The Pembina Institute has released a report asserting that Alberta's oils sands development can affordably become carbon neutral by the year 2020 by employing carbon sequestration technology and purchasing offsets. The report, titled "Carbon Neutral by 2020", pegs the cost for carbon neutrality in the range of $1.76 to $13.65 (US) per barrel of crude oil.
So called conservative market champions will doubtlessly argue about the prohibitive costs of making the shift, but consider two points. First, investment in carbon neutral technology will be much cheaper if done now while new developments are being built, rather than upgrading existing facilities down the road. Second, and more importantly, there are plenty of dollars to pay for this technology.
The market price for crude at which tar sands developments are considered profitable are variously given as being between $20 to $28 per barrel. Put another way, as an oil company CEO you would gladly start a development project given a market price of $28 per barrel for your crude. However, surging world demand has sustained prices above $50, with no expectation of a significant decline. That $22 buffer zone represents pure additional profit that goes entirely to oil companies operating on a business model of environmental exploitation.
What policy makers need to decide is where that surplus is best spent - on ensuring a stable climate? Or in purchasing third and fourth homes for oil company executives.