Highlighting the Costs of Tar Sands Exploitation

Geographical location:

North America > North America > Canada

Summary

The extraction of oil from tar sands can generate excessive amounts of greenhouse gas, compared to other methods of oil extraction.

This project seeks to work with investors to highlight the risks associated with investments in the tar sands, in the hope of influencing oil companies to re-evaluate their plans for expansions of this unconventional source of oil.

Background

Tar sands, also known as oil sands or bitumen sands are found in large quantities in Canada. Higher oil prices mean that it is now profitable for oil companies to extract sand from the tar sands and the tar sands of Canada are a major source of oil.

Most of the oil sands of Canada are located in three major deposits in northern Alberta. These are the Athabasca-Wabiskaw oil sands of north northeastern Alberta, the Cold Lake deposits of east northeastern Alberta, and the Peace River deposits of northwestern Alberta. Between them they cover over 140,000 square km - an area larger than England.

However, extracting oil from tar sands comes at a heavy cost. Making liquid fuels from oil sands requires energy for steam injection and refining, generating two to four times the amount of greenhouse gases per barrel of final product as the production of conventional oil. In addition there are all the other adverse effects of mining non-renewable resource development projects including pollution of land and rivers with toxic chemicals.

Rapid expansion in the tar sands is being financed by funds from institutional investors with pooled resources, such as pension funds. These investors are largely unaware of the carbon risks associated with their investments.

This project aims to educate the financial and investment community about the environmental and social risks posed by the tar sands and translate these into real business risks.

In addition, WWF Canada will work with WWF Norway to initiate a legislative debate on tar sands investment of state owned tar sands operator Statoil-Hydro.

Objectives

1. Quantify the environmental and social risks of exploration of the tar sands.
2. Engage investors regarding environmental and social risks of investing in the tar sands.

Solution

Commission a study to assess the degree of carbon risk posed to institutional investors. Companies will be asked to participate in the case studies. It is hoped that by assessing the carbon footprint of a portfolio, we can introduce climate change analysis to the investment process.

The purpose of this report is to:
- Identify the carbon exposure of Canadian institutional pooled investment products.
- Raise awareness in regards to the findings.

Achievement

1. A report "Carbon Counts: assessing the carbon exposure of Canadian institutional investment portfolios" was released.

2. Findings of the study were presented at 3 workshops