The Pembina Institute put out a detailed report yesterday that looks at what it would cost to embrace “carbon neutral” oil sands development by 2020. The organization says it could be done for anywhere between $1.76 to $13.65 (U.S.) per barrel of crude oil by using carbon capture/storage techniques and purchasing carbon offsets, or a combination of both. It also says energy-efficiency improvements and fuel switching should be the first line of defense, but it didn’t include cost forecasts for those.

The way Pembina sees it, oil prices are high enough — around $58 a barrel today but near $80 not so long ago — and the big petro developers are profitable enough that becoming carbon neutral is doable, given that it costs less than $40 to profitably produce a barrel of crude from the oil sands. The group also said the costs, in some circumstances and depending on the approach taken, wouldn’t be that much higher than removing lead or sulphur from oil.

But the key is to act now, Pembina executive director Marlo Raynolds said. “So much of the oil-sands infrastructure is being designed, engineered and built now… We know that retrofitting later on is going to cost more money and be more painful. So there’s this huge opportunity to get it right.”

For additional info you can read my story today in the Toronto Star.

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