It’s time to axe the c(r)ap and start discussing our progress on emissions

Headlining this week’s climate change and emissions reduction news is the Canadian government’s next step in its crusade against big emitting industries, especially the fossil fuel sector – a “hard cap” on greenhouse gas (GHG) emissions. Of course, this will be interpreted as a cap on production by most in a hydrocarbon resource industry that provides more than 80% of the world’s energy.

A hard cap on emissions and therefore on the sector that drives a significant part of the wealth in the Canadian economy is taking it to a new level. Currently, Canada has carbon taxes on consumers and industry, methane and NO_x emission targets (both potent GHG), new fuel-fired equipment regulations and, of course, the new Clean Fuel Regulations (CFR).  (Figure 1)

 Figure 1 – Canada’s Clean Fuel Regulations

Together, the mix of regulations targeting emission reduction is potent and complex, especially when adding municipal and/or provincial regulations. This has made it extremely difficult for leadership teams in any of the heavy industries or resource development sectors to know what to do; how to plan, where to invest, and how to stay on top of the ever-changing regulatory environment while managing the risks they pose to their companies.

Canada has the most complex mosaic of emissions-focused regulations of any jurisdiction in the world, presenting challenges that other major energy-producing nations do not face.

I will leave it to others to fully unpack the implications of the emission cap, and certainly there is a steady stream of articles about the “existential threat” of anthropogenic climate change and the ever-increasing GHG emissions that are likely driving the narrative, yet rarely is anything written about the positive progress on emission reduction made in western economies, and specifically emission reduction in Western Canada. Instead, most articles focus on the challenges and outright failures when it comes to emission reduction.

On top of the regulatory smorgasbord, Canada’s Liberal government with their Bill C-59 has made “talking or writing” about environmental progress even more difficult and far less likely.

Emissions are clearly a global issue as we have but one atmosphere. The Paris Accord with Article 6 created an active mechanism to work on lowering carbon intensity, with one higher-emitting fossil fuel (coal, for example) being substituted with a lower-emitting one (natural gas). They understood that the developing nations would have a longer transformation to their energy networks and supplies. Canada can play a key role in providing lower-emission-intensity fuels.

Asia GHG emissions are now leading the world by a large amount and are growing consistently, while North America’s GHG emissions are LOWER than they were two decades ago. (Figure 2) As BIG Media’s Laurie Weston documented, the more populous developing regions are unlikely to apply the brakes any time soon on development that is giving them an improved standard of living – Putting global emissions in perspective .

Figure 2 – Carbon dioxide emissions by region.

We can debate pace of change; but our modern world is dependent on the burning of fossil fuels in so many ways, and reducing emissions without negatively affecting our modern way of life is a tough balancing act. Western Canada’s heavy resource development and associated industries play a supersized role in Canada’s economy and, so, reducing emissions in a pragmatic manner is essential to all of Canada for economic reasons, and – more importantly – in order to keep our high standard of living.

The Canadian government, through its Bill C-59, is preventing the most important conversation we could be having, if emissions reduction is the goal.

Rather than silencing discussion of “greening progress”, we should be shouting from the rooftops so best practices and critical knowledge proliferate. Areas of improvement and emerging technologies that continue to reduce or eliminate emissions are being applied in many industries, including by oil and gas producers. These successes need to be amplified and shared to increase the rate of adoption, not just domestically but globally, as in many ways Canada has developed leading technology and solutions that are making a material difference. Canada could be exporting that expertise to benefit the country and the international community.

Having led a Canadian-based, employee-owned industrial automation company in the heavy resource and process industries – mining, forestry, oil & gas, power generation, cement making, chemical, and refining – I have had a front-row seat to the improvements in emission outcomes across the process industries.

These complex processes that drive our modern world are large consumers of energy. Heat inputs generally make the chemical process happen and, depending on the molecules you are “cracking”, or changing, it can require enormous amounts of heat, mostly provided by coal, oil, or natural gas, as their energy density (Energy fundamentals – an essential element of the transition discussion) is far superior to the alternatives. Their constituent molecules are required to make the multitude of products that define our modern world – from the clothes we wear, to the materials with which we build, to the omnipresent electronics, to the medicines we consume; thousands of items are made from these processes, and the list continues to grow.

Growing alongside the product use and our consumption economy is energy. Energy use of all types increases each year. (Figure 3) Therefore, so too are GHG emissions; defined often as CO₂, methane, NO_x, and other constituent gases. Some gases – CO₂ , for example – are inert, others not so much. Coal, oil, and natural gas consumption hit record production and consumption rates again in 2023, and all are on track for further growth in 2024.

Figure 3 – Global energy consumption

 Thus, GHG emissions continue to grow, as more of the world “modernizes” and wants what the western world takes for granted. Mitigation measures, meanwhile, are unable to match the rate of consumption growth.

As coal is an energy-dense, low-cost energy source, the developing world, like the modern economies of the past, are consuming ever-increasing amounts of it. (Figure 4) With coal now clearly the largest driver of emissions growth, it is important to discuss the role of natural gas as a fuel substitute to coal amid the energy transformation that needs to occur.

Figure 4 – Coal consumption by region.

Figure 5 offers one view to how our consumer economy works: in essence, the OECD (Organization for Economic Co-operation and Development, or “wealthy countries”) consume lots of stuff, and non-OECD countries (mostly Asia, particularly China) produce the stuff.

Together, these charts tell a story of emissions reduction in North America, largely due to movement away from coal and a multitude of tactical emission-reduction improvements made in heavy industries. They also show how GHG emissions have been outsourced to China, the manufacturer to the world.

Figure 5 – Carbon dioxide emissions, consumption and production.

A snapshot (Figure 6) of the interactive table from this BIG Media article (Renewable energy – renewing hope or struggling to cope?) illustrates how the United States moved from coal being responsible for roughly 45% of the energy going into the electrical grid in 2010 to 23% by the end of the last decade.

Figure 6 – Energy source data spanning 10 years.

Visit Renewable energy – renewing hope or struggling to cope? to explore energy source trends for China. Germany, and globally.

There are six common ways to reduce or eliminate source GHG emissions:

1) removing venting or fugitive emissions leakage

2) reduce the energy inputs to reduce waste heat throughout the process

3) capture the waste heat and use it for other purposes

4) capture the exhaust stack emissions or what is often referred to as carbon capture storage and utilization (CCSU)

5) substitute one higher emitting fossil fuel source, with another lower emitting one

6) use non-emitting energy sources

Figure 7 (courtesy of PTAC) shows the well-understood hierarchy of solutions available to heavy industry to reduce their GHG or CO₂ equivalent (CO_2-e) when producing their products. The lower-left quadrant identifies technologies to exploit, as the unit cost of emissions reduction or abatement $/tCO₂ are below $95 per tonne and with carbon taxes at $80 per tonne, the economics favour focus and investment in all these applied technology areas. It takes substantial planning, focus, and time to make it happen, and many instances of demonstrated improvement to make a difference.

Figure 7 – CleanTech and the economics of innovation.

It is not easy to achieve an acceptable balance of technological advancement and low environmental impact. In baseball terms, the lower-left quadrant in Figure 7 is hitting singles, not home runs. Why put that effort into so many small reductions when you can swing for the fences and achieve more substantial improvements … or just enjoy the game from the stands, avoiding any action at all?

Industrial carbon taxes have been in place in the Canadian provinces of Alberta and BC for over a decade, as it has been the consensus, including by industry leaders, some “stick”, or penalty, was necessary to ensure emission reductions happened. This stick, when coupled with some “carrots” or incentives, such as tax credits or direct funding supports, have contributed to significant reductions in emissions in the categories mentioned above.

A lot of work is ongoing to get carbon capture off the ground at scale, but except for a few locations, due to its significant upfront cost and complexity, it has not occurred at the vast scale necessary to achieve game-changing emission reductions. This is an area that continues to get significant press and industry focus, as it can have major impact. However, as shown in Figure 7, it is a very costly form of emission reduction, with costly new processing equipment needed and even more energy consumption. It is the proverbial home run that all heavy industry – from power plants to oil and gas producers – need in order to make more of a difference … if they can do it economically while staying competitive, including in a global economy with global commodity products.

An excellent example of progress is with resource companies in Western Canada beating the methane-reduction targets of 45% by 2025 mandated by the Canadian government, and making progress with a clear path to achieving a 75% methane-emission reduction by 2030. As methane is a powerful GHG, these achievements are meaningful and are possible because of the tactical actions taken by implementing leading technology along with local expertise including:

1. The changing of tens of thousands of legacy field devices that emitted methane in their normal control operation by their inherent design.
2. Hundreds of natural gas industrial engine control systems have been upgraded to drop source emissions by capturing the fugitive and vented methane from the engine and compressor packages, and are now instead re-injecting it to use as fuel (locally developed and patented “SlipStream” technology). Hundreds more have been upgraded to meet new strict requirements in nitrous oxide emissions as NO_x is not only a health hazard but a potent GHG.
3. Reducing steam use in the production of steam-assisted gravity drainage (SAGD) operations across hundreds of oilsands well pairs.
4. Improving fuel input systems in a variety of industries – from fertilizer to plastics andcement making – where an enormous amount of heat is necessary to drive the processes.
5. Electrifying process elements where feasible, and utilizing variable frequency drives (VFD) on electric motors for improved energy efficiency.
6. Applying advanced process control technologies, including artificial intelligence and machine learning, to reduce energy inputs while maximizing quality and production, also in a variety of process industries.

All heavy process operators understand the importance of precise measurement. The sensors and the information they carry allow industrial facilities to run safely and successfully. The sensors often serve as the “cash register”, as all products eventually are sold to a purchaser, whether it be to another company as an input to what they are making (propane to make plastic, for example), or to the public, in the case of gasoline. So, standards in measurement are critical to the success of all businesses and, in particular, the heavy industries and resource developers where, beyond economic drivers, processes are often extremely complex and bad things happen if proper measurement and control strategies are not used.

Back to Bill C-59, which as written, states only “international standards” apply to ensure accurately reported emissions reductions. However, those standards are not defined within the bill. The same or similar sensors and philosophy of measurement and engineering calculations that are applied to all the process industries are applied to GHG/CO_2-e measurement.

Significant investment is being directed at developing software solutions to ensure proper CO₂ and methane accounting, and to make sure those measurements are verifiable. Accepted standards such as those of the Canadian Standards Association (CSA) and the International Standards Organization (ISO) govern the heavy process industries, and emission-reduction claims should be based upon those “international standards”. However, because of the nebulous “international standard” reference in Bill C-59, without definition, it is difficult for any industry player to know where the bar is, let alone whether it is being met.

It is time for Canada to acknowledge the greening progress by many, and proudly talk about our collective contributions to a rapidly modernizing world. The slogan “axe the cap” perhaps captures the emotion of the moment, but a wider understanding of complex, nuanced issues related to emission reduction is required in order to properly validate the progress. The sooner, the better.