A new report from RiskMetrics Group, a financial research firm, warns investors that some leading oil sands companies may be particularly exposed to financial risk from toxic waste water liabilities.
The report attempts to quantify the true cost of cleaning up billions of barrels of contaminated water resulting from the mining and refining operations of leading producers of oil sands crude. It was quietly released in December to RiskMetrics' private clients, and unveiled more publicly last week in a conference call. Titled "Oil Sands Tailings Pond Remediation Costs Understated," the report shows a handful of companies to be at a financial disadvantage because of their exposure to waste water remediation liabilities.
For example, for Suncor, currently the largest producer in the oil sands, water remediation could cost almost $2 million a week, or $104 million a year, according to RiskMetrics. That would erode the company's annual net income by 26 percent according to RiskMetrics' low-cost analysis. In the worst case, RiskMetrics says, the cost of cleaning up toxic waste water could completely wipe out Suncor's earnings.
After years of pressure from investors, environmental organizations and public interest groups, the U.S. Securities and Exchange Commission voted Wednesday to require publicly traded companies to disclose information regarding business risks and opportunities related to climate change.
Some companies already take climate issues into account and disclose their findings to investors, but the "interpretative guidance" issued by the SEC will require all public firms to do so.
This is the first economy-wide requirement that companies disclose their exposure to climate-related risks, according to Ceres, an NGO that has been leading the effort to pressure the SEC to adopt such requirements.
On the day after the standards were released, opinion was divided over the impact the new standards would have, with some critics complaining that they were unnecessary. Others saw it as the start of a broader transformation that would put new pressure on major polluting industries.
With Royal Dutch Shell announcing Monday that it would scale back the pace at which it develops projects in the oil sands of Alberta, discussion has revolved around whether this decision is more a product of environmental pressure or economic realism — or both — and what this means for the industry's involvement in environmentally and economically costly projects more broadly.
Peter Voser, CEO of Shell, told the Financial Times in London that unconventional resources such as the oil sands will be "developed but at a much slower pace."
Alberta’s sprawling tar sands region holds the second largest oil reserve in the world after Saudi Arabia, but investors lured by the promise of black gold should think twice about the environmental risks, a Canadian investment fund warns.
In a new report, Northwest & Ethical Investments LP describes how companies operating in the tar sands — including global giants BP, Shell and Total — are exposed to “litigious, regulatory, policy and social license risks,” and its says some of those companies are doing a poor job of disclosing that risk exposure to shareholders.
“As more companies enter the oil sands, and the contribution of oil sands to company reserves increases, more investors are becoming exposed to these risks, and the level of their exposure is increasing,” the report says.
As Washington is abuzz today with the introduction of the Senate's version of a climate and energy bill, 25 Greenpeace activists have taken climate action into their own hands in Canada.
Slipping past tightened security by floating stealthily downriver, they gained access to Suncor's massive tar sands facility and shut down two bitumen conveyor belts. The conveyors receive bitumen from the open pit mines along the banks of the Athabasca River and transport it to the upgrader for refining.
The action is being broadcast live on the web. The images being captured on cell phone video show activists scattered in positions across the large industrial construction with the conveyor stopped.
"We're sending a message to international leaders with Copenhagen less than 70 days away," said Bruce Cox, the Executive Director of Greenpeace Canada, who spoke to SolveClimate while watching the action from an inflatable boat on the Athabasca River. "This is not just about Suncor, or Shell but about our global addiction to dirty energy."
Cox said the activists are prepared to spend the night, equipped with food and safety gear. A growing international audience is tuning into the live stream to see what the police will do.
Canadian Prime Minister Stephen Harper is getting a chilly reception from environmental groups as he heads to the White House today to talk energy with President Obama.
An online ad campaign showing Harper in a cowboy hat suggests the prime minister is trying to undermine U.S. climate change legislation to protect the tar sands.
"As elected leader, he helped keep America addicted to oil," the environmental groups' ad reads. "Now he's pushing big oil's latest trick.”
Activists have been putting that message into 3D this week, starting on a bridge at Niagara Falls, where six Rainforest Action Network climbers hung a giant banner with arrows pointing to a “Clean Energy Future” south of the border and “Tar Sands Oil” pointing the way back to Canada.
Greenpeace went after the oil operations themselves. Two dozen activists snuck in amid the bitumen and giant machinery of a Shell tar sands operation in Alberta and chained themselves to a three-story dump truck and a hydraulic shovel.
Their message: Ripping up the boreal forest to extract some of the most carbon intensive oil on the planet is a climate crime.
As the global economic crisis has made all too clear, there is one choke point for almost any business: its source of financing.
Rainforest Action Network activists were thinking about that this morning as they hung a banner outside the Toronto offices of RBC, Canada’s largest bank and the nation’s biggest financier of efforts to extract oil from the Alberta tar sands.
The banner had its own unusual pressure point: It called on Janet Nixon, wife of CEO Gordon Nixon and a known environmental supporter, to persuade her husband to stop RBC’s financial support of the energy-intensive tar sands.
In a personal video plea to Janet Nixon at the Web site PleaseHelpUsMrsNixon, RAN Executive Director Mike Brune says:
“Your husband can make history. RBC can lead Canada towards a clean energy future, and you’re our best hope, Janet.”
Tar sands extraction and production are a significant source of greenhouse gas emissions, producing two to three times the greenhouse gases of conventional oil, polluting water supplies, and making it difficult for Canada to meet its climate commitments.
RAN sees a better way to power North America, but to get the Shells and Suncors of the world to move on to clean energy, it needs to turn off the funding taps for the tar sands.
Where the natural gas from the Alaska Natural Gas Pipeline will end up is a murky question tied up in a 30-year-old treaty, expansion of Canadian tar sands operations, and trends in natural gas supplies both in the United States and in Canada.
Environmentalists fear at least half of the relatively clean-burning Alaskan North Slope gas will end up fueling tar sands operations in Alberta, where the pipeline will end, instead of coming to the lower 48 states to replace carbon-intensive coal in power plants. The tar sands operations already consume about 20 percent of Canada’s natural gas, and they are expected to need as much as twice that by 2035.
Michael Brune of the Rainforest Action Network calls the pipeline "a stealth dirty oil mega-project … conceived by Big Oil.”
“Under Plan Palin, ExxonMobil and TransCanada would construct a 1700-mile natural gas pipeline from the Arctic, heading south,” Brune writes. “About half of it is likely to be siphoned to help produce the dirtiest oil on earth.”
Canada's Conservative government is funneling two-thirds of its $860 million "clean energy" fund into carbon capture and storage (CCS) technology. Most of that $580 million is headed to Alberta to clean up the province's dirty tar sands operations, which emit more global warming gases than the entire nation of New Zealand.
If it sounds like hogwash, or rather greenwash, it is.
The tarry bitumen of the oil sands is one of the world's filthiest hydrocarbons. Mining it produces two to six times more greenhouse gases than light oil.
In theory, CCS, or so-called "clean coal," could strip carbon from exhaust gases, pipe it away and bury it in depleted oil and gas reservoirs elsewhere in Alberta. But that doesn't hold up in practice, and there's no evidence that it ever will.
"Few people in this room can truly appreciate what this award means to the people of Alberta."
That was Alberta’s Energy Minister Mel Knight speaking last night as he accepted an environmental award from the Aspen Institute. You'd think it was the year 2030, the world had gotten a leg up on climate change, and Alberta had played an instrumental role. Fade in the sentimental music, take out the handkerchiefs, cut to commercial.
No such miracle, alas. Instead, a large and disturbing dose of wishful thinking: an award given for an effort that has barely begun — Alberta’s Carbon Capture and Storage Initiative — involving the largest and dirtiest energy project on the face of the Earth. The tar sands-supporting government of Alberta was being honored alongside true climate leaders Van Jones and A123 Systems for its supposed good intentions, which many environmental groups fear is merely a greenwashing campaign.
Environmentalists in the room cringed, but others at the forum must have appreciated that award as much as Alberta did – starting with the forum's corporate sponsors: Duke Energy, Shell Oil and General Motors.
.jpeg "Report Warns Oil Sands Investors of Toxic Wastewater's Financial Risk")
