The Wind and the Sands
Our Canadian neighbors have supplied important quantities of oil and gas to the US for many years. Much of Canada's oil production is from fields in Alberta that have been producing for decades. This production is declining, but overall Canadian production is growing as a result of exploiting non-conventional hydrocarbons from "oil sands", formerly called "tar sands." (See my posting of 9/23/04.) In fact, some estimates of Canada's oil reserves now count all these oil sands deposits, which increase the total from a mere 5 billion barrels to 179 billion, exceeding all others except Saudi Arabia. There's just one problem with this addition, and it is the Kyoto Protocol on Climate Change.
When Russia ratified the Kyoto Treaty last November, it went into force and activated Canada's Kyoto commitment to reduce its emissions of carbon dioxide and the other covered greenhouse gases by 6%, compared to 1990. All things being equal, this would effectively rule out the development of most of the oil sands reserves, because of the way they are produced.
The hydrocarbons in Canada's oil sands are tied up in the source minerals in such a way that you can't simply drill into an underground deposit and produce it as you would conventional petroleum. Instead, the oil sands must either be mined for surface processing, or processed "in situ", in the ground. Heat is used to drive the oil out of the sand, and generating that heat consumes either natural gas or the residue of previously extracted oil sands liquids. Both methods emit carbon dioxide, the main greenhouse gas implicated in climate change. Once the liquid is extracted from the sands, it is similar to a very heavy crude oil, requiring further processing to create a "synthetic crude" that can be shipped in pipelines and sold alongside Canada's conventional oil production. This extra processing generates additional greenhouse gases, excluding the emissions that will occur later, when the oil is refined and the resulting petroleum products consumed.
So aside from the large investment costs that I've discussed in past blogs, oil sands development imposes a significant cost on Canada's national greenhouse gas emissions "budget." In order to neutralize the impact and remove this barrier to large-scale oil sands production, the companies that own the rights to develop this resource will have to acquire offsetting emissions reductions. One way to do this is by investing in projects such as this wind farm.
You can choose to regard the greenhouse gas emissions associated with oil sands production as an enormous problem for the global environment. The alternative is to recognize the tremendous opportunity this creates for renewable energy developers around the world, mirroring the kind of positive industry/environmental partnership I talked about yesterday.