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Transportation Fuel Standards – Something to worry about or not

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The third largest user of transportation fuels is California, behind the rest of the US and China. And apparently noises of a Low Carbon Fuel Standard in California, similar to the US defense fuel standard banning oil sands oil in federal vehicles, have the Alberta oilmen scared. See here:

the Low Carbon Fuel Standard, a new regulation that could fast-forward Canada’s carbon-intensive deposits into extinction before they reach their potential….

… The Alberta oilmen are there for damage control. Canadian producers are investing billions of dollars on new oil sands projects aimed at supplying oil primarily to the U.S. market, but which generate more greenhouse gases than other sources.

Scary stuff if you are sitting on billions invested…or is it? The article goes on to say that currently no Canadian oil is being exported to California. If this is the case, one has to wonder why this is a big deal? The way current Alberta and CND federal policy is going, new oil sands facilities will be required to significantly reduce their emission intensity through carbon capture, or some other lower carbon energy (nukes). So you have to wonder why get uptight over a potential export constraint that may actually be an export opportunity for new facilities who have lower emission intensities. phew.

And herein lays the myth. If California is such a goldmine for selling low carbon fuel, then why worry? With CCS coming, is there not unlimited opportunity to sell low intensity oil to California? Is this not a benefit of cleaning up our emissions and the current regulations? It seems that a more balanced view is US low carbon US fuel standards present an opportunity. But no, I guess that would not sell newspapers. And yes, you have to also believe in the credibility of the CCS regulations and the California policy.

Perhaps the only clear observation from this is that oil sands project planners must down Tylenol by the handful.

Written by Dave Sawyer

November 2nd, 2008 at 3:09 pm