To allay both energy security and climate change concerns, Levi recommends linking the cap-and-trade systems the two nations are both likely to develop but taking care that oil sands producers are freely allocated a sufficient amount of allowances at the start of the system. Imposing immediate costs on oils sands producers will only benefit lower-cost producers like OPEC and would have little impact on curbing greenhouse gas pollution.
Lawmakers should also steer clear of any low-carbon fuel standards that discriminate between conventional and unconventional fossil fuel sources, as they "would exacerbate energy security problems without delivering compensating climate benefits," Levi says.
The United States also should not invest heavily in carbon capture and sequestration technology aimed specifically at the oil sands, as the Canadian and Alberta governments already invest substantial amounts, and should focus instead on carbon capture and sequestration for power generation.
The International Energy Agency estimates the amount of recoverable reserves trapped in the oil sands at about 170 billion barrels, putting Canada second only to Saudi Arabia in oil reserves. IEA believes the sands could very well hold almost 1.7 trillion barrels of oil in total.
Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500