. Imp erial estimat es that its emission s of VOCs will be reduced by 9 percent by 1993 und er "stage one" controls, However, extensive stak eholder consultations will be required on any extension s beyond "stag e one" to ensure that goals are well substantiated and the means to achieve th em are effective. Furth er, Imp erial believes that this must be don e as part of a mor e comprehensive approach to responding to multiple and interrelated air qualit y issues in Canada, as outlined in lmp erial's April 1991 Discussion Paper on companion paper, Air Quality." Beyond these initial steps that are economic in their own right, or already underway to serve well-substantiated multiple policy objectives, more far-reaching global warming response options require very careful study. Some of the dimensions to these options and their implications, such as CO2 disposal, alternative fuels and policy instruments that impact energy demand and the energy supply mix in Canada, are described in later sections of this paper. Thi s has helped to crystallize Imperial's perspective on whe r e the key uncertainties lie :·A RESEARCH Imperial has examined how it can best contribute to an improved understanding of climate change science by utilizing its extensive research capabilities and facilities as well as its 14 in Calgary and Sarnia have closely examined the IPCC scientific reports and have had extens ive discussions with representatives , withi n th e context of where Imperial can best cont ribu te. It is clear fhat major uncertaint ies rem ain with regard to the fundament al ph enomena assoc iated with climate chang e incl ud ing the physical, chemical and ·biolog ical processes involved and the compl ex int era ction s b etween the biosphere, geosph ere and hydrosphe r e of the planet. Much work also ne~ds to be done to design effective miti gati ve and adaptive options to respond to th e th reat of global warming and to defin e th eir r elat ive costs and benefits, Imp erial ha s uniqu e research capabilities in many areas that can contribute to solution s. For exampl e th e company's Calgary re search organiz atio n has leading expertise in proces s design for oil sands development which can contribut e to less energy intensive and mor e en erg y eff icien t recovery processes. In additi on , th e organization has uniqu e exp ertis e in som e elements of the Ar cti c environm en t, gain ed from many years of exploration and development in the north, which can con trib ute to an improved upderstanding of the im pli cations of potential climat e chan ge in th is particularly sensitive region. In th e company's Sarnia research organizati on , exper tise in automotive fu els and lubr ican t design can make important contribution s to m itigative measures such as vehi cle fu el efficiency and emissions redu ction. As a result of this review, Imperial has put a new emphasis on some important research programs currently underway and has embarked on a number of new pro- grams. The company is also in the process I of exami.r1ing its university research grant program - currently some $700,000 annually - to assess opportunities to selectively refocus funds on climate change research. In terms of the basic science, Imperial is _sponsoring a study of the recent geological past in an area of southern British Columbia · plans to apply its expertise and thaw settlement as part Imperial is also carrying research on sea ice dynamics on frost heave of this effort. out in-house and the fate of sea ice in a warmed earth scenario, in order to understand important variables in designing facilities for oil and gas production in the Arctic. As these research studies evolve, Imperial will remain alert to opportunities to extend these efforts in areas where the company can ,make a va~uable contribution. in an attempt to evaluate the natural climate variability in the Haloceiie period anct its ENERGY EFFICIENCY Imperial has completed a preliminary but impact on natural flora. This will contribute comprehensive assessment of energy effito the development of an historical analog to ciency opportunities in the facilities it oper- . what might be in store in the future. The ates, encompassing the production, refining company also plans to undertake a detailed and chemical sectors of its business. This study of the impact of global warming on study included a retrospective review of CH4 trapped in Arctic perm ,afrost in the energy efficiency progress since 1973 and a form of ice hydrates. At higher temperaprojection of potential improvements to the tures C~ 4 could be released, enhancing the year 2005. greenhouse effect. Attendant impacts on CO 2 emissions In terms of mitigative measures, work have been assessed, using the combustionis underway to examine innovative new .re lated emission factors described previprocesses to develop Canada's oil sands ously. These include impacts on both Imperesources, including bore-hole mining con- riaFs own CO 2 emissions and on emissions cepts and cold-water extraction of bitumen associated with power generation facilities from oil sands. These offer the potential to that supplf Imperial with electrical energy: Coal was assumed to be the marginal fuel reduce the energy intensity of bitumen recovery operations, thereby reducing CO2 source to generate this electrical energy. and other greenhouse gas emissions. The The associated CO 2 emissions fr.om these company is also contributing to a two year power generation facilities were not instudy by the Alberta Oil Sands Research and cluded in lmperial's inventory described Technology Authority to evaluate the poten- in an earlier section of this paper. Impacts of energy use on other combustion-related tial for underground disposal of CO2, Imperial's contribution to adaptive mea- greenhouse gas emissions such as CH 4 , N 20 sures includes plans for partial funding of a and NOx were not assessed for the purmajor study by the Canadian Climate Cen- poses of this study, although these would be tre of the impact of warming on the Macken- reduced as well through energy efficiency improvements. zie-Peace-Athabasca basin. The company 15 -~ --- - - STUDYSCENARIOS I FEATURES # TYPE - ACfUAL ACTUALENERGY USEHISTORY 1973-1989 A HISTO RICAL RES TATEDHISTORY WITHOUT ENERGY EFFICIENCY 1973-1989 B FUTU RE 1990-2005 NONEWENERGY EFFICIENCY IMPROVEMENTS -- ~ C FUTUR E ENERGY EFFICIENCY IMPROVEMENTS WITH5 YEARPAYOUT D FUTURE ENERGY EFFICIENCY IMPROVEMENTS WITHTECHNICAL FEASIBILITY - As shown in Figur e 4, one retrospective and thre e pro spective sc~narios were IMPERIAL'$ENERGY developed to describe the influence of energy EFFICIENCY HISTORY efficiency in Imperial's operations Qn assoANDOUTLOOK ciated CO2 emissions. Scenario A is a retrospective assessment of what Imperial's energy use and associated CO2 emissions would have been if no energy efficiency improvements had been made over the 1973 to 1989 period. This serves to indicate·.the important contribution that energy efficiency improvements have made to CO2 emission reductions, as a FIGURE 5 response to oil pric~ shocks in the 1970s HISTORICALCO2 and early 1980s. Scenario B presents a EMISSIONSFROM IMPERIAL '$ ENERGY prospective case in which n_o new energy efficiency improvements are implemented USE- 1973-1989 \ in Imperial's operations. Scenario C includes only those new energy efficiency improvemen lf:l,emp loying currently available tech. nol ogy, that achieve a simple five year econo m ic payback of increased capital and operatin g exp"enditures, through anticipated energy savin gs. Scenario D includes all technically feasible energy efficiency improv ement s · empl oyin g cur rently available technolog y, but with no eco nom ics test. All proj ection s are base d on Imperial' s views on curr entl y ava ilab le energy efficien cy technolog y an d assume minor real ' growth in crud e oil pri ces, n o alteration of electricit y pri cing stru ctur es, stable demand for petrol eum and chemi cal prod ucts, declining conventi onal crud e oil production, continued developm ent of ct u de bitumen production and increased natural gas production. The r etro sp ecti ve res ult s illustrated in Figur e 5 highlight th e im po rtant contribution that en erg y efficien cy improvement s in Imperial' s operation s have made in redu cing CO2 emis sion s over the 1973 to 1989 period. Thes e steps have con tributed to a 28 percent reduction in oth erwise proj ected CO2 emissions in 1989 , eq ui valent to 5.2 million tonnes per year. ~ 15 SCENARIO A UJ >- many of which will b e important CJ) UJ z Z Despite these sub stan tial reductions, CO2 emissions have ris en b y abo ut 49 per cent over this period for a nu mber of reasons, 10 2z ~-- .... 0 ACTUAL ....J ....J :!!: in th e future as well. Imp erial has experienc ed significant exp~nsion in all sectors of its business which has in creased its demand for energy. The energ y int en sity of lmperial 's crude oil produ ction op erations ha s increased with th e growing contribution of • 16 CO2'SAVINGS ' FROMENERG¥ EFFICI ENCY ~rude bitumen in its suppl y mix. The energy mtensity of conventional oil pro duction has also increased as ever larg er volu~es of water ~ . ·. are produ ced in conjun ction. with declining 4.3 oil volum es. Th e ,energ y int en sity of th e company's refining operations has in creas ed cc in order to handle h eavier crude oil feed<( 3.3 LLJ >...._ 3 stocks and to produ ce cleaner burning transCf) LLJ portation fuels. En ergy efficien cy savings, 2 2 although significant , were unable to offset ·~ 2 this growth in the scale and energy intensity 0 =:i . of the company's operations. ~ 1 Figure 6 looks to the future, showing the growth in CO2 emissions associated with energy use in lmperial's operations over the 1989 to 2005 period for the three prospective scenarios. Actual CO2 emissions in 1989, the base year, were estimated at 13.4' energy requirements and associat ed CO2 million, tonnes; this inoluding 10.5 million •emissions by up to 200,000 tonn es per year. tonnes from lmperial's operations and the Scenario C, ~hich includes thos e energy remainder from power generation sites of efficiency improvements with a five year payback, shows a growth in CO2 emission s others supplying electricity to Imperial. Scenario B, which does not include any of 3.3 million tonnes. This represents a 6 new energy efficiency improvements after percent reduction from scenario B emis 1989, shows a projected growth in CO2 emis- sions in the year 2005. This relativel y modest reduction is a reflection of the significant sions of 4.3 million tonnes, or 32 percent, over the period. This ·increase is driven pri- achievements over the last two decades and marily by the production sector based on an the more marginal nature of the remaining outlook of continued growth of more energy opportunities that can achieve a five year intensive crude bitumen in the supply mix. economic payback at current ener_:gyprices. Scenario D, which includes all technically To illustrate, the production process for conventional crude oil consumes the equiva- feasible improvements with current te chlent of about 3.5 percent of the energy con- nology, shows a growth in CO2 emissions of ' tent of the crude oil. This increases to 18.5 1.6 million ,tonnes. This represents a more percent for crude bitumen. Growth in CO2 substantive 16 percent req.uction from scenario B emissions in year 2005. This case emissions also takes place in the refining includes a number of cogeneration facilitie , sector as crude oil feedstocks are predicted to become heavier and more energy inten- which simultaneously produce useable heat l PRODUCTION D REFINING II CHEMICALS 2.1 _.J I sive to refine. Refining energy intensiW will and electricity. This is a more energy effi- also increase in order to produce cleaner cient process ~ince heat ~ormally lost in electrical generation is usefully employed in the production, refining or chemical process. However, in none of these scenarios is burning fuels. For example, new desulphurization facilities that will likely be required in Imperial's operations to meet future diesel fuel emission standards could increase CO2EMISSIONS GROWTH FROM IMPERIAL '$ ENERGY USEBYSECTOR 2005 vs 1989 the growth in CO 2 emissions resulting from 17 energy efficiency and energy intensity, the CO2REDUCTION (THOUSAND TONNES/YR IN 2005) CAPIT Al COSTS (MILLION-1990$) C-5 YEAR PAYOUT 977 70 0-TECHNICALLY FEASIBLE 2,751 STUDY SCENARIO latter being a reflection of the very structure · of the business structure of Canada's terms, the economy. This dis- tinction does not appear to be well understood by many Canadians tinue to categorize 830 when they con- themselves as energy wasters. The country can do itself a disserthe increasing energy intensity of Imperial's FilGURE 7 IMPERIAL'S COSTS FORENERGY EFFICIENCY IMPROVEMENTS 1990-2005 or in national operations offset. Figure 7 illustrates the capita l and oper- . vice by using misleading indicators, such as energy use per capita, as a rationale for taking initiatives to reduce enetgy use in ating cost in~reases and associated reduction Canada that are out of step with our trading in CO 2 emissions for scenalfios C and D. There is a wide spread in capital costs for partners. Further analysis and communica- projects that achieve a five year payback_ ($70 million) and those that are technically req~ired tions efforts at the to more national level are appropriately portray Canada's energy use. feasible but have longer payback periods ($830 million). Projects that r:night be judged "economically attractive" based on UNDERGROUND DISPOSAL OF CO2 In contrast to the indirect steps to reduc e normal business parameters would clearly be toward the low end of this cost range. CO 2 emissions The study shows that the remaining economically attractive potential for energy efficiency improvements in lmperial's opera- tions is modest at prevailing energy price levels and with current technology. To the extent that the results may be representative of other companies and industries, Canada energy efficiency, improvements Imperial in has also ex- amined direct steps to remove CO 2 from the atmosphere employing so-called CO2 "'k"I . l ar, t h e company lms sm s . n part1cu examined two options which arc highly rel evant to its business and unique expertise. The first of these i nvolvcs injc<"tion of CO2 into subterranean resC'rvoirs t'onluin- needs to be cautious when it comes to expec- ing oil and gas to enhance tations that energy efficiencies can signifi- the~e hydrocarbons. cantly r~duce future greenhouse gas emissi~ns in the industrial sector. straight Nonetheless, based on this study and a the n·covn) of The S<'<'Olld i rn oh t's disposal by injection of CO 2 into formations s11C'has Sitlim· dee_p subterranean :·:·k~ review of where it can best contribute to solu- aquifers. These options an·. 011ly where there are large, srngk tions, Imperial is committed to implementing sources of CO2 emissions whi('h <"allIH'mp · the remaining economic energy efficiency tured, processed opportunities. Accordingly the company will -.....--'--e giving new emphasis and priority to energy efficiency in its capital expenditure planning. lmperial's work has also highlighted the importance of making distinctions between sonable to inje('lion Wt'lls t lwl formations. focuses on CO 2 1·rnissio11 sources in Alberta whc·n· lh<·n· an· a oflarge coal-fired po111l O n a rc,1· distance This study atl.~ \ and pipclirll'd access subterranean --- 18 through f>OW('.f 1111111lwr gc•rwralio11fal'ilitit·s, j t,il:-:rnd:-production and refining plant:-;and tltht>rfertilizer and pdrodwmieal plants . As :.-htm n in Figure 8. CO."?. emissions from t hest' facilitie:.-are about 142,000 tonnes pn day about -t2 percent of ,\Iberia CO 2 emissio ns ~uid10 percent of the Canadian total. Imperial estimates that it would be technically feasible to deYelop, over a five to lO year period. the infrastructure to permanently dispose of up to 50,000 tonnes per day of CO2 . This repre ents about a third of the aggregate emissions from the larger point sources in Albe rta or about 3.5 percent of Canadian CO 2 emissions. Capital costs would be about $7.5 billion with annual operating costs of up to $225 million. The cost per tonne of CO2 disposed is shown in Figure 9. For the hydrocarbon recovery option, the n et cost could rang e beh\·een SIS and $50 per tonn e, depending on incremental recovery of hydro carbons to off et some of the disposal costs. For the _traight disposal option, net costs could range VOLUME (THOUSAND TONNES/DAY) SOURCE SHAREOF ALBERTA EMISSIONS(%) POWER GENERATION 97 29 OILSANDS 30 9 & PETROCHEMICALS FERTILIZER 15 4 TOTALPOINTSOURCES )42 42 ideI1tify enhanced oil recovery opportuni ties. This study, which could lead to CO 2 pilot demonstration projects, will benefit from the extensive engineering analysis carried out by Imperi~l in the early 1980s to examine the feasibility of a large scale CO 2 enhanced recovery project at the company's Judy Creek oil field , in northern Alberta. That concept was subsequently rejected and a hydrocarbon based enhanced recovery scheme was implemented, due primarily to th e high projected costs for a CO;i recovery scheme. Costs are likely to remain a problem in these current studies. FIGURE 8 POINTSOURCES OF CO2EMISSIONS IN ALBERTA between 335 and $45 per tonne of CO 2 . Irnperial's preliminary work shows that there are large net costs to society in the underground disposal of CO 2 which need to be carefully assessed and weighed with other re ponse options. In this regard, Imperial is currently participating in collaborative studies with other industries ALTERNATIVE TRANSPORTATION FUELS Canada's Green Plan advocate~ other direct steps to move towards less carbon-inten sive energy sources, including alternative transportation fuels that promise to reduce FIGURE 9 UNDERGROUND DISPOSAL COSTS FORCO2 and government agencies in Alberta and Saskatchewan that willmore definitively assess the costs and benefits of CO 2 disposal for specific projects. These studies will also identify areas . for joint technology development where this - UNITCOSTS ($/TONNE OFCO2) HYDROCARBON RECOVERY PROJECTS GROSS COST HYDROCARBON RECOVERY BENEFITS 65- 75 (25)-(50) is appropriate. Imperial is conducting a follow-up pro- gram in its own operations to identify imd evaluate the most attractive CO 2 injection projects as part of a larger program to NETCOST 15-50 STRAIGHT DISPOSAL NETCOST 35-45 - 19 ............................................... FIGURE 10 . CO2EQUIVALENT GREENHOUSE GAS EMISSIONS FROM ALTERNATIVE FUELS (PASSENGER CARS) ------------- greenhouse gas emissions and othe r air contaminants. However, Imperial and affiliated companies have jointly carried out stu dies cessing, distribution and final consumption in the vehicle. The result is a so-called "life. of various alternative transpo rta tion fu els and found that there are limited possibilities to reduce gr een house gas emi ssions by switching fuels. because it was comparative, emissions were no t calculated for all the fuel chain steps for all fu els. However, calculations were carried Th ese studi es involved th e examination of five alt ernati ves to gasoline and diesel fuel for motor vehicl es. Th ese were pur e rnethanql (MlOO), a bl end of 85 perc ent methanol and 15 per cent gasolin e (M85), compres sed natural gas (CNG) , liquifi ed petrol eum gas, (LPG) - larg ely propan e and electricity from batteri es or fuel cells. It is recognized that there is 1;1.need to includ e ethanol in future studies, since it represents another alternative that deserves analysis in a similar context. .Passenger cars and heavy trucks were examined and an extensiv e literature search and engineeripg analysis were required to develop rel~vant comparisons. Of part icular impo rtance in this analysis is t he need to conside r the em issions of greenho use gases - principally CO2 and CH4 - from all steps in th e fuel chain including origina l prod uctio n , transportat ion, pro- D • FUELPROCESS ING • COMPRESS . POWERGEN. • D CH4LOSTIN TRANS, COMBUST '. IN VEHICL E D TAILPIPECH4 EMISS. CH4 BURNED 2.0 18 C! 1.6 1.4 (/) <( 1.4 UJ z :J 1.2 0 (/) <( (!J I 20 0 I- 1.0 0.8 i== <( _J UJ 06 0.4 a: 02 0.0 cycle" ana lysis. In this particular study, out where. significant differences in emission s were expected in the fuel chain compar ed with gasoline or diesel. In th e r esult s that follow, comparative CO2 emi ssion s ar e in clude d for th~ fuel processing step and \or com bustion in the vehicle. For th e CN G alterna tive, CH 4 emissions , which have a hi gher heat trapping capa city than CO 2, were calculated for leaks in th e distribution system (a range from 0.1 percent to 1.0 p er cent) and losses out the vehicle tailpip e (1.4 percent ). CO 2 emis sions associat ed with burnin g fuel to compress CNG in th e distribut ion system and at the refu eling station s were also included. For the batt ery powered pa ssenger cars, there ar e no CO 2 emis sion s from th e vehicle; CO2 emissions from th e,power generat ion so~rce supplying electri cit y for recharging the bat teries were included. For pur poses of this study, e~ectricity was assum ed to be generated from a supply mix of 55 percent coal, 31 percent nuclear and renewables and 7 percent each for oil and nc\tural gas. This composition is repres entati ve of the average mix in the U.S. In Canada th e mix is some. what differe9-t with nucl ear and renewables (hydraulic) accounting for 76% of electricity generation. How ever, th is difference needs to be viewed in th e context of how any { increased electrical dema nd from the trans- UJ > ....... GASOLINE LPG • FUEL · ELEC TRIC (BATIERY) porGtationhn sector might b e supplied. d , ree o,use gas en;ussions were converte to a CO2 equival~nt basis. Emi ssions were calculated as a CO 2 equi valent per mile of 1111 v, liwli·lr:tvl'I , lo 1·111tl1l1· tlw n:Hulrs lo lw nor nurliz1·d 11ga111HI gm1olirlt' and dit:H1; ] fw:I a"l • FUE:L PROCEss1rJG COMPRESS . POWER GEN• 1lw 1111!-l<'. Tl,i Hn•q11in·d a d1·lail1•dw;s1:si;rnent of Vl'lii1 ·l1·1·1w1µ,y dfo·i1·rwy w,irrg the various f,wlH,11wl11di11µ, rlw 1111iq111 : c·ornhustion char1ll'lt'l'IHI ll'Hol 1·al'li f'tll'Iand an<'illary impacts or,Vt'hi1·l1·w1'igh1to ui·c·ornmo 1·q11ivalP11t gn·cnhouse gas emissions an· n·d111·l'dhy 20 percent for LPG, and 10 D CH4BURNED 18 u1ic:~f1~,~ 1 C! 1 6 1.6 011CO2-CH4 EO /ALEIICE (/) <( D CH4LOSTIN TRANS. COMBUST I VEHICLEO TAILPIPE CH4EMISS I4 _J UJ t2 12 a o 10 1.1 1.1 I- ~ 08 j:: S 06 UJ p<·m·nt for M85 and electric power, compan·d to motor gaso line. However CNG can n~suh in a LOpercent to 40 percent increase in CO2 equivalent greenhouse gas emissions primarily due to CH 4 losses fro~ the tailpipe and in the distribution system . While CO2 equivalent greenhouse gas emissions appear initially unfavourable compared to gasoline, it is important to note the degree of uncertainty that exists in determining the greenhouse effect equivalency of CH4 to CO2 and also the determination of distribution losses. Further, a significant reduction in tailpipe emissions might well be anticipated from the application of research and development efforts to optimize CNG combustion in vehicles. Figure 11 shows the results for heavy trucks. In this case, only the electric powered vehicle achieves a 10 percent reduction of CO2 equivalent greenhouse gas emissions compared to di~sel fuel. Greenhouse gas emissions from M85and LPG irn;rease by 10 percent, while those from CNG increase by 60 percent to 90 perce~t. . On balance, none of these fuels stands out as a clear winner or loser in terms of greenhouse gas emissions. Electric vehicles promise overall lower emissions of greenhouse gases, depending on how the electricity i,s generated, but substantial engi- er: 0.4 0.2 0.0 DIESEL M100 M85 "CNGLOW CNGHIGH FUEL- neering development is still required. Also, CNG vehicles will likely benefit from current technology efforts. Other factors, particularly the impacts of the fuels on air quality issues such as ozone and air toxics, are also important in considering the implications of the study. However, a quantitative assessment of these other air quality impacts was beyond the scope of this study. It should also be considered that the benefits associated with increased vehicle fuel efficiency developments in the future may far outweigh the advantages of switching fuels, in terms of both results and costs. The study only touched on some aspects of the complex interrelationships among fuel c~rnposition, combustion characteristics and emissions of greenhouse gases and other air contaminants. Some of these interrelationships ate further explored in Imperial's ' April 1991 companion paper "A Discussion Paper on Air Quality." Further, a major joint automobile /oil industry research program underway in the U.S. will provide an extensive quap.titative assessment of the impacts of a range of alternative transportation fuels and reformulated gasolines LPG ELECTRIC (FUELCELL) FIGURE 11' CO2EQUIVALENT GREENHOUSE GAS EMISSIONS FROM ALTERNATIVE FUELS (HEAVYTRUCKS) 21 --- on air qualit~. Tl11?f.t're5ult5 \\ill also be n:-n· uf.eful to Canada by helping to unravel the. complexitie$ and $Ort out priorities. There will be increasing opportunities for alternatiYe tran,;portation fuels to meet particular need in th e marketplace and their use will grow. Imperial b elieves, howeYer. that reform ulat ed version s of gasoline and diesei fuel will conti nu e to play th e major role in meeting Canada's transportation needs in the foreseeable futur e. meet such a commitment in the face of these "trends continue" forecasts would undoubtedly require major policy interventions to ~educe energy use and, in particular, fossil fuel combustion. Such steps would come with significant implicati~ns for personal lifestyle and, if done in isolation, would damage Canada's international competitiveness. As a consequence, costs and benefits of any such actions would need to be carefull y weighed, in concert with other nations, and the fuller implications on our POLICYMEASURES The final area of Imp erial's work effort dealt "ith pos ible policy measures to reduce CO2 emissions . Most "trend s continu<' projections ·for CO2 emissions in Canada, including those by Imperial, the National Energy Board and Energy Mines and Resources Canada show a continuing growth in fossil fuel conumption and hence imply increasing CO2 emissions. This is not surprising in the light of general expectations of continued long term economic and population growth with implications for both increased industrial output. and personal consumption and given the energy intensive nature of the major indusFIGURE 12 tries at the core of the Canadian economy. POLICY MEASURES Yet many nations, including Canada, have TOREDUCE CO2 committed to goals such as stabilization of EMISSIONS CO2 and other greenhouse gas emissions. To ORISTUDY RANGE POllCY MEASURE GREETAX(%) BOTIOM I MOTOR FUEL TAX{Ill-REAL) I \ 22 10 25 10 50 GASGUZZLER TAX(SIAUTO &$/YR-REAL) 5,000/500 CARBON TAX($/TONNE CARBON-REAL) TOP 50 20,000/2,000 200 societal values would need to be addressed. To better und erst and the costs and benefits of these policy options, Imperial commissioned ORI/McGraw Hill ("DRI"), a major economics consulting firm, to carry out an independent study of the overall implication s for the Canadian economy of four types of policy measures intended in various ways to reduce fossil fuel consumption and associated CO 2 emissions. These measur es are summarized in Figure 12. The first was a "green tax" on all consumption designed to reduce aggregate demand and economi~ activity, with some revenues us ed to fund non-fossil based energy developm ent. Two tax levels - 10 percent and 25 percent, applied in a manner similar to Canada 's new GST- were examined. The second was a higher motor fuel ta.'\'.on gasoline and diesel designed to reduce fuel consumption. Again, two tax levels - 10 cents and 50 cents per litr e (real) - were assessed. The third was a "gas guzzler" tax, designed to reduce the use of automobiles with lower fuel economy. Again, two tax levels were examined. The first included a $5,000 tax on the purchase of such automobiles and $500 per year in registration fees (real); th e second envisaged a $20,000 1 r year in fees . ..carbon ta'\. ·· 116 10() a: ·inv owrall reduc the 5\\itch to less ~ >--.... Cf) UJ z z 0 f- so z 0 ::J _J ~ me a5ures that 0 -· c "ngin g rel atiYe pr ice s (16) c· g ene rg: - me and fo ssil TRENDS 10% CONTINU E GREEN TAX . TI e ::tud :-- did n ot id en- 25% 10¢/L 50¢/L $5,000/AUTO$20.000/AUTO SSO/T $200,T GREEN MOTOR MOTOR GAS GAS CARBO N CARBON TAX FUEL FUEL GUZZLER GUZZ LER TAX TAX TAX TAX TAX TAX sions through thr ee prin cipal me chanism s. Fir st, energy con servation and in cr eased en erg y effi cien cy re sult from high er pri ces. cases. some of the :::fr om the tax measures - · in o in.-estments in none :::- suc h as nuclear - to ..s o: • e DRI stud, are shown - a substantial tax on Canadians and , given the continuing importan ce to the Canadian economy of energ y intensive industries , a serious drain on Canadian competitiv enes s. cc CO:. emissi ons . ;=. ·- Th ese higher energ y pri ces repr esent both · -=~-=:3 · ·erms of the effects of the - '"' · y measures on Canada·s CO 2 Second, fuel swit ching occurs as a result of high_er relative prices for more carboniferous fuels. For example , 7,200 megawatts of "\"ine new nuclear generating capa city are added · ~e modelled. including a refer- a utilities switch from coal. This is admit- ec:~a n.::-- om ·osm fuel combustion. CANADA'S CO2 EMISSIONS GROWTH 2005vs 1990 DRISTUDY tedly controversial, but if increased nuclear t o ' .ne policy measures con- capacity was not an option, the contribution e carbon tax of ""'200 per from other factors. and the economic costs, n or :.55per tonne of CO 2 would be higher. In addition, these higher relati,e prices result in a large negatiYe imp_act on the real output of the coal and crude oil ''mining" ~ per litre of uasoline) ....,5 per .. o - natural o-as. or °"10 per giga and r .: s in a 21 percent - or -·~'"'" to n - per year - reduction in the ,ear 2005. · f'.arbontax o ~- 2C per tonne of carbon cant reductions in CO 2 emis- sector. This has severe regional impacts: for exampl1:, mining output in Alberta is down 31 percent by the year 2000 and the unemployment rate is boosted from 5.5 to about 10.4 percent on aYerage. o,·er the 1990 to 2005 period. And third. lower economic growth results from higher energy· prices and 23 redu ced Canadian comp etiti veness . The overall cost to th e Canadian econom y ar e in ternationally coordinated. Th e D RI study is an example of the type of such a carbon tax policy would be a cumu- of compr eh ens ive analysis that Imperial lative reduction of about $100 billion (real) believes is vital to understanding the socio-e~o- in the gross domestic produ ct over th e 1990 nornic implication s of potential policy options, to 2005 period; average personal incom ~s would be 7% lower in real term s by 2005. It is possible that these costs could be miti- befor e th e actual choices are made. Much gated somewhat by self-actuated behavioural changes induced by increased understanding assess the impa cts of the various policy measures on the int ernati onal competitivenes of work remain s, however. For example, it was beyond the scope of the DRI study to fully and awareness . Ho.wever, it is unlikely that particular industrial sector s. Thjs will need to this would significant ly diminish the size of be a vital consideration in Canad a's national the challenge. These potentially large costs action strategy. Also , th e effect of various serve to reinforce the need for Canada to assumptions relating to th e use of increased carefully design its global warming strategy government revenu es, resulti ng from these and to ensur e that any actions Canada takes - policy measures, could be examin ed. l(ey Observations and Conclusions mperial's work on global war~- change, in the impa cts of an increase in ing over the past year has sig- ,global temperatuie and in th e socio-econificantly enhan ced th e com- nomi c consequences for Canada of potential pany 's unde,standing of th e strat egies to limit and adapt to this change challenges it could face. It has should it occur . Imperial believes these gaps also provided a new perspective requ ire urgent attention to ensure Canada's on the implications of a numb er evolving res'ponse strateg y is soun d and does of potential respo_nse options for both Imp e- not weak en the countr y' s abili ty to comrial and Canada. Imperial believes this work pete in the international mark etplace. can contribute to public understanding of • More specifically, lmp eri al's inventory the issue and to sound public policy to deal work indicates that th e compan y contributes with it. · about 2 percent of Canad a's emi ssions of The key observations and conclu sion s CO2 from fossil fuel combu sti on . Surpris·may be summarized as follows: ingly, based on this pr elimina ry assessment, • From lmperial's perspective , and ~eflect- Imp erial's emissions of CH are estimated 4 ing on the events over the past year, man y to be equivalent to one quar ter of its CO2 gaps still remain in the science of climat e emi~sions. The compan y's result s highlight 24 ----- ---- the need for further work by all sectors to more accurately define the contribution of other gases, including CH 4 , ~ 2 0 and 0 3 and the 0 3 precursor gases, NOx and VOCs to any enhanced greenhouse effect. • Imperial has identified where its technical expertise and financial capability can best con!ribute to global warming research. ~ew and ongoing internal and external research programs are underway in areas that span the ha ic science and point to possible mitigative and adaptive measures. • Energy efficiency programs in Imperial's operations since 1973 have resulted in a 28 percent reduction in otherwise projected CO2 emi sions in 1989, equal to a saving of ., 5.2 million tonnes per ye;'!r. energy pri<'es and ('lllTt'lltly mailalil(• IP('li nology, reinforn •s th(• IH't'd for Canada to be cautious in its cxpcrtatio11s for fu111n· economic energy efficiency i mprowrrw11 Is and relat ·cl CO2 emissions rc•ducLio11s trom the industrial sector. • Imperial believes it is technically fcasiblt' to dispose of about 3.5 percent of Canada's CO2 emissions into subterranean formations. This requires an investment of $7.5 billion and results in a net cost of $15 Lo$50 per tonne of CO2 . Further studies are underway with the Alberta and Saskatchewan governments to confirm these costs and benefits and to facilitate comparisons with oth~r potential response options . • Alternative transportation fuels offer somewhat limited potential to reduce - and in some cases actually increase - gr~enhouse gas emissions when "life-cycle" effects on CO 2 and CH 4 emissions are considered. However, there can_be benefits in reducing other emissions that impact air qua.lity. Imperial believes that there will be increasing opportunities for alternative fuels to meet particular needs in the marketplac e. • The DRI study, which focused on CO2 · / duces more environmentally friendly but emissions only, illustrates how difficult and ~nergy-intensive fuels. This illustrat~s the costly it would be for Canada to stabilize importance of an improved understandmg of these emissions. Such a step would require the distinctions between energy intensity major policy interventions, such as a carbon and energy efficiency at the national level, tax of about $200 per tonne of carbon or $55 per tonne of CO2 , to reduce energy use and in order to properly portray Canada's en~gy use. fossil fuel combustion. This would be a sig~ Future energy efficiency improvements in nificant cost to the Canadian economy, Imperial's operations that yield a five year reducing Canada's gross domestic product economic payback could result in a rela- by $100 billion in real terms over the 1990 tively modest 6 percent reduction in other- to 2005 period, and reducing personal wise projected CO 2 emissions by the year incomes by 7 percent in real terms by the 2005 while requiring an investment of $70 year 2005. Serious regional dislocations would result, particularly in Alberta. The million. This outlook, based on prevailing • Despite these significant ·energy efficiency related savings, Imperial\; CO 2 emissions have grown by 49 percent over the 1973 to 1989 period due to business expansion and increased energy intensity. Energy intensity will continue to increase in the future as crude bitumen contributes a growing share to Imperial's crude oil production, at the same--time as the refining sector proce ses heavier crude oil feedstocks and pro- I I I ~~_:__~--=--~~~~~~~~~~~~~~~ international competitiveness of the Cana- dian economy would also be weakened if such steps were taken in isolation. Therefore, Canada needs to carefully design its national aC'Lionstralq~y 011 glol,al war rning to i·n<;un· that it iH s('i('ll Lifical Iy so1111d, ""rn prdwn iw, rosl effed iv<', r('gio11ally !·wrn;itiw, int1•rnationally eoordi11,1tcda11d fkxihl,·. Recommendations and Commitments ased on what has -been is underway and believes it is essential to learned and its per- provide a benchmark for international nego- spective, Imperial of- tiations and tracking. fers the following for • Extending the work on CO 2 and other consideration by gov- greenhouse gas sources to include sinks in ernments, the private · order to better understand Canada's net sector and the aca- contribution to any enhanced greenhouse demic community. The company believes effect . This will also help to define a these recommendations will serve to extend broader set of mitigative options and 'their relative costs. • Refocusing some of Canada's extensive repearch on climate change modelling and forecasting with additional emphasis on a wider rang e of possible mitigatiye and adaptive strategies and on the basic physical, chemical and bilogical phenomena. This will need to be coordinated internationall y to Imperial recommends: • Establishment, in _consultation with key make effective use of limited resources and stakeholders, of a comprehensive set of guid- to define Canada's uniqu e contribution. ing principles, along the lines of those on page • Extending th e analysis and improving 10 of this document, in designing Canada's national and int ernationa l understanding National Action Strategy on Global Warming. of the structural reasons for Canada's rela- understanding and help define sound ~ction steps to respond to the threat of global warming. Canada's Green Plan and the National Action Strategy on Global Warming can provide the framework to encompass these initiatives: • Developing a more extensive and reliable data base of Canada's greenhouse gas emissions for each sector of the economy. This is tively high energy intensit y and of the realistic potential for energy · efficiency improv ements. critical in understanding the true significance of the various types of gases and their sources. Also, Imperial understands thlft • Improving under tanding of the complex interr elationship s between global warming and other air quality issues to facilitate both ----:---w'-o_r_k_t_o_d_e_fi_n_e_a_n....:~\v7't;,""':t:7":_:::,.ti_o_,,~~a"'~ m"" e--=~""'/c:io,d"'="-=~""~.:::.~:::.g.:.c~:..--, _ an under standing of the basic phenomena of 7 0 • cause and effect and the design of effective date its inventory of greenhouse gas emis- action strategies to addres sions and support the Canadian Petroleum I• these issues. Designing more definitive actions to sort out Canada's broader environmental Association and others in their efforts to prior- develop accurate and comprehensive inven- ities in a way that balances the environ- tories for the petroleum industr y and other sectors of the economy. mental and economic needs of our society. • Giving more emphasis to international considerations m designing Canada's ~ational Action Strategy and in developing Canada's negotiating position on a climate change convention. • Fund the climate change research program identified in this work effort and remain alert 'to new opportunities, including those in its university research grant programs. • Give.new emphasis and priority to energy • Giving consideration in Canada's action efficiency in its capital expenditure plan\ strategy to mechanisms that facilitate and . ning, ~ith the goal of implementing all ecoprovide credits for investments in and tech- nomic energy efficiency opportunities. nology transfer to other nations and -to • Pursue opportunities to inject CO 2 into inventory protocols that distinguish between underground formations to enhance hydrogreenhouse gas emissions associated with carbon recovery and continue to collabogoods produced for domestic consumption rate with other industries and governments and those ·which are exported. in studying other CO2 disposal options. I For its part, Imperial · is committed to • Continue its work on examining and . contributing to the best of its ability, to all enhanctng the technical and commercial of these areas. potential for alternative fuels .in the transportation sector. Imperial commits to: • Continue to play an active role in con• Widely share this discussion paper and the tributing to public understanding and sound public policy which addresses the threat of supporting material with other stakeholders. • Continue to refine and periodically up- climate change. References 1. Imperial Oil Li~ited, March 1990, A Discussion Paper on Potential Global Warming .. 2. Intergovernmental Panel on Climate Change; the IPCC Scientific Assessment of Climate Change (Cambridge University Press, New York, 1990). THE APPLICATION OF RESEARCH CAPABILITIES TO GLOBAL WARMING ISSUES April, I991 Imperial Oil IMPERIAL OIL LIMITED THE APPLICATION OF IMPERIAL'S RESEARCH CAPABILITIES TO GLOBAL WARMINGISSUES APRIL 1991 FOREWORD This have document been published one of a series researched comprehensive Discussion is work Paper in April on of background and written in on Global Warming Global Warming 1991. - 1 - papers support of a that more entitled Response Options", "A TABLE OF CONTENTS PAGE • • • • • • Executive Summary 3 Introduction Global Climate Imperial's Current 5 Change - The Uncertainties Research Research Capabilities 9 Contributions Research Opportunities Climate Change - Hydrologic 9 13 13 Systems Mitigation Opportunities Energy Efficiency and Alternative CO2 Sinks • 6 IOL Commitments Fuels 14 15 16 - 2 - EXECUTIVESUMMARY In March, global 1990, Imperial warming dialogue global that with Imperial' s governments warming a science, possible summary There the is effect scientific models of the can from an "to scientific be used energy findings paper commitment and research to on potential determine, in community, how address potential perspective. on the status opportunities This of for paper climate Imperial change and other company can support. little and a resources issues" provides a discussion included research activities published controversy the basic to uncertainties, is existence the to of greenhouse on the Great results from To reduce the science of climate emerging global change. focus a involved. extrapolation climate important of principles surrounds predict it the scientific uncertainty used over change. Imperial will warming science retain to be in government/industry help design university research research which As of sponsor and and implement The its the company or participate to scientific contribution, in several specific - 3 - the to assistance and adaptive refocus to knowledgeably internal mitigative program the contribute provide also major research monitor to best will grant addresses to a position panels strategies. part resources direction support climate to response of its change uncertainties. Imperial climate will change undertake, science INTRODUCTION In March, 1990, discussion a paper national The commitments determine, This the status opportunities (IPCC) was World of response views was tabled at Geneva enhance the natural in the agriculture, forest, coastal and However, report it that island is the political fisheries communities apparent science Panel from could and water 5 - Climate Change and report, scientists, The general tenor greenhouse and lead to have significant resources in Program international detailed and understanding - interest on sea energy support. Environmental from changing the an An IPCC scientific effect This can be used research and of the possible public concentrations future. and findings can of key Imperial's company of 1990. greenhouse seven from the number fall its resources science, Nations of a large of climate governments of to government global issues" Organization. increasing temperatures change in the one a summary United of research intergovernmental by the the that with growing Meteorological is dialogue activities to the formed as a contribution federal issue included provides published as its the warming climate reflecting report in paper change, climate by global and other in warming how Imperial's potential perspective. the paper community, 1988, global (Imperial) environmental discussion address Limited initiated growing "to scientific In on potential the change. on Oil discussion concerning to Imperial of the gases will higher global impacts on and on low lying level. chapters of global in climate the IPCC change and impacts Global evolvi ng and many uncertainti are still • •til Climate Change -- The Uncertainties of carbon dioxide (CO2) in th It is certain that the Concentration the beginning of the atmosphere has been increas i ng s i nee industrial and revolution, the burning of and ice measurements attributable fossil fuels. CO2 in record over temperature atmosphere the past were caused by elevated While there is greenhouse effect scientific climate • little concentrations and uncertainty the basic surrounds models used to predict Significant uncertainty, the sensitivity of the global and the mean sea-level rise, principles the not, in the of a natural involved, great of results There in temperature increase from is: of three, average to the with co2 • existence by a range direct the the warm periods change. use that has It the extrapolation climate on shown years. of over the land a trend shows that in based been has 160,000 controversy changes Further, the demonstrated been empirically however, to it analyses, core of concentration past and is relating increase in greenhouse gases. • Even greater uncertainty regarding regional climate impacts. • Uncertainty on the timing of the - 6 - expected 1· t c 1.ma e change. Uncertainty in forecast model future greenhouse projections human activities, emissions natural arises climate and from systems. from an inability population growth, incomplete understanding For instance, current energy rates to use and of the of releases of CO2 and methane (CH ) generated by human activities, represent 4 small percentages of the natural fluxes between the atmosphere, the ocean and terrestrial ocean circulation vegetation, current ecosystems. or chemistry, would enhance knowledge processes is exchange not of yet Thus small or in the life or mitigate oceanic and sufficient of greenhouse gases changes to between cycle the world of terrestrial greenhouse terrestrial account in the effect. biogeochemical quantitatively the atmosphere, for the the oceans and land vegetation. Major international the role of clouds because they scientific programs and oceans in current represent major To predict modellers. system, the sources effectively science must be are now underway climate to address and climate change of uncertainty for the climate the of climate based behaviour on both the observation and modelling. Clouds control has been learned knowledge cloud climate the in the concerning types will earth's the radiative past and heat few years, distribution be required to provide models. - budgets. significant improvement and properties adequate While much of in different representations in In th e case of oc e an res e arch, heat mediating rol e of heat transport and a ir -se a e n e rgy More important th a n r e quir e d th a t g a in phenomena. They magnitude or regional to develop climate change or limit climate Therefore, and It earth, of will is important between establish in require to of many important the change, certain timing, making the it impacts of options to policy changes It important adaptive strategies relative costs to fundamental understand that and cause achieves and internationally to due to natural that the the complex hydrosphere and effect, intended coordinated investigate 10 to of and effect. programs 25 year and human activity. research establish physical, understand geosphere better research to on the needed biosphere, strategy nationally environment focus sciences order a national also of contain to can we that f are dat a for climate assessments to the interdisciplinary is so models guides ~ If · ch a ng e , representations suitability biological interactions planet the on and be sought. current of future meaningful circulati mode l s , reliable o f the change. it chemical yet incidence difficult the capabi l ity. not ocean clim a t e of and approximate are global of pred i ct i on s i n their understanding flux es will v er i f i ca tion ad j ustab l e parameters better th e oc e an s , of c on f irm conf i dence uch a be a full directed range on mitigative of options and and their and benefits. - 8 - ........ 1mperial's Research capabilities rmperial's research in production. Refinery products, the from main Both subjects and geared and toward . 1 Ubricant ad n a fuel of fossil can and research perspec t' , . ac 1.vit1.es at the expertise in numerous be levered to fuel chemical research have this is processes both organizations energy Calgary enhance the energy petroleum t' 1.ve, are Sarnia facilities. fields related science of to climate change. Areas of specific terms of logistical seismic knowledge surveys support, and lubricants which alternative fuels sea can has education and research to support in a which to will opportunities Current The task physics researchers to Research of and dynamics, emission environ ment, in drilling and in fuels and programs, to response, and expertise testing. funded at Canadian climate examining change the external advanced Clearly, research at scientific those there research Thus, grant support climate in divergent change system to annually, $700,000 is universities uncertainties. university some selectively selected universities. major contributes it Arctic · d t o f ue 1 eff 1c1.ency · · ap p 1 ie be address be the p erma f ros t historically position Imperial ice and to Imperial now a need concern to assess research. contributions keeping current alternative Imperial such energy has is ·n place 1 areas a formidable at - 9 - its research as atmospheric challenge facilities. for the The pu rpose 1) to of monitoring contribute ed u cation to where company to adapt i ve strateg to p ubli c des i gn government/industry The Canadian effort centre federal agencies the is study warming is has entirely quite the the to Further, activities basin is Imperial has a research major tree native a significant developer capability because at high and line, could population in areas be - 10 - frost the global The basin a range of tundra zones, by lives in Canada and is terrain and warming. here, affected. heave of of thought north resources. as is affected presence northern such also region northern of be of the could next and scope elements it contains and The latitudes. forest that be the major study lifestyles to all t h ro u gh universities involved. region. Canada habitats) likely be t he on funded from will coo r dinated warming partially of the impact within and expansion. and contribute a of is covering of this greatest of the economic be focus delta most the mitigation initiating researchers Canada broad, (permafrost, alpine the and across contained features their Plan is This and human environments The basin within kno wl e dgeably impact the basin. Green government physical (CCC) investigate Mackenzie-Peace-Athabasca the b e st ia: public to and a ssistance t he be ab l e to science panels. Climate to pro vi· d e i mp l eme nt 3 ) to warming de v e lopm e nt to 2) and i es , and g l oba l po licy i· ate , appropr he l p · emerg ing the and Finally that , undergoes will continue to The company has and thaw settlement direct and is planning financial support As mentioned, one address scientific major a historical the impacts of of to end, a n e x a ct Imperia past the impact on natural Imperial circulation the in in during compared it is have dynamics not of area is that the temperature. worthwhile to best lack of Even in describe systems in study to so uth e rn of B.C. f or th e r e gi on in i ty a warmed the the i n t he with been the that the year, engineering the that the estimate the recent Researchers an attempt Ho l o c e n e period to and wi l l l arge ly de t e rmine The f ro m its may produce challenges. 11 - mechanisms into be open s hipping have not new hazards to for may in yet a ctive cons i de ration. how general dramat ic wa rming average mitigating taken Sea will year-round a more global - outp u t Beaufort and for adequately sea planet Arctic. predictions suggesting additional average li mate suggests However, validated, region one of which planet's variabil ice models possible. studies flora. sea periods Arctic fund spo n so r i ng a $30,000 paleoc operates longer selectively a nalog, is natural of in year in kind. to a spec i fic the evaluate per eff ec ts. l for reconstruct The fate the $50,000 pr e vi ou s cli mat e ch a ng e -on natural geological will is up to unc e rtainties, th e rang e of poss ib le To this contribute or work strategy an a log absence to be the been in the Further, navigation and Imperial's research can of ice understanding sea make earth scenario. The enable the prediction of of structures, exploration and development new insight and goal th of yearly into of an fate of sea would be the . 16 and to a in eventually permit to infrastructure new hydrocarbon climate improved ice conditions, ice facilities engineering provide a dynamics, warmed to contribution for resources' mechanisms and to with associated sea ice. In certain Arctic hydrated that regions, form. these for would of such a phenomenon. is methods for may further possibility Imperial determine committed to extracting costs, These vary the from methods. the Three need intensive water the to extraction extraction; efficiency technologies and is the application of high safety that temperature advantages. they all older being - 12 - less pursued. and pumping processing development compete sands hot energy deposits; cold water treatment energy address with and caustic promises The common feature require timing effective surface will this To achieve drilling under froth of cost are new from tar over reinforcing resources. mining of bitumen benefits more innovative currently a the suggested and possible strategies of Bore-hole extraction of hydrocarbon been in analysis scope development of has detailed potential implementation costs. it methane providing A a number offers and the technologies lower steam released, Canadian extraction to be contains scenario, warming. lower technology permafrost In a warmed Arctic hydrates mechanism deep input of cost these than new their predecessors sands either or in th by virtue of goal of these research more efficient use less gases. greenhouse Research proJ ' ects of of research related climate to mitigate the the change, -- to Together, they greenhouse radiate effect and latitudinal natural presence atmosphere revolution. and ozone; trace as a These they into principal about and than gases of on spatial greenhouse gas but is are that small concerned have been since co2 , CH4 , chloroflurocarbons, ~ 13 - total depending are human activity 1 to 2 percent of the is water vapour. impacts greenhouse and clouds. 80+ percent some variation scientists comprise and to atmospheric downward are water vapour gases, are gases to strategies. the concentrations result processes of greenhouse co2 is an important concentrations greenhouse of to effects. though effect, contribute subject at much lower -- from top ics systems heat typically ranging investigations adaptive greenhouse which exists, or effects of appropriate natural components Even opportunities Change - Hydrologic present extr ac t ive costs, the · produce c 1early will and materi' als energy emission the development With i's to reduce Opportunities A continuum Climate f e orm of energy need ed to process the t ar re quiring · · fewer raw mate rials. While the of the total relative to about the added the to our industri nitrous effect al ox i de . The critical the is concern e ffect unrestricted of because the atmosphere 1. n these gases 'pitation . preci predict that global temperature, . concentration. rise with increased trace gas Scientists know, systems land -- 1.· e. processes clouds and rainfall. climate physical states Energy is gas it attention. range is one of the deserves significant gasoline lowest fuels. automobile . moisture, understanding the climate of the water in all its impact of CO 2 and system. could major and be enhanced to and diesel powered of 30 to 50 percent t and emission s 2 development have the the co highest convenience tailored can a of fuels greatest factors fuel sources diesel road Since research New engines, better opportunities Fuels: and cost design through technology efficiency. the Alternative density, transportation gasoline and currently, emissions on the snow ) and a sector Canada, overall, emissions and temperature, U nderstanding to ...c hydrolog Opportunities transportation other a key of involving mechanisms that ( ice a better Consequently, Efficiency energy dis. tribution the feedback greenhouse Mitigation in govern way, cryosphere ocean, climate and qualitative a in atmosphere, -- various other least at t curren fuel of compositions greatly reduce all and exhaust utilization. to reduce reduce Similarly, friction and lubricant add to fuel co Vehicles emissions has been by th e Year - 14 - from 2 2010. individual estimated T otal to co 2 be in A p, emissions from overall such distance significant ethanol, propane research and and of investigation vehicle the fuels gas. enhanced of fuel fleet and efficiency such combustion areas for techniques mechanisms and and as methanol, Promising combustion formulation research fuels, and middle troposphere distribution the of case the with atmosphere and and role technologies to of trap underground of conventional fuels. in on the oxides ozone formation (NOx) emissions of ozone precursors climate response to to from the upper changes in ozone. alternative of the into suitable and special engine inject subterranean Imperial'& CO , tec 2 reservoirs. fuels, alternatives capture or nitrogen on the of gas reservoirs, di apoaal and with to needed movement development is explained is and on the one As improve natural are hydrocarbon alternative fueled to transportation compressed more potential to upon the emissions. addition, paid depend required alternative prediction, particulate As is also development, the pollutant the is of modelling, will driven. effort understanding In vehicles hnology the saline companion exists The key features - 15 - lubricants to remove co2 into must for be vehicles co2 from the depleted oil and aquifers. paper to attention on permanently of this the underground store strategy co2 are: in 1arge in 1) the short fossil-fuel oil burning underground of only utility must be Close reservoirs disposal can be recovered of ferti at hand; · in an and hea vy su itable 2) and part 3) enhanced (e .g. CO2 l izer considered; be can sources plants, e l ectrical facilities) upgrading cost term, point o f the r e co very oi l scheme. Imperial is contributing carried out by the Authority to evaluate Alberta. The study and the costs to the Alberta funding sands oil the potential will also of building of a two year stu dy being Research and Te chnology for underground co2 dispo sal .in examine the and operating best the availab needed l e te c hnology facilit i e s. IOL Commitments Imperial • is committed Retain to the internal warming resources science so government/industry design response • Participate government to that the are able we panels; i. nter nal and to provi'de the to contribute assistance i. v e and m't 1 igat ' best to deve lo pment; policy and implement global emerg i ng monitor public to knowledgeably to help following: adaptive strategies. as group part to of a coo r d inated · investigate Mackenzie-Peace-Athabaska basi' n. - 16 - the i ndustry, i mpact university, of warming on the • Sponsor a study southern B. variability c. in of in the an the att Haloc 1 Develop an fate sea of Undertake on methane • improved ice a detailed analysis hydrates Refocus the support scientific direction climate to o evaluate · period and the its of sea earth in an area of research - 17 - impact ice impact how they of Imperial's uncertainties. natural climate on natural dynamics and the of global warming scenario. of the determine change past t understanding a warmed warming. to emp in further geological t ene flora. • recent university which will contribute research addresses to grants major