Fastest-Growing Emissions Source Won’t Get Canada Review

Oil-sands projects that use methods such as underground steam injection rather than open-pit mining to extract bitumen will be excluded from mandatory environmental reviews by the Canadian government under proposed regulations.

Projects that use so-called in-situ methods, Canada’s fastest-growing source of climate-warming emissions, aren’t listed on an amendment to a law regarding approvals by the Canadian Environmental Assessment Agency. Environment Canada predicts emissions from in-situ projects, including those using steam to melt bitumen, will rise 44 percent by 2020 from 2005.

Producers including Suncor Energy Inc. (SU) and Cenovus Energy Inc. (CVE) are among companies contributing to a more than fivefold forecast rise in bitumen output from in-situ methods over the same period as it becomes the dominant way to develop oil-sands projects, according to a report yesterday by the environment department. Without further measures to curb carbon output, Canada won’t meet its pledge to lower emissions by 2020, the department said in the report.

“Eighty percent of the resource is only accessible by in-situ technology,” Keith Stewart, a climate and energy analyst at Greenpeace Canada in Toronto, said in a phone interview today, pointing out a leak continues at Canadian Natural Resources Ltd. (CNQ)’s Primrose in-situ project. “Each well is small but when you add up hundreds of them, it’s massive.”

All oil sands projects would be reviewed by the provincial government.

Canada announced last year it would make changes to streamline environmental reviews and reduce their number by only assessing major projects. The Canadian Environmental Assessment Agency will review oil sands mining projects that produce more than 10,000 cubic meters of oil a day, or about 60,000 barrels, according to the amendment posted online yesterday.

The environment minister can still choose to review projects not required under law, such as where there may be “adverse environmental effects related to federal jurisdiction or public concerns about those effects,” said Isabelle Perrault, a spokeswoman for the Canadian Environmental Assessment Agency.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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