The case of the oil sands in Alberta COP23 Side Event, November 9 th - - PowerPoint PPT Presentation

Transitions Pathways and Risk Analysis for Climate Change Mitigation and Adaptation Strategies

COP23 Side Event, November 9th, 2017, UK Pavillon Presentation by Jenny Lieu, Sussex University, Science Policy Research Unit

(SPRU) Gordon MacKerron, Sussex University, Science Policy Research Unit (SPRU) Oscar Oscar van Vliet / CP / D-USYS

The case of the oil sands in Alberta

AGENDA

• Introduction to TRANSrisk
• UK nuclear power
• Oil sands in Alberta
• Renewable energy in Switzerland

C ASE S TUDY C OUNTRIES: A REAS STUDIED

Overarching Research Question: What are the costs, benefits and risks & uncertainties associated with transitions pathways for climate change mitigation policies? Americas

• 1. Canada

(SPRU)

• 2. Chile

(CLAPESU C)

Europe

• 3. Sweden (SEI)
• 4. Netherlands (JIN)
• 5. UK (SPRU)
• 6. Poland (IBS)
• 7. Austria (Uni Graz)
• 8. Switzerland (ETHZ)
• 9. Spain (BC3)
• 10. Greece (NTUA/ UPRC)

Africa

• 11. Kenya (SEI)

Asia

• 12. China

(SPRU)

• 13. India

(SPRU)

• 14. Indonesia

(SEI)

Risk

• Outcome is uncertain
• Potential for negative consequences
• Negative impact on livelihoods/society, environment,

economy, and infrastructure…

Uncertainty

• Incomplete knowledge
• Lack of information
• Disagreement of what is known

Source: IPPC, 2014

Definitions

?

Likelihood

(uncertainty low to high)

Outcome

positive negative

Risk Benefit

Implementation risk: potential for a policy to not be implemented, given a barrier Consequential risk: potential of a policy to cause a negative consequence

Synergy/ co-benefit: positive outcomes that have benefit on multiple scales: e.g. actors, context (political, social, environmental etc.)

Context of risks & uncertainties

…over time and space

Society Economy Environment Technology

Risk related to our potential future pathways

• 1. Where do we want to go?
• 2. What actions are required to get there?
• Risk (in implementation): what are the barriers to get there?
• 3. How might the future look like?
• Risk (as a result): what could be a negative outcomes of that

future option?

Risk & uncertainties: Pieces of the puzzle:

Less difficult to define More difficult to define

Uncertainty Risk

Stakeholders Stakeholders Modelling Modelling

Transitions Pathways and Risk Analysis for Climate Change Mitigation and Adaptation Strategies

Jenny Lieu, Sussex University, Science Policy Research Unit (SPRU) content in collaboration with Luis D. Virla and Fort McKay Sustainability Office

Source: Billy Chan Source: taken by Ryan Abel, Fort McKay Sustainability Office

Alberta’s two faces: future pathways

• Canada contributes 1.6% of global

emissions and is one of the top 10 emitters

• Fossil fuel production: biggest

contributors comprising of 27%.

• Alberta emits the most ~37.4 % in 201
• Fossil fuel industry sector and power

generation in Alberta has increased emissions (53% from 1990-2005)

• Alberta emissions reductions need to

reflect Canada’s Paris Agreement goals to: decrease GHGs emission by 30% below 2005 levels by 2030.

I NTRODUCTION TO A LBERTA O IL S ANDS

Source: Google maps

• The oil sands deposits in Alberta 3rd

largest proven oil reserves)

• Located on traditional land of 24

Indigenous communities (~23,000 people)

• In 2016, Alberta's oil sands proven

reserves were 165.4 billion barrels

• 20% recoverable open pit mining
• 80% recoverable through in‐situ

production

• Oil production in Alberta was 15.8 million

m3 in July 2017, 8.2% higher compared to July 2016

• Consists of 5.5% of the total minable

287 billion m3

I NTRODUCTION TO A LBERTA O IL S ANDS

Source: taken by Ryan Abel, Fort McKay Sustainability Office

• The Athabasca region in Alberta
• verlaps with traditional territories
• f 5 Indigenous communities

Regional Municipality of Wood Buffalo:

• Mikisew Cree First Nation,

Athabasca Chipewyan First Nation, Fort McKay First Nation, Fort McMurray First Nation, and Chipewyan Prairie Dene First Nation.

• Risk of adverse cumulative effects
• n ecosystem of the boreal forest

has significantly increase since 1981

• Impacts socioeconomic welfare of

communities

I NTRODUCTION TO A LBERTA O IL S ANDS

Source: https://open.alberta.ca/dataset/b6f2d99e-30f8- 4194-b7eb-76039e9be4d2/resource/063e27cc-b6d1-4dae- 8356-44e27304ef78/download/FSOilSands.pdf)

• Government of Alberta’s current effort to decrease emission in the oil sand sector.
• Alberta (2015): Climate Leadership Plan and proposed a emissions caps emissions

trading system and a carbon tax for facilities that exceed the 100,000 CO2 tonnes/year.

• Oil Sands Emission Limit Act: legal obligation for the oil sand sector to limit

emissions to 100 Megatonnes (Mt) per year

• Alberta the first jurisdiction in North America to regulate greenhouse gas for large

industrial facilities

PATHWAY 1: “C AP THE EMISSIONS HAT”

Crude bitumen production in 2016: 2.5 million barrels per day (bl/d) or 70 Mt of GHG emissions Quick and dirty calculation : cap at ~3.57 million bl/d

Source: Author’s own

• Carbon tax of 30CAD/tonne year, increasing to 50CAD/tonne by 2022
• Cost of production has decreased to around 25CAD/barrel due to

technological efficiencies

• Tax increases costs by ~1 CAD/per barrel.
• Tax to encourage CO2 reduction in the bitumen extraction/

production process: e.g. increasing energy efficiency & renewable energy, & reduce methane flaring

• Carbon capture and storage as a ‘game changer’. From 2018, Alberta

is expected to capture 2.76 million tonnes of CO2./year

PATHWAY 1: “C AP THE EMISSIONS HAT”

Source: Author’s own

Barriers to implementation:

• Uncertain implementation of the 100 MT emissions cap: may delay

implementation

• Uncertain implementation of sector based performance standards
• In 2016-17, bitumen revenue amounted to $1.48 billion, or 47.9 % of

the non-renewable resource revenue

• Change in government in the next election (2019) can create risks in
• verthrowing emission cap

PATHWAY 1: “CAP THE EMISSIONS HAT”

Source: http://www.cbc.ca/news/canada/edmonton/rachel-notley-and-the-ndp-fresh-faces-or-ruin-of-alberta-1.3567192

Potential negative consequences:

• Oils Sands are a main economic

driver in Alberta, risk of high unemployment

• Emissions leakage: companies may

move to other provinces with lower regulations

• Consolidation of companies due to

exit of international players- creation of powerful oligopolies

• Opportunistic behaviour: increase
• il production for short term gains

to offset profit losses

PATHWAY 1: “CAP THE EMISSIONS HAT”

Source: Author’s own

• Paced oil sands development and

land use rights protection

• Developed by the community of

Fort McKay (study carried out by ALCES, 2013)

• Bitumen production should peak at

3.5 million barrels per day (Mdpd) by 2040

• In 2012 the annual production was

at 1.6 Mbpd

• In 2016 production was at 2.5

Mbpd

PATHWAY 2: “PACE YOUR D EVELOPMENT”

Source: Google maps

• Maintain traditional land uses and protecting

wildlife while enabling the oil sands to develop at a more thoughtful pace

• The Traditional Territory: land entitled to

the people of Fort McKay to exercise their treaty rights

• Right to hunt, trap, and gather resources on

their Traditional Territory

PATHWAY 2: “PACE YOUR D EVELOPMENT”

Source: http://www.wbea.org/tradit ional-knowledge

• Include indicators e.g.: Moose Habitat, Fisher

Habitat and Edible Berry Suitability, Native Fish Integrity

• Key strategy to increase protected areas: from

current 10.4% to ~39.2%

• 378,483- 1,420,579 ha of the area, ~ 84% of the

area makes up Fort McKay’s Traditional Territory

Celina Harpe, Elder in Fort McKay

• Strong collaboration between industry and the First Nations community needed
• Industry collaboration to set best practices
• Protected land areas -> aligned with the 2012 Federal Recovery Strategy for

Woodland Caribou – Boreal population

• Provincial plans needed to protect 65% of caribou ranges by October 2017
• In Alberta, between 57% - 95% of each caribou range are disturbed by

industrial activities

PATHWAY 2: “PACE YOUR D EVELOPMENT”

Source: Billy Chan

Barriers to implementation:

• Segmented efforts between

environmental agencies, communities, industry and government

• Lack of following up on monitoring

studies and translating studies to policy objectives

PATHWAY 2: “PACE YOUR D EVELOPMENT”

Potential negative consequences:

• May not meet the governments CO2

reductions target-

• May impact the economy
• Currently modelling needs to be

carried out to assess these potential negative consequences

Source: Author’s mom

• Government of Alberta to

consult with Fort McKay community and coordinate with existing organisations to monitor and explore cumulative impacts of industry

• Meaningful consultation:

free, prior and informed consent (FPIC) in United Nations Declaration on the Rights of Indigenous peoples (UNDRIP).

C ONCLUSIONS N EXT STEPS:

Proposed Consensus Building Engagement Process

• 1. Pre-as

s es s ment

• 2. Development
• 3. Implementation
• 4. Monitoring &

learning

• 5. Reflection on

les s

• ns

Core inclusion values*: Respect Relevance Reciprocity Responsibility

Censuses: trust built between the Indigenous right holders and other parties

Source: Authors’ own

• When setting policies and targets to reduce

emission, consider wider approach to include land use and wildlife indicators

• Collaborate with in-situ monitoring

programmes

• E.g. disturbance indicators including

Land Use Footprint and reclamation indicators

• Synergies with the Alberta Biodiversity

Monitoring Institute (ABMI) and The Cumulative Environmental Management Association (CEMA)

• E.g. specific fish and wildlife indicators

for the mineable oil sands area north of the LICA region.

C ONCLUSIONS N EXT STEPS:

Source: Author’s own

O PPORTUNITIES: A 3 RD PATHWAY “M IX AND ROUND IT ALL UP”

• Supporting a clean energy mix supply & demand side changes
• Considers limited growth of oil sands and expansion of

renewable energy (goal of 30% by 2030 in the electricity sector)

• Alberta Renewable Electricity Program: 5000 MW by 2030
• RE estimated to bring in $10.5 billion in new investment by 2030

creating-> ~7,200 new manufacturing jobs

Source: http://www.thecanadianencyclopedia.ca/en/article/wind-energy/

A message from Cece Fitzpatrick, Elder in Fort McKay

AlCES and Integral Ecology Group (2013) ‘Fort McKay Cumulative Effects Project Technical Report of Scenario Modeling Analyses with Prepared for the Energy Resources Conservation Board on behalf of the Fort McKay Sustainability Department’, (1673682). Boothe, P . and Boudreault, F .-A. (2016) BY THE NUMBERS: CANADIAN GHG EMISSIONS. Lawrence National Centre for Policy and Management. Available at: http://www.ivey.uwo.ca/news/news-ivey/2016/1/by-the- numbers-canadian-ghg-emissions/. Energy Resources Conservation Board, A. (2010) ‘ST98-2010: Alberta’s Energy Reserves 2009 and Supply/Demand Outlook 2010-2019’. Available at: http://www.aer.ca/documents/sts/ST98/st98_2010.pdf. Leach, A. et al. (2015) Executive Summary. CLIMATE LEADERSHIP . Report to Minister. Alberta Minister of Environment and Parks. Available at: http://www.alberta.ca/climate-leadership-plan.aspx. Natural Resources Canada, N. R. C. (2016a) ‘10 Key Facts on Canada’s Energy Sector’. Edited by M. of N.

• Resources. Available at:

https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/10_KeyFacts_Energy_Sector_e.pdf Natural Resources Canada, N. R. C. (2016b) ‘Energy Fact Book’. Available at: https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/EnergyFactBook_2016_17_En.pdf Russell, T ., Pendlebury, D. and Ronson, A. (2016) ‘Alberta’s Caribou: A Guide to Range Planning Vol 1: Northeast Alberta’, 2, p. 61. World Resources Institute, W. R. I. (2016) ‘CAIT Climate Data Explorer - Historical Emissions’. Available at: http://cait.wri.org/historical/, Environment Canada and World Bank Population data?indicator[]=Total GHG Emissions Excluding Land-Use Change and Forestry&indicator[]=Total GHG Emissions Including Land-Use Change and Forestry&year[]=2012&sortIdx=NaN&chartT Websites: https://www.alberta.ca/climate-oilsands-emissions.aspx http://www.energy.alberta.ca/CCS/pdfs/FSCCS.pdf

R EFERENCES

Thank you very much for your attention!

Contact: Jenny Lieu

Email: j.lieu@sussex.ac.uk Twitter:@transrisk_EU

L O C AL PERSPEC T I VES

O N MI T I GAT I O N T EC H NO LO GI ES I N S H ANGH AI A ND B ALI

A case study of the electricity system

Oscar van Vliet / CP / D-USYS

Do we need gas as a bridging fuel?

Contents

Swiss electricity system & Energy Strategy Impact of renewables and gas as a bridging fuel Implications for other countries Outlook for renewables without gas

Current electricity production in Switzerland

3

Swiss Energy Strategy 2050

source: Bundesambt für Energie

Scenario analysis

Swiss renewables + natural gas

intermittent supply

• vs. variable demand

Swiss + imported renewables North Sea Morocco

choice experiment 1186 Swiss citizens

−1 1 2 3 4 5 6 7 8 9 10 − − −1 0 12 0 12 0 12 0 12 0 12 0 12 0 12 Hours − − −

Technologies

Gas Hydro dam Pumped storage (Cons) Pumped storage (Prod) Run−of−river Wind offshore Wind onshore Demand −1 1 2 3 4 5 6 7 8 9 10 0 12 0 12 0 12 0 12 0 12 0 12 0 12 Hours − − −1 0 12 0 12 0 12 0 12 0 12 0 12 0 12 Hours − − −1 1 2 3 4 5 6 7 8 9 10 GWh − −

3 2

North Sea wind imports in Winter

Díaz et al, 2017

−2 −1 1 2 3 4 5 6 7 8 9 10 11

0 12 0 12 0 12 0 12 0 12 0 12 0 12 Hours GWh − −

−2 −1 1 2 3 4 5 6 7 8 9 10 11

0 12 0 12 0 12 0 12 0 12 0 12 0 12 Time − − − − − Demand

− −

Technologies

CSP Gas Hydro dam Photovoltaic Pumped storage (Cons) Pumped storage (Prod) Run−of−river −

Technologies

− − Hours

Moroccan CSP imports in Summer

Díaz et al, 2017

100% renewables is not a problem for Switzerland

Wind and/or CSP can cover demand

• Complementary production profile, mix is cheaper

Not enough hydro to cover all PV without batteries Rooftop PV and imported wind are generally supported (Plum et al., in preparation)

Where do the Swiss prefer their infrastructure?

PV in industrial areas Wind around ski resorts PV in remote mountains Wind in outdoor sports areas Power lines near residential areas Wind in residential areas Wind in nature reserves Power lines abroad

Plum et al., in preparation

25 50 75 100 25 50 75 100 % %

3400 TWh 2800 TWh 380 TWh 30 TWh Economically competitive (2030) Swiss scenario scaled to EU population Built & planned capacity (2016) Swiss imports in scenario (C) (2035) Wind offshore in Europe

We have enough space

Rooftop & facade potential: 4.4 TWh

Needed for ES 2050 Useable - Compagnon, 2004 Useable - IEA-PVPS, 2002 Díaz et al, 2017

2035 (A) Gas intensive (B) Gas as bridging fuel (C) 100% renewables Commercial costs contracted in 2017 under ideal conditions

Cost implications

Díaz et al, 2017

Risks of low-carbon transition in Poland

Climate change impacts on hydropower

Knüsel et al., in review with Climatic Change

W ha t a bo ut co untries witho ut 60% hydro po wer? Poland United Kingdom … everywhere in Europe except Switzerland and Norway

Renewables vs. base load

Electricity for a midsummer week in the UK electricity system Gas + Renewables 40 GW of Nuclear

Making PV less intermittent

Making CSP less intermittent

Pfenninger et al., 2014

Making wind power less intermittent

Grams et al., 2017

4 4

Do we need gas as a bridging fuel?

Not in Switzerland, gas would be more expensive Probably not elsewhere Coal and nuclear face unfavourable conditions in open EU power market Wind turbines and power lines near residential areas are not easily accepted

4 5

Thank you

Questions? Comments?

• Oscar van Vliet (New Risks, TRANSrisk) oscar.vanvliet@usys.ethz.ch
• Paula Díaz (New Risks)

paula.diaz@usys.ethz.ch

• Stefan Pfenninger (Calliope) stefan.pfenninger@usys.ethz.ch

References

Díaz et al., 2017, Do We Need Gas as a Bridging Fuel? A Case Study of the Electricity System of Switzerland, http://dx.doi.org/10.3390/EN10070861 Knüsel et al., 2018, Changing Seasonality of Hydropower Production Facilitates the Integration of Large Shares of Solar Energy, in review Plum et al, 2018, Same but Different – Public preferences for the Swiss electricity system after the nuclear phase-out: A choice experiment, in preparation Pfenninger et al, 2014, Vulnerability of solar energy infrastructure and

• utput to climate change, http://dx.doi.org/10.1007/s10584-013-

0887-0 Grams et al, 2017, Balancing Europe’s wind-power output through spatial deployment informed by weather regimes, http://dx.doi.org/10.1038/nclimate3338

Electricity costs

4 8

Technology costs

4 9

Risks of low-carbon transition in Poland

5

5 1

5 2

A case study of the electricity system

Oscar van Vliet / CP / D-USYS

Do we need gas as a bridging fuel?

Transitions Pathways and Risk Analysis for Climate Change Mitigation and Adaptation Strategies Presentation to COP 23 side meeting – 10 November 2017 Professor Gordon MacKerron, SPRU, University of Sussex

Nuclear power in the UK

• UK commitment: 80% emission reductions relative to 1990; 57% by 2032
• For 2050, implies carbon–intensity per unit GDP less than 10% of 1990 level
• Since 2008 new nuclear power a major element in UK policy
• This commitment reaffirmed in October 2017 Clean Growth Strategy
• UK alone among EU-28 in planning for a significant growth in nuclear –
• riginally 16GW by 2030
• UK expectation (Committee on Climate Change) of large growth in

decarbonised electricity, with electricity then ‘invading’ heat and transport uses

UK CONTEXT

• Interrogating risks and uncertainties in climate change pathways
• Nuclear power case study for UK
• Process has been to engage stakeholders, develop scenarios/narratives,

model them and then get further stakeholder feedback

• Stakeholder input suggested two pathways to 2050
• one with no new nuclear
• the other with 40GW of new nuclear
• Here we look at 40GW pathway (= c. 2 GW/year from late 2020s)

TRANS RISK AND NUCLEAR POWER

• Stakeholders all had expertise but held a wide diversity of views on nuclear
• Despite differences of view, there were nevertheless common elements in

their views on risk and uncertainty

• There was a widely shared view that political leadership had been weak and

that more consistent, long-term commitments were needed

• There was also some shared scepticism about the value of the modelling

results

• In particular, model runs did not incorporate large growth in electricity demand
• Models also did not handle the kind of disruptive change often witnessed (e.g. electric/diesel car

developments)

R ISKS AND UNCERTAINTIES IN 40GW

NUCLEAR PATHWAY: STAKEHOLDER VIEWS (1)

• Lack of coherent long-term political support was regarded as the main

risk

• The second most important risk was the high costs of current

reactors, potentially aggravated by new safety/security needs

• The cost point led to further issues
• A new finance model was needed to reduce the cost of capital. This meant that

some public financing was needed, and possibly some cost pass-through in advance

• f construction completion
• Some took the view that Small Modular Reactors (SMRs) were necessary to reduce

size of financing obstacle

• But others were sceptical that SMRs would be developed cheaply

R ISKS AND UNCERTAINTIES IN 40GW

NUCLEAR PATHWAY: STAKEHOLDER VIEWS (2)

• There were signs that industrial policy was emerging (sector deal with

nuclear industry) and R&D commitments to nuclear were rising

• Social acceptability was unlikely to be a major problem, either for reactors
• r waste. UK public opinion had little concern over nuclear (e.g. hardly any

post-Fukushima reaction)

• The need for ongoing skills/resources to support military policy gave some

protection to civil activities

R ISKS AND UNCERTAINTIES IN 40GW

NUCLEAR PATHWAY: STAKEHOLDER VIEWS:

S OME LESS IMPORTANT RISKS

• The biggest risk to nuclear expansion was lack of long-term political support
• This was followed by issues of high cost, to which there might or might not be

remedies

• Other risks were less severe (social acceptance); and military needs gave

some comfort to civil sector

• Recent developments including Clean Growth Strategy reaffirm Government

commitment to nuclear, including long-term R&D and SMR development

• Perhaps the most surprising stakeholder result was lack of attention to

international context (e.g. UK isolation in EU/OECD on nuclear; difficult financial position of major vendors)

C ONCLUSIONS

• How would be the UK energy sector without nuclear?
• Are fossil fuels away of any strategy?
• Is the UK ready for a renewable expansion strategy?
• What would be the biggest risks to fulfil UK electricity demand (society

changing energy behaviour, rapid emergency of electric cars, electrification

• f trains, electricity storage, etc.)?
• Are renewables firms (and their supply chains) ready for full expansion

including transmission infrastructure?

S TEPS AHEAD