Sector Briefing: Oil Sands: exposure to energy and carbon costs
28 July 2008
Please enter your login details on the right hand side of this page to download the report.
Canadian regulations set targets to reduce the carbon intensity of production at oil sands facilities.
Despite carbon costs, oil sands developments will remain profitable and rapid expansion is likely to continue.
Carbon is a proxy for energy use in projects, and operating costs from fuel consumption are spiralling.
Oil & gas companies with carbon-intensive oil sands projects could face higher energy and carbon costs than sector peers.
Trucost identified projects with high and rising carbon intensity, which are more exposed to energy and carbon costs.
The carbon intensity of the extraction projects analysed ranges from 9 kg of CO2e/barrel of oil to 106 kg CO2e/bbl.
Syncrude’s oil sands project in Alberta is becoming increasingly carbon intensive, while its energy efficiency has deteriorated.
Two Royal Dutch Shell oil sands projects analysed have relatively low or declining exposure to energy and carbon costs.
The booming oil sands industry is fuelling sharp rises in energy use and greenhouse gas emissions – among the main financial risks faced by the industry. Much of the vast amount of money being poured into oil sands development is covering rising production costs. Fuel costs are one of the industry’s major operating costs. Burning large amounts of natural gas and other fossil fuels drives the energy and carbon intensity of the oil sands industry.
Why did Trucost carry out the research?
Oil sand projects vary widely in their energy efficiency and in turn, their carbon intensity. Trucost’s analysis of eight projects reveals a range in carbon emissions per unit of production. Findings reflect the strong correlation between the energy and carbon intensity of different projects. Using carbon efficiency as a proxy for energy efficiency, Trucost can help investors understand which projects are most exposed to related operating costs.
Report image: Oil sand projects by carbon intensity