Rhein on Energy and Climate

Oil reserves from tar sands in Canada and Venezuela are equal to the world`s total known conventional fossil oil reserves. But the production process is extremely damaging to the environment; and it causes at least 20 percent higher C02 emissions than conventional oil. That is why oil production from tar sands has always been highly controversial, splitting energy and environmental interest groups.

Canada depends for almost half of its oil consumption on tar sands; this is also one reason for its unsustainable green house gas emissions.

By proposing to include tar sand oil in the revised fuel quality directive and attributing it a 23 percent higher GHG emission value than that of conventional oil the EU Commission has filled environmental groups with joy while angering Canadian and European oil companies like Total and Royal Dutch.

There is no reason for short-term concerns. The EU hardly imports any tar sand oil. Canadian tar sand oil exports to the USA, the principal market, will not be affected by a stricter EU fuel quality directive, which is likely to be adopted in 2012 after some controversial debates in the Council and the EP.

Nor should there be any long-term concern. The time will come, in the second half of the century, when conventional fossil fuels will be depleted or prohibitively expensive.

By then the price of gasoline will have become sufficiently costly for the transport sector to completely switch to electric engines driven by hydro, wind or solar power. The huge reserves of tar sands may, indeed, never be fully exploited because of high production costs, excessive environmental damage and alternative energy sources.

In conclusion, the Commission may have sent a helpful signal to those considering tar sands in Canada or Venezuela as the last resort of the global oil supply. But is worthwhile wasting so much bureaucratic and political energy on an initiative that seems to have little relevance for the European energy and climate policy in the next 20 years?

 

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Comments

  1. Thanks Ebehard for this interesting and timely blog post.

    The oil sand piece coincides with an article today in the FAZ on the importance of the Canadian fossil energy sector. Oil sands are only one, not even the major factor contributing to the rising share of energy in the GDP (8 per cent in 2020) Natural gas and conventional oil in old wells are at least as important. Production of oil from tar sands is less than 2 mio barrels today, i.e. less than 2 per cent of global oil production. This to put matters in perspective.

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