Doomsday Kyoto scenarios disappearing

Scott Harris, AFL Staff

The tone of some of the harshest critics of the Kyoto Protocol has begun to soften since the Federal government ratified the agreement, which commits Canada to reduce greenhouse gas emissions by 6 percent below 1990 levels by 2012.

Calgary-based Suncor Energy Inc., the largest producer in Alberta’s oil sands, has announced that complying with the Kyoto Protocol will cost it no more than 27 cents a barrel in 2012, and the cost could be as low as 7 cents a barrel.

"It’s manageable," said Gordon Lambert, VP of sustainable development for Suncor.

Saying that complying with Kyoto will cost at most $49-million a year in 2010 and perhaps as little as $13-million, Suncor admitted that even the worst-case scenario won’t have a "material impact" on operations.

Federal Environment Minister David Anderson welcomed the announcement saying, "at this point, the dagger of truth has to sort of burst the bladder of misinformation."

Anderson was blunt in his comments regarding those who waged the anti-Kyoto campaign in the months leading up to the ratification vote. "We’ve been subject to – and I am using my terms advisedly – a con game," he said.

Even Premier Ralph Klein, whose government spent millions on an anti-Kyoto campaign, seems to have softened his tone somewhat, telling US investors that Kyoto will not kill investment in Alberta and delaying announced plans for a constitutional challenge.

Another vocal critic of Kyoto, Canadian Natural Resources Ltd. announced its maximum costs resulting from Kyoto will be even lower per barrel than Suncor’s.

French energy company Total-FinaElf has also announced that it has bought a 43.5 percent stake in a billion dollar oil sands project, signalling that it believes Kyoto will not have a major impact on oil sands operations.

Analysts point to moves by the Federal government, including a ceiling on required reductions by large emitters and the guarantee that emissions credits will not cost more than $15, for the about face by industry.

"It’s not nearly as ominous as it was previously," says analyst Tom Ebbern.

Robert Hornung of the Alberta-based Pembina Institute said that Suncor’s announcement puts to rest the arguments of Kyoto opponents. "It’s absolutely fair to say that if oil sands producers can live with this, it’s hard to imagine anybody who can’t."

"All the scenarios of economic Armageddon are now a fantasy."