CALGARY, Alberta, March 2 (UPI) — Major producers of Canada’s controversial oil sands have formed an alliance aimed at addressing environmental challenges.
Canada’s oil sands, the second largest reserve of oil after Saudi Arabia, are a mixture of sand, water, clay and bitumen that is extracted mostly via open-pit mining.
Critics say oil from oil sands, also called tar sands, creates more greenhouse gas emissions and is more toxic to the environment than conventional crude oil.
Canada’s Oil Sands Innovation Alliance, launched Thursday, said it will establish structures and processes through which oil sands producers and other stakeholders can work together for the benefit of the environment.
So far, 12 companies, accounting for 80 percent of oil sands production and including BP Canada, ConocoPhillips, Royal Dutch Shell PLC, Suncor Energy Inc. and Total S.A., have signed the COSIA charter.
“We have listened to Canadians and we know that our operations have an environmental impact and we have heard what you want our companies to do better,” said Steve Williams, president and chief executive officer-designate of Suncor, at the launch in Calgary.
“We believe environmental stewardship is a shared responsibility, whether on tailings, water, land or greenhouse gases. This is a recognition and genuine desire to do better.”
While the 12 companies will continue to compete “rigorously and vigorously” in all other areas, they will cooperate in the environmental arena to bring about collective improvement faster, under a legal framework, said Shell Canada Executive Vice President John Abbott.
Some environmental groups criticized the alliance’s lack of concrete goals, with the Financial Post quoting Greenpeace campaigner Keith Stewart as saying that “in the absence of any commitments to real reductions in pollution, with penalties for not meeting them, this is simply another example of ‘greenwash.'”
Ed Whittingham, executive director of Calgary think tank the Pembina Institute, a staunch critic of oil sands production, said he is “cautiously optimistic” about the new alliance, adding that “we’ll have to see what the targets look like.”
COSIA maintains that its focus won’t be on lobbying or media campaigns.
“COSIA is a science organization, run by scientists for scientists,” said COSIA CEO Dan Wicklum, adding that “we want to stick to our knitting, which is accelerate the pace of improvement around environmental performance.”
In signing the charter, the companies agreed to open their environmental research repositories to each other allowing for technology sharing.
WASHINGTON, March 2 (UPI) — U.S. President Barack Obama has it backward when he says the government is backing a billion-dollar oil subsidy, the American Petroleum Institute said.
Obama told an audience in New Hampshire that the oil industry was the recipient of $4 billion in subsidies backed by U.S. taxpayer dollars.
“Every time you go to the gas tank or fill up your gas tank, they’re making money. Every time,” the president said. “Now, does anyone really think that Congress should give them another $4 billion this year?”
But Jack Gerard, president and chief executive officer at trade group API, said the president had it wrong.
“The president has it backwards, our industry pays the government nearly $90 million dollars a day — the biggest contributor of government revenue than any other industry in the United States,” said Gerard.
U.S. lawmakers are sniping over domestic energy policies as gasoline prices in most U.S. markets move closer to $4 per gallon. Republican critics of the White House say Obama is blocking domestic energy production, which means higher oil prices.
Analysts, however, said tensions in the Middle East are likely contributors to escalating prices.
The White House states that U.S. dependence on foreign oil has gone down every year since Obama came into office in 2009. The president has said there “are no short-term silver bullets when it comes to gas prices.”
LONDON, March 2 (UPI) — Nuclear operators in the United Kingdom will have to put money aside to address waste costs in the country’s evolving energy strategy, a secretary said.
British Energy Secretary Edward Davey said polices that would ensure nuclear energy operators cover the cost of waste and decommissioning means the public won’t have to pay the price.
The government of British Prime Minister David Cameron sees nuclear power as a vital part of a balanced energy mix.
“It is secure, low carbon and will support thousands of jobs in construction and operation,” Davey said. “But there will be no subsidy, operators will be required to put money aside from Day One to meet future cleanup and waste costs and we intend to substantially increase operators’ third-party liabilities.”
Davey added London was committed to taking a lessons-learned approach to its nuclear legacy. Delays by the government in addressing nuclear liabilities and the military origins of early nuclear energy work meant nuclear power was more complex and expensive.
“This kind of short-sightedness cannot and will not be allowed to happen again,” said Davey. “We will not place a costly new millstone around the neck of future generations.”
BEIJING, March 2 (UPI) — The Chinese government said there are trillions of cubic feet of exploitable shale gas reserves in the country but it lacks the technology to explore it fully.
The Chinese Ministry of Land and Resources said there was an estimated 886 trillion cubic feet of natural gas deposits in onshore shale reserves.
“China is rich in shale-gas resources, which are suitable for scaled development,” the ministry said in a statement. “But the geological conditions are complex and our exploration technology, which lags behind advanced countries, requires innovation.”
The ministry said it discovered shale natural gas reserves in exploration blocks that could hold significant volumes of reserves. The country aims to start developing shale by 2015, though there are no commercial shale gas developments yet in China.
Beijing aims to add more natural gas to its energy mix in an effort to control pollution. Shale gas could play a dominant role by 2020 if reserve estimates meet expectations, the government said.
China Petroleum Corp. announced recently it landed a $900 million deal with U.S. energy company Devon to tap into shale natural gas reserves in the United States.
RIYADH, Saudi Arabia, March 2 (UPI) — Reports of an oil pipeline explosion in the Eastern Province of Saudi Arabia are a ruse perpetrated by Iran, a Saudi official said.
Iran’s state-funded broadcaster Press TV said there had been an explosion on an oil pipeline. Those reports are attributed to a spike in oil prices overnight.
A Saudi industry official told the Financial Times on condition of anonymity the report was a hoax meant to stir panic in the oil market.
“This report is completely false,” the official said. “(There’s been) no incident whatsoever.”
A decision by Iran to halt crude oil exports to British and French markets, though largely symbolic, helped push oil prices to 9-month highs. The Financial Times reported oil prices soared overnight to the highest levels since July 2008 when crude oil prices topped $147 per barrel.
Iran, the Financial Times said, views Riyadh’s moves to offer more crude on the market as a form of economic warfare. Saudi Arabia had said it would supply more oil to some countries that have decided to lower imports of Iranian crude.
“In the oil market, they are competitors, and in the context of Iran’s nuclear crisis (Riyadh and Tehran) are regional rivals,” Michael Wittner, oil analyst at Societe Generale, told the Financial Times.
PARIS, March 2 (UPI) — Delegates from the International Energy Agency said they received strong support from the Iraqi government for a study examining its energy sector.
IEA delegates returned to Paris following a two-day visit with Iraqi officials in Baghdad. The agency had announced plans took take a comprehensive look at Iraq as part of its World Energy Outlook for 2012 and received strong backing for the report from Iraqi officials.
“The strong support received and working relationships established will be instrumental towards the IEA’s work on an in-depth outlook for the Iraq’s energy sector,” the agency said in a statement.
The IEA in December estimated crude oil production from Iraq was on pace to reach an average of 4.36 million bpd by 2016. The report, however, warned political instability could dampen oil expectations in Iraq now that U.S. military forces have formally ended their mission there.
In May, Iraq is expected to put around a dozen oil and natural gas blocks up for auction in its fourth licensing round. Iraq has yet to pass comprehensive legislation that would regulate the energy sector, however, leaving many investors wary.
The Iraq study is to be published in October. It will be included in the full energy outlook set for a November release.
BRUSSELS, March 2 (UPI) — A key European Parliament committee this week approved a measure allowing the EU to withhold carbon emission permits to prop up their market prices.
The EP’s Industry, Research and Energy Committee Tuesday approved a draft EU directive that authorizes the European Commission to intervene in the open market for carbon allowances sold under the EU’s emissions trading scheme, beginning with its 2013-20 phase.
The changes to the EU’s Energy Efficiency Directive call for a “necessary amount of allowances” to be removed from the market to strengthen their languishing open-market price.
Backers hail it as a way to cope with a saturated market for the credits brought on by the economic slowdown and other factors, resulting in an oversupply estimated at between 500 million and 1.4 billion. Prices for the allowances have dropped from a peak of $40 per ton of carbon equivalent in 2008 to $9 per ton.
The idea behind the EU allowances is to encourage European industry to use energy more efficiently and save money through the installation of new technology to cut carbon emissions. But the price is too low to act as a motivator to spur costly long-term investments in green energy technologies, analysts say.
Industries that have purchased and stockpiled the EUAs, however, vehemently oppose intervening in the market, saying it amounts to “moving the goalposts” after they’ve already made investments under the trading scheme.
Poland also opposed any form of EUA set-aside because strengthening carbon prices could hurt its coal-dependent economy.
The EP committee, however, turned aside those concerns, passing the set-asides as part of a larger package of changes that authorize the European Commission to seek binding national energy efficiency targets and save energy by specific means such as renovating public buildings.
That way, the demand for the EUAs will rise, asserted Claude Turmes, a Greens/EFA member of Parliament from Luxembourg.
“This vote is a major sign that Parliament, with a majority including most political parties, takes rising energy costs and energy poverty seriously,” he said. “Energy efficiency offers possibilities for job creation — notably in the building sector.
“Now governments have a choice: protect citizens against energy poverty and create many job opportunities or allow big energy companies to make ever-increasing profits.”
For the set-aside plan to become law, the commission must make a formal proposal to withhold the permits and persuade a majority of the EU council of 27 environment ministers to go along with it, followed by a vote of the full European Parliament.
Denmark, which holds the council’s rotating presidency, has vowed to support the energy efficiency measures before its term runs out in July. But whether the EUA set-asides will be included in its agenda unclear, The Guardian reported.
In addition to the Poland-led opposition in the Council of Europe, the commission itself is divided on the issue, the newspaper said, with Climate Commissioner Connie Hedegaard in favor but Industry Commissioner Antonio Tajani opposed.
“The pricing of allowances should be left to the market,” Tajani said Tuesday. “Prices would recover by themselves as soon as the economy were to pick up.”