Oil industry in Canada bolsters efforts for cleaner production

  • Article by: CLIFFORD KRAUSS
  • New York Times
  • June 26, 2013 - 8:39 PM

– After two years of study, President Obama this week defined the criteria for what will be one of the signature decisions of his presidency: the proposed Keystone XL pipeline that would carry heavy crude from here to American refineries must not “significantly” worsen global warming.

Anticipating that standard, Canadian oil companies have embarked on a race to develop cleaner technologies that will make their production less damaging to the environment.

From improving valves to revamping giant boilers to exploring the storage of excess carbon deep underground, the companies are spending roughly $1 billion year as they search for a breakthrough.

“We read the newspapers every day and we know what everyone is thinking,” said Harbir Chhina, executive vice president for Cenovus Energy, Canada’s No. 4 oil company. “The status quo is unacceptable.”

It is a tall order, since production of synthetic fuels made from oil sands creates substantially more greenhouse gas emissions than gasoline made from conventional oil, arousing assertions that the United States cannot be serious about controlling global warming if it gives Canada an export outlet for the oil. What’s more, the solutions that are being tried are probably decades from widespread adoption.

“There is a huge amount at stake for the oil companies,” said Amy Myers Jaffe, executive director for energy and sustainability at the University of California, Davis. “To the extent that they reduce the carbon intensity of the oil sands, they will have an easier time finding approval for pipelines. But if it’s just greenwashing, they are going to have an unproducible asset.”

The efforts are one part of an industry campaign chasing a coveted prize: the Obama administration’s approval for the proposed pipeline extension that would put more Canadian oil in American gas tanks.

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