How U.S. Protectionism And Elevated Greenhouse Gas Emissions Will Impact Demand For Oil From The Alberta Oil Sands (And How To Fight Back)

Blake, Cassels & Graydon LLP


Blake, Cassels & Graydon LLP (Blakes) is one of Canada's top business law firms, serving a diverse national and international client base. Our integrated office network provides clients with access to the Firm's full spectrum of capabilities in virtually every area of business law.
Canada is blessed with extensive natural resources, including Alberta's vast oil sands reserves. The recoverable oil from the Alberta oil sands is estimated at 170-173 billion barrels, making Alberta's recoverable reserves second only to Saudi Arabia's.
Canada Energy and Natural Resources
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Copyright 2009, Blake, Cassels & Graydon LLP


Canada is blessed with extensive natural resources, including Alberta's vast oil sands reserves. The recoverable oil from the Alberta oil sands is estimated at 170-173 billion barrels, making Alberta's recoverable reserves second only to Saudi Arabia's1. The U.S. imports more oil from Canada than any other nation (approximately 2.512 million barrels of oil per day)2. As such, any changes that affect U.S. demand for Canadian oil, including oil sands oil, will have a dramatic effect on Canada's oil and gas industry.

This paper will address two recent U.S. enactments, the Energy Independence and Security Act3 ("EISA"), and the California Low Carbon Fuel Standard, together with the recently proposed American Clean Energy and Security Act of 20094 ("Clean Energy Act"). All of these enactments include constraints over greenhouse gas emissions, some of which are openly manifested as protectionist trade issues. If left unchallenged, these enactments will lead to decreased demand for oil sands oil. This paper will review means of challenging these enactments in the context of both protectionist trade measures and the uncertainty surrounding their use of the term 'life cycle' when referring to GHG emissions.

Section 526 of the EISA

The EISA was signed into law by President Bush in December 2007. Section 526 of the EISA is of particular interest to Canadian oil producers and continues to garner attention from U.S. legislators and the North American energy industry more than a year after it was passed. Section 526 of the EISA prohibits U.S. federal agencies from entering into any contract for the procurement of an alternative or synthetic fuel, including fuel produced from non-conventional petroleum sources, unless the contract specifies that the life cycle greenhouse gas (GHG) emissions associated with such fuel are less than or equal to emissions from conventional petroleum resources.

Considerable discussion and debate with respect to the interpretation and application of section 526 had arisen both in Canada and the U.S. since the EISA became law. The drafters of the EISA have stated that section 526 was originally intended to prevent the U.S. Air Force from procuring coal-to-liquid fuels, which are estimated to produce almost double the GHG emissions of conventional fuels. Likewise, the Government of Canada has taken the position that a narrow interpretation of section 526 ought to be adopted (so as to exclude oil sands oil), and has also supported the position that oil sands oil is not non-conventional petroleum, but rather part of mainstream oil production.5

Despite this original intent, the wording of section 526 is of concern to oil sands producers. Notwithstanding the position of the Canadian government, oil sands oil is often characterized, and referred to, as non-conventional petroleum.

While section 526 may not have been aimed specifically at oil sands oil, such production may be caught by the wording of section 526. Mr. Henry Waxman, the current chair of the U.S. Congress' House Committee on Energy and Commerce and one of the drafters of section 526, has stated that oil sands oil is one of the fuels he would like to ban under section 526 as "the development and expanded use of these fuels could significantly exacerbate global warming".6 Even rhetoric from the proponents that were initially in favour of a restrictive interpretation of section 526 has changed in recent months. Many now acknowledge that "Section 526 of the (EISA) serves to prevent the Department of Defense from purchasing fuel from the Canadian Tar Sands where there is an estimated 180 billion barrels of oil."7

After it was enacted, several U.S. congressmen and senators voiced their concern regarding the potential impact that section 526 could have on the availability of a proximate, secure fuel supply. In March 2008, Texas Congressmen Jeb Hensarling and Mike Conway introduced legislation to repeal section 526, stating that "though short, this section – which raises concerns over national security, economic security and bureaucratic uncertainty – has powerful and harmful implications and needs to be repealed immediately." This legislation, and identical legislation introduced in the House of Representatives in April 2008 by Senator James Inhofe of Oklahoma, failed to make it past their respective second readings in the House and the Senate.

In May 2008, an amendment to section 526 was included in the 2009 Defense Authorization Bill (Defense Bill) passed by the House of Representatives. This amendment would have enabled U.S. federal agencies, including the U.S. military, to purchase blended fuels containing non-conventional petroleum that are generally available in the marketplace. Since oil sands oil is not segregated from other petroleum within the supply chain, the amendment would essentially have made oil sands oil available for use by all federal agencies. The amendment was not included in the Defense Bill that was signed into law by President Bush on October 14, 2008.

More recently, in January 2009, two attempts were made to repeal section 526. The first attempt was made by Republican Congressman Phil Gringey of Georgia, who attempted to include a repeal of Section 526 in the House version of the economic recovery package. This amendment was not included in the version of the bill passed by the House. The second attempt was made by Republican Senator James Inhofe, who re-introduced his April 2008 legislation into the House of Representatives on January 21, 2009. Mr. Inhofe's legislation is currently under review by the Committee on Energy and Natural Resources. Given the current republican minority in both the Senate and the House of Representatives, and given the current focus of the Obama administration, it seems unlikely that Mr. Inhofe's re-introduced legislation will fare better in the current political climate than it did in April 2008. There has been talk that Mr. Inhofe may also attempt to include a repeal of section 526 in this year's 2010 Defense Authorization Bill.

Business executives in the U.S. have also spoken out against section 526. A report issued by the U.S. Chamber of Commerce in November 2008, titled "A Transition Plan for Securing America's Energy Future"8, specifically includes oil sands oil in its proposal for supplying America's future energy needs. The report urges the President and Congress to "expand...production of fuels from oil shale, oil sands, unconventional natural gas and other frontier hydrocarbon fuels." and explicitly recommends that Congress repeal section 526.

Although oil sands oil continues to be purchased unhindered by the U.S. department of defense and other agencies, section 526 has impacted other areas of the U.S. military agenda. Recently, the U.S. Air Force abandoned a coal-to-liquids project at a Montana air base, apparently for fear of lawsuits based on section 526.9 There has been speculation that it may also abandon its coal-to-liquid program altogether for the same reason.

It remains to be seen if section 526 will ultimately be repealed. Despite powerful efforts to the contrary (primarily based on arguments relating to energy security), the section remains in force.

California's Low Carbon Fuel Standard ("LCFS")

In April 2009, California adopted a 2007 executive order from the California Governor dealing with LCFS. The standard takes into account the entire life cycle of the fuel in calculating GHG emissions.10 Such a standard requires fuel providers to ensure that the mix of fuels they sell intmarket meets, on average, a declining standard for GHG emissions measured in CO2e gram per unit of fuel energy sold. While such a standard does not prohibit fuel providers from purchasing fuel that contains oil sands oil, it may act as disincentive to the purchase of such fuels as providers would then be required to "offset" the higher GHG emissions associated with oil sands oil with the purchase of biofuels such as corn ethanol. Corn ethanol is more expensive than the energy equivalent amount of gasoline, but produces approximately 22% less GHG emissions on a life cycle basis.

The California LCFS requires all fuel sold in California to have 10% less carbon emissions compared to industry average by the year 2020. While the LCFS is specific to California, at least 13 other states and some provinces have indicated a willingness to adopt it.11

Clean Energy Act

The Clean Energy Act was released on March 31, 2009 by Congressman Henry Waxman and Congressman Edward Markey and has been called "the first legislative proposal for a radical shift in U.S. energy policy". The Clean Energy Act, also known as the Waxman-Markey Bill, calls for national renewable energy and energy efficiency standards, establishes a single federal fuel-efficiency standard and a low-carbon fuel standard for biofuels, proposes a market-based emissions reduction program, and includes a global warming reduction program. The Clean Energy Act, including the allocation of emissions allowances, is currently being evaluated by Congress' Energy and Commerce Committee. The time-frame of the review is unknown but it is anticipated to be completed by the end of May.

The Clean Energy Act is separated into four parts, each with its own title. One title is "Reducing Global Warming Pollution", which calls for significant reductions to GHG emissions. It establishes a target of a 20% reduction in GHG emissions below 2005 levels in 2020, a 42% reduction in 2030 and an 83% cut by 2050. Although it refers to an emissions reduction program (i.e., a cap-and-trade system), it does not specifically address how to allocate emission trading allowances to various industries.12

The "Energy Efficiency" title of the Clean Energy Act calls for a new low-carbon transportation fuel standard to promote the development of biofuels and other "clean" transportation fuels. The low-carbon fuel standard in the Clean Energy Act is modeled after the California LCFS and could be expected to have a similar, although exponentially greater, effect on demand for oil sands oil.

The fourth title of the Clean Energy Act, "Transitioning to a Clean Energy Economy", is clearly protectionist. If passed, it will create additional costs for Canadian manufacturers and exporters. This part of the Act seeks to "ensure domestic competitiveness" of U.S. manufacturers vis-à-vis competitors in countries other than the U.S. and authorizes companies in energy-intensive sectors to receive "rebates" to compensate for additional costs incurred under the Clean Energy Act. It also allows the President to establish a "border adjustment" program which would require foreign manufacturers and importers to pay for special allowances to account for the carbon contained in U.S.-bound products.

It remains to be seen if the Clean Energy Act will maintain its current form or if it will re-emerge from review by the Energy and Commerce Committee with significant changes.

Currently, the Act has little or no Republican support and a number of lawmakers around the country have been critical of it, calling these goals unrealistic because the technology to meet them does not yet exist. Others are critical of the Clean Energy Act as it would increase energy taxes in the midst of a recession in the United States. Regardless of opposition to specific portions of the Clean Energy Act, there is considerable pressure on the U.S. to pass some type of climate change legislation before the next major international climate change conference scheduled to take place in Copenhagen in December 2009.13

Impact of the U.S. Enactments on Demand for Oil Sands Oil

At present, section 526 has little or no impact on the demand for oil sands oil. That is because the majority of oil sands oil is currently not used for motive fuel. That stated, if left unchallenged and if strictly enforced by the U.S. government, it could hinder future demand for any product that is destined for use as a motive fuel.

Similarly, California's LCFS presently poses little or no threat to oil sands oil because California consumes virtually no oil from Alberta. However, the expectation is that oil exports to that state will increase in the future. Indeed, the Honourable Mel Knight, Alberta Minister of Energy has gone on record as indicating that such a standard could have an effect on Alberta's bitumen future. "Does it have a possibility of a negative effect on Alberta's bitumen future? I would suggest I'd be very naïve if I thought anything other than 'yes' is the proper answer to that."14 Alternatively, similar provisions could be adopted by other states and provinces. If that occurs, it will certainly lead to decreased demand.

Unlike section 526 of the EISA and the California LCFS, the Clean Energy Act would be a law of general application in the U.S. It could result in the imposition of a universally applied LCFS as well as a border tax. If enacted, it is likely to have a much more dramatic and immediate impact on the demand for oil sands oil than the other two enactments.

Because the various U.S. enactments may eventually all lead to decreased oil sands demand, it is imperative that Canada, Alberta, and oil producers arm themselves with as much information as possible concerning the enactments. They can then use that information to challenge the enactments or lobby towards modification of such enactments.

Challenging the U.S. Enactments on the Basis of Trade Violations:

The intent of all of the above U.S. enactments is laudable. They all attempt to ensure a balanced playing field between US companies and companies located elsewhere that produce the same or similar products. While section 526 of the EISA and the California LCFS do not specifically refer to trade issues, because of their impact on companies and products beyond their borders, they have trade implications. The recently proposed Clean Energy Act addresses trade issues head-on and is clearly protectionist legislation.

As a result of the above trade impacts, all of the enactments need to be contrasted with, and interpreted under the auspices of, the provisions of the North American Free Trade Agreement ("NAFTA")15. Canada, the U.S. and Mexico are all parties to NAFTA. NAFTA was crafted in part to ensure the unhindered trade of goods between all three countries. It contains provisions that prohibit governments in one country from enacting laws that discriminate against companies and products from another country on the basis of nationality or origin. Chapter 11 of NAFTA in particular attempts to achieve equal treatment of investors in accordance with the principles of international reciprocity. Four articles of Chapter 11 (Articles 1102, 1103, 1105 and 1110) may provide a means for Canadian oil and gas producers to challenge various provisions of the enactments.

Excerpts from those Articles include:

Article 1102: National Treatment

1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

Article 1103: Most-Favored Nation Treatment

1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to investors of any other Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

Article 1105: Minimum Standard of Treatment

1. Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.

Article 1110: Expropriation and Compensation

1. No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law and Article 1105(1); and

(d) on payment of compensation in accordance with paragraphs 2 through 6.

Each of section 526 of the EISA, the California LCFS and parts of the Clean Energy Act must be reviewed in the context of protectionist trade measures and the above noted provisions of NAFTA. If it is determined that any or all of these legislative enactments deleteriously impact the demand for (and production of) oil sands oil, which production occurs in Canada, not the U.S., it may lead to a successful challenge based solely on trade issues. Accordingly, the enactments need to be closely scrutinized and their impact on oil sands development closely monitored. If the practical effect of the enactments is that they treat oil sands oil differently than other oil, they potentially amount to trade discrimination in violation of NAFTA – and possibly the World Trade Organization (WTO).

The potential for U.S. violation of NAFTA and the WTO has not been lost on Alberta. In a recent letter from Premier Ed Stelmach to Prime Minister Harper, Mr. Stelmach urged the Canadian government to adopt the following policy in its dialogue with the U.S.:

Canada's policy must guard against schemes that allow for non-reciprocal exemptions, subsidies that divert investment and subsequent industrial benefits to another country, or an unwieldy trading system that lacks full transparency and accountability or circumvents the normal rules, obligations and spirit of free trade under WTO and NAFTA treaties.16

Utilizing a trade issue may seem to be a novel approach to opposing U.S. GHG emissions enactments. However, it should serve as a reminder of how closely intertwined GHG emissions issues are to pure economic issues. GHG emissions can not and should not be considered in isolation. Rather, any laws relating to such emissions in any North American jurisdiction will be subject to scrutiny on the basis of trade, and consideration must always be given to ensuring that those laws are justifiable from a trade point of view or they will be challenged.

Challenging the Enactments Due to Uncertainty Surrounding their Use of the Term 'life cycle'

Each of section 526 of the EISA, the California LCFS and portions of the Clean Energy Act are predicated upon the measurement of the life cycle GHG emissions of products. Unfortunately little or no explanation is provided as to what is meant by the term 'life cycle' for example it is unclear if carbon capture and storage ("CCS") activities can be considered in a life cycle analysis. This requires clarity, especially when both Alberta and Canada have placed so much emphasis on CCS as they move forward in this carbon-constrained economy.17

The term 'life cycle' is also problematic. There are also various types of life cycles that can be analyzed. Life cycle emissions may only refer to emissions related to oil production. Alternatively, they may refer to emissions associated with taking oil from the well to the refinery ("WTR") or from the well to the motor vehicle where the fuel is consumed, i.e. well-to-wheel ("WTW"). When it is considered that upwards of 60-80% of the total GHG emissions in a WTW analysis occurs at the vehicle-use phase,18 and the production phase only accounts for approximately 5-17% of total emissions,19 the different life cycle analyses can lead to vastly different results.20 The difficulty and confusion caused by looking at different life cycles is perhaps best illustrated by way of an example. The Pembina Institute has reported that a barrel of oil derived from the oil sands results in GHG emissions that are approximately 3x or 300% more than conventional crude oil.21 Conversely, a study by T.J. McCann found that under a full life cycle (WTW) analysis, the GHG emissions associated with the production of oil sands oil were only approximately 15-16% greater than the same production of domestic onshore light crude.22 300% is vastly different from 15%, yet both percentages may be accurate because they relate to different life cycle analyses. It is therefore important that people understand what comparison is being made when discussing relative life cycle GHG emissions.

Another issue of concern involving a discussion of life cycle relates to the actual the literature confirms that life cycle GHG emissions vary ific recovery method used to recover the oil sands oil (i.e. surface mining versus various and diverse in-situ recovery methods). Accordingly it is difficult to generalize and place a figure on the 'average' GHG emissions from the oil sands. Further, GHG emissions vary from reserve to reserve for conventional oil due to differences associated with production, transportation, and refining methods. Thus the appropriate baseline for comparison purposes becomes important.

A study by T.J. McCann & Associates illustrates the above concern. It compared total GHG emissions per 1,000 liters of transport fuel obtained using both conventional and non-conventional methods.23 The study assumed Chicago-area refining and consumption and found that the life cycle total kilograms of CO2e on a WTW basis for Canadian synthetic crude oil was less than Venezuelan partial upgrader crude, both of which are obtained using non-conventional methods. A similar comparison was made by Mr. Jason Chance, a representative of Alberta Energy, who recently appeared before the California Air Resources Board. He is quoted as having stated:

That is because when you consider the full life cycle [of GHG emissions] from well-to-wheels, Alberta crude from in situ production or integrated mining operations is comparable to Venezuelan or Mexican crude and even some of the heavier crudes currently being produced in California.24

A paper published in the Environmental Research Letters Journal in January 200925 ("Charpentier paper") also highlights the difficulty in accurately measuring the total life cycle GHG emissions of oil sands oil and conventional oil. The Charpentier paper compared 13 studies of GHG emissions associated with oil sands operations and conventional operations and found that "Constructing reliable life cycle models of oil sands pathways is challenging for a variety of reasons, including limited data availability (and the proprietary nature of industry data), the rapid expansion of the industry, the unique and complex nature of each oil sands project, and the evolving technologies being applied in the industry." The authors noted wide variances in the GHG emissions calculated in the earlier studies. Earlier studies varied in their "boundaries, data quality, methods and determinations". The Charpentier paper concluded that a concerted effort was needed "to develop validated life cycle models that produce verifiable results sufficiently refined for supporting sound scientific and public policy decision making". As a result of the wide variance in the studies, the authors stated:

However, when comparing the WTW oil sands pathway results with those of conventional crude oil, the low-end oil sands results fall into the range of the conventional crude oil pathways reported in the studies. While this is probably due to inconsistencies in the modeling in the studies, it is not inconceivable that an oil sands pathway may perform better than a conventional oil pathway, under certain circumstances. For example, it may be possible that an oil sands project with high feedstock quality and minimum extraction and upgrading energy requirements (or low carbon energy inputs) results in lower GHG emissions than a conventional oil project with a low production rate, steam enhanced stimulation, heavy flaring and long transport distance from extraction to market. (emphasis ours)

Such difficulties in interpretation, coupled with the complexities of measuring life cycle GHG emissions using current methods, and the comingling of conventional and oil sands oil within the U.S. fuel supply may make it challenging for the U.S. to enforce any enactments that are predicated upon GHG life cycle analyses.


Recent policy and legislative initiatives in the U.S. have the potential to create significant challenges for the Canadian energy industry in years to come. President Obama has signaled a change in the way the U.S. views energy security from ensuring the U.S. has a proximate, secure source of oil and natural gas to decreasing the U.S. dependency on such oil and natural gas imports. Recent U.S. legislative initiatives include section 526 of the EISA, the LCFS enacted by California and the proposed Clean Energy Act. All of these could act as disincentives to the importation of Canadian oil sands oil. These factors, coupled with the current assault on oil sands oil as "the world's dirtiest oil" in the U.S. media, present a challenge for the oil industry in Canada.

One means of responding to the recent U.S. enactments is to consider challenging them in the context of trade issues. If they can be found to be discriminatory towards Canadian oil sands companies, such discrimination may be sufficient to constitute a NAFTA violation. Alternatively, the enactments may prove to be difficult to enforce due to confusion surrounding various terms, especially their use of the term 'life cycle', which term is generally not defined. Furthermore the data needed for life cycle comparisons may be lacking. Clarification of the term 'life cycle' will be essential if the U.S. intends to rely on the enactments as a basis to decrease its demand for oil sands oil.


1 Government of Alberta, Department of Energy (accessed April 24, 2009)

2 Energy Information Administration, Department of Energy "Crude Oil and Total Petroleum Imports Top 15 Countries" (accessed April 24, 2009)

3 Energy Independence and Security Act of 2007, Pub. L. No. 110-140, [2007] : (accessed April 24, 2009)

4 U.S. Bill H.R. __ American Clean Energy and Security Act of 2009 111th Cong., 2009 (accessed April 24, 2009)

5 Letter from Canadian Ambassador to the United States, Michael Wilson to Secretary of State Robert Gates, February 22, 2008

6 Jeff Davis "Anti-Oil sands Fighter Waxman Takes U.S. Energy Committee Chair" Embassy (26 November, 2008) (accessed April 24, 2009)

7 James M. Inhofe, Senator, Oklahoma, News Release, "Inhofe Introduces Beneficial Energy Legislation" (January 21, 2009)

8 Institute for 21st Century Energy "A Transition Plan for Securing America's Energy Future", U.S. Chamber of Commerce, (accessed April 24, 2009)

9 Renee Schoof "Air Force drops plans to make fuel from coal in Montana" Miami Herald (29 January 2009), (accessed April 23, 2009)

10 Office of the Governor of California "The Role of a Low Carbon Fuel Standard in Reducing Greenhouse Gas Emissions and Protecting Our Economy" / (accessed April 24, 2009)

11 See for example, section 4(2)(b) of the Nova Scotia Environmental Goals and Sustainable Prosperity Act, c.7, 2007 S.N.S.

12 Unlike the system proposed by the Clean Energy Act, Canada's emissions trading system is currently intensity-based. A cap-and-trade system such as that proposed by the Clean Energy Act differs from an intensity-based system. Accordingly, if the Clean Energy Act is adopted in the U.S., current Canadian policies may not be viewed as adequate by the U.S. This could place considerable pressure on Canada to formally adopt a cap-and-trade regime. Although Canada has expressed a desire to move towards a joint North American cap-and-trade system in concert with the U.S., the U.S. has shown little interest in such bilateral discussions. Rather, the process may entail the U.S. adopting its own system and Canada being forced to follow in order to avoid the imposition of further U.S. protectionist measures.

13 As an alterative to the Clean Energy Act, the U.S. Environmental Protection Agency ("EPA") may step into the fray. In April 2007 the U.S. Supreme Court in Massachusetts et al. v. Environmental Protection Agency et al. 549 U.S. found that carbon dioxide qualifies as a pollutant under the Clean Air Act, which was drafted in part by Henry Waxman and passed under the Clinton administration in 1990. This decision gives the EPA the authority and responsibility to regulate carbon dioxide without any guidelines from Congress or the House of Representatives. Recently, the EPA declared that global warming endangers human health (See: Environmental Protection Agency, News Release, "EPA Finds Greenhouse Gases Pose Threat to Public Health, Welfare/Proposed Finding Comes in Response to 2007 Supreme Court Ruling" (17 April, 2009)), increasing the likelihood of further regulation of carbon dioxide emissions in the near future. If the Clean Energy Act gets bogged down in Committee, President Obama is expected to order the EPA to impose new regulations to address GHG emissions.

14 "Alberta Wary of California Low-Carbon Fuel Rule", Daily Oil Bulletin, April 27, 2009.

15 North American Free Trade Agreement, Canada, United States and Mexico, January 1, 1994

16 Letter from Premier Ed Stelmach to Prime Minister Stephen Harper, March 31, 2009

17 Approximately 70% of Alberta's planed reduction in GHG emissions over the next 40 years is predicated upon CCS. See "Alberta's 2008 Climate Change Strategy, Responsibility/Leadership/ Action", Alberta, January 2008. For the federal proposal, see "Turning the Corner: An Action Plan to Reduce Greenhouse Gases and Air Pollution". Government of Canada, April 2007; updated in March 2008.

18 Charpentier, Alex D., et al. "Understanding the Canadian oil sands industry's greenhouse gas emissions" Environmental Research Letters, no. 4 (2009): (accessed April 23, 2009)

19 Canadian Association of Petroleum Producers, Environmental Challenges and Progress in Canada's Oil Sands. Canadian Association of Petroleum Producers, April 2008, at p.4.

20 If 60-80% of the total GHG emissions in a WTW analysis occur at the vehicle-use phase and only 5-17% at the production stage, focusing so much attention on the latter appears to be misguided. The largest contributor to the overall GHG emissions associated with fuel is clearly the conventional internal combustion engine. One would expect that efforts should be concentrated on making that engine more efficient. A 10% increase in fuel efficiency would reap far greater overall GHG reductions than a 15-20% decrease in GHG emissions associated with oil sands oil production.

21 The Pembina Institute, Oil Sands Fever: The Environmental Implications of Canada's Oil Sands Rush. The Pembina Institute, November 2005, at p.22

22 T.J. McCann and Associates Ltd. "Typical Heavy Crude and Bitumen Derivative Greenhouse Gas Life Cycles in 2007" (accessed April 24, 2009). See also the Canada Oil Sands website, which states that "Full life cycle GHG emissions are about 15% higher from fuel derived from oil sands than they are from fuel derived from domestic onshore light crude oil." (accessed May 11, 2009)

23 T.J. McCann and Associates Ltd., supra note 23

24 "Technology Key for Sustainability, Alberta, Industry Attending California Meeting", Daily Oil Bulletin, April 23, 2009

25 Charpentier, supra note 19

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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