Complying with the Kyoto Protocol on Climate Change would "trigger a migration of capital investment out of Canada," said Murray Smith, Alberta minister of energy, in a keynote speech late last month to the International Pipeline Conference in Calgary.
Canada's energy production—and all the associated economic benefits—would fall.
Under President George W. Bush, the US has chosen not to ratify the Kyoto treaty because Bush claims it would cost millions of American their jobs. That stance has "heavy implications for Canada's competitiveness with (its) No. 1 trading partner," said Smith.
Australia also has decided not to ratify for the same reason: the threat to its competitive stance vis-à-vis its major competing national economies.
Smith noted that countries such as Mexico and Venezuela, not bound by Kyoto, would take up the slack to boost their exports to the US. "In return for the economic hardship (for Canadians), there would not be a single molecule of overall reduction in carbon dioxide emissions. The emissions would simply take place south of the border."
Canadian alternative
Smith advanced what he called a "made-in-Canada" alternative to Kyoto, a plan based on a model worked out in Alberta in which government and industry have worked together: Alberta's Plan for Action on Climate Change (OGJ Online, Sept. 19, 2002).
The plan, which is consistent with the approach taken by the US, would allow Canadians to keep their economy growing. "You need investment, wealth, and technical excellence to solve environmental issues," he said. "You do not impoverish your way to a clean environment."
The Canadian alternative calls for cutting "emissions intensity," or the ratio of emissions per unit of economic output, said Smith.
"A policy based on emissions intensity allows you to keep growing your company, to keep opening new plants, to keep driving your economy forward, as long as your activities grow steadily more efficient," he said.
Alberta's alternative proposes a 50% reduction in emissions intensity from 1990 levels by 2020.
"This is a proven approach: From 1990 through 2000, Alberta cut its CO2 emissions intensity by about 14%," said Smith.
Through the Institute for Energy and Environmental Policy, the Albertan government supports new technologies that emphasize cleaner performance in development, processing, and transport of energy.
Alberta companies, institutions, and governments are increasing sulfur-recovery rates at gas plants, have reduced flaring at oil and gas wells, and have toughened emissions standards on new, coal-fired electricity plants, Smith said.
Key to Alberta's plan, he said, is carbon management: capturing and using CO2 for resource development, plus storing it in geological formations.
Initiatives are under way that will "develop a commercial market for CO2 in enhanced oil recovery, support these projects by developing the provincial geoscience base for CO2 storage, and further reduce the energy intensity of oil sands production and upgrading.
Smith said the future includes Alberta's cutting the costs of capturing CO2, in part by developing a suitable economic, fiscal, and regulatory framework; injecting CO2 into mature reservoirs to increase reserves and production at some of Alberta's oldest and biggest oil fields; and, over the long term, using CO2 to recover coalbed methane and enhance natural gas production.
