Math doesn't add up

Recall the report that compared the actual carbon intensity of both oil sands and conventional fuel, the one that said oil sands is 23 per cent worse for the climate.

According to the report's author, Stanford's Brandt, the actual carbon intensity of oil sands fuel should be somewhere around 107.3 g/MJ.

But the B.C. government considers all gasoline, oil sands or not, to have the same carbon intensity, 90.21 g/MJ.

Here is why that is a big deal. If you're a fuel supplier that puts only oil sands gasoline onto the provincial market, the true carbon intensity of your product would resemble Brandt's 107.3 g/MJ figure.

And reducing that number to the province's target of 73.82 g/MJ by 2020 means your fuel supply has to get about 31 per cent cleaner, a serious undertaking.

You'd have to put real pressure on oil sands producers to clean up their acts, and start blending millions of litres of low carbon biofuels into your gasoline supply.

Instead, the B.C. government has decided that the carbon intensity of your oil sands gasoline is going to be 90.21 g/MJ on paper, not the more accurate 107.3 g/MJ.

The government has essentially granted you, the oil sands fuel supplier, a huge freebie. Because now you only have to make your gasoline 18 per cent cleaner in order to reach the 2020 target, instead of 31 per cent.

That's also 17 grams of carbon per mega-joule wiped off the province's carbon books. But not out of the atmosphere.

Those emissions are still being pumped out of upgrader smokestacks and vehicle exhaust pipes, contributing to rising global temperatures.

Let's assume that half of the 4.4 billion litres of gasoline consumed in B.C. each year comes from Alberta's oil sands (a not unreasonable estimate).

Arbitrarily reducing that gasoline's carbon intensity by 16 per cent, as the B.C.'s fuel standard does, ignores annual emissions equivalent to those from 255,647 passenger vehicles‚ roughly three times the number counted on the streets of Kelowna, B.C., in 2007.

You could expect a similar, though slightly smaller, figure for diesel. (A sidebar accompanying this story shows The Tyee Solutions Society calculations.)

"This is a gaping loophole," Environmental Defence program manager Gillian McEachern told The Tyee Solutions Society. "We're concerned that B.C.'s fuel standard won't achieve what the province says it will."

BC policy a 'hundred pound weakling'?

The scenario described above may be extreme, but it's where the B.C.'s road fuel sector is heading.

The province gets the majority of its gasoline and diesel from three Edmonton-area refineries.

Two of these (owned respectively by Shell and Suncor) process exclusively oil sands crude, while the other (owned by Imperial Oil) relies mostly on light, conventional oil.

The remainder of B.C.'s fuel needs are met largely from a Burnaby refinery operated by Chevron, which refines a mix of oil sands and conventional.

As supplies of the latter continue to dwindle across Alberta, the province's vast bitumen deposits will almost surely make up the difference.

Natural Resources Canada predicted as much in a 2008 report, stating that the oil processed by western Canadian refineries "will continue to get heavier in the coming decade."

Indeed, a recent federal agency report estimated that oil sands production is set to triple by 2035, while conventional Canadian production is tailing off.

As fuel suppliers bring more and more oil sands fuel onto the market, the carbon gap created by the B.C. government's fuel standard on average will also grow, leaving tonnes of emissions unaccounted for.

California's low carbon fuel standard (as well as pending European Union legislation) contains a solution to this loophole.

Instead of just one carbon intensity value for gasoline, and another for diesel, policymakers are creating a separate, relatively higher oil sands value.

Suppliers are free to sell whatever kind of gasoline and diesel they want. But if they intend to meet fuel standard targets, and avoid fines, they'll probably try to sell as little oil sands fuel as possible.

In theory this will have a cascading effect, with oil sands producers pushing hard for innovations that make their operations less damaging to the climate.

There's already evidence this could be happening. Cenovus Energy Inc., a major oil sands producer, announced this October that several of its operations now have a low enough carbon footprint to meet California's standard.

But those types of changes are unlikely to be spurred by B.C.'s policy, which "does not incentivize refiners to switch to lower-emissions crudes or to pursue energy efficiency improvements," according to a 2010 IHS-CERA report.

"Compared to the muscular version pioneered by Governor Schwarzenegger in California," said Environmental Defence's McEachern, British Columbia's policy is "a hundred pound weakling."

Industry fights back

You might think that western Canada's largest refiners would support a "weakling" fuel standard that doesn't target Alberta's oil sands.

But at the recent Pollution Probe-hosted conference in Victoria, the Canadian Petroleum Products Institute, a refining industry trade group, still fought hard against the legislation.

"The target is very optimistic," reads a presentation from Ted Stoner, the group's western Canadian head.

And in a sense the oil and gas industry is right. Its members don't necessarily control whether B.C. embraces electric vehicles, or develops the truly low-carbon bio-fuels deemed necessary to fight global warming (see sidebar).

Yet a tough low carbon fuel standard, such as the one being implemented in California, could potentially force innovative responses to those changes and help bridge the transition to a clean energy economy.

As it stands now, that doesn't seem too likely.