IMPERIAL OIL LIMITED 
PROPRIETARY .

Detailed Issue Summary
GLOBAL WARMING CLIMATE CHANGE

Overview of Issue

Ll Canada contributes only about 2% to gIObaI C02 911115510115 from energy use bUt
critics point to Canada's very energy intensive economy in terms of COz/capita;

#6 in terms of EB of 

3 Canada continues to be viewed as a "hawk" on this issue. Federal government
made an early commitment to stabilize greenhouse gas emissions -- measures to

achieve remain incomplete.

Canada committed to stabilizing CO2 and other greenhouse gas emissions at 1990
levels by the year 2000 at a UN. conference in Bergen, Norway in May, 1990 
at recent Council of Canadian Ministers conference, overall agreement to test achievement
of Liberal Platform objective of 20% reduction over 1988 by 2005.

 

:1 Canada signed the Climate Change Convention at the UN CED "Earth Summit" in
Rio Delaneiro in June, 1992:

- Also reconfirmed target and timetable per the Bergen commitment even
though Climate Change Convention less firm (Bergen commitment aimed at
stabilizing emissions while Convention aims at stabilizing concentrations in the
atmosphere -- a much more serious/difficult objective requiring potentially as high
as 60 We reductions in C02 emissions levels over 1990)

- Tabled a "Quick Start Agenda" with commitments to quickly ratify the
convention by year end 1992 and to prepare a'national report on emissions and
reduction measures planned by June, 1993 -- Draft National Report issued in
October 1 993 identifying significant gaps to close on stabilization.

Cl Canada's plans to achieve the stabilization target not yet firm:
- Federal government?s "National Action Strategy on Global Warming" of 1990
proposed a phased, progressive approach, with first steps being those that
make sense in their own right energy efficiency).

- Federal government's projections (1990) show C02 growth rate of year
over 1990 to 2000 period in a "Business as Usual" case:

- Most recent forecasts in Draft national Report are for 1.0% /year growth to 2000 
reconfirming earlier forecasts on potential gaps.

GLOBALWMDOC LBS Revised: 11/29/93

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STABILIZATION
20_00  COMMENTS
Busmess as Usual" 461 562 90-100 GDP growth 
- WTI in
.. 2000 (198933)
Economic? Energy 461 510 45-50 - Only 50% of gap
Eff1c1ency Steps closed
apphed
- Key recommendations of Draft National Report include:
0 Transportation - transportation demand management practices
(32% C02) - alternatives
- ride sharing routing efficiencies
- driver education
0 Energy Supply - demand-side management
(20% C02) - co?generation
- nuclear hydro
Res/Comm Use - improved energy e??iciency
(15?18% C02)
0 Industrial Use - large equipment efficiency
?3 (22-25% 02) voluntary energy conservation

(measures very similar to proposed LLS. programs) I

- New National process has been struck to address C02 and other 
projections, possible reduction measures and macro-econ .
National Air Issues Coordinating Committee Taskgroup on Gigi
(Significant that of all air issues, only climate change taskgr, I 
this time)  
Concern over talk of votentail use of energy tax as replaceme 
within the Liberal Caucus 

Potential Impact on Imperial/Exxon

CI From a national standpoint, an IOL commissioned 
DRI /McGraw Hill showed that very high levels of 
a C02 stabilization target:

A carbon tax building up to $200/ tonne of 
emissions (1/3 reduced economic activity, 1?
- Reduces Canada's GDP by $100 billion (re

[3 Translating the DRI carbon tax impacts to
12% reduction in revenue, 
. second order effect on margins.

 
 

GLOBALWMDOC LBS Revised: llf29/93

     

and influence supply mix could

iosition ot increased taxes to dampen demand a
1v costs of energy intensive/higher carbon content fossil 
lied to natural gas fuel would increase

lin}
increase the relative supp
luels such as oil sands. The URI tax app
bitumen production costs by about 55/8.

_C(_rporate Position

101. has lobbied for a cautious and flexible response with two major public

discussion papers in 1990 and 19% and extensive discussions with government,

thought leaders and the media:
Many uncertainties, doesn't warrant drastic steps at this time.
- Makes little sense to act unilaterally to respond to a global issue.
- l-?ocus should shift to all greenhouse gases, sources and sinks, not just C02

production from energy use.

Basic Strategy/Action Plan

LJ Continue to press lOL's well developed and broadly communicated position aimed
at limiting non market-driven response steps at this time:

Stress relative certainty of the debits to Canada?s precarious economy and
international competitiveness versus the uncertainty in environmental benefits. 

Share energy supply/ demand outlooks with Energy Mines and Resources.
Participate in voluntary industry initiatives to foster economic energy
efficiency steps as a best defensive strategy (support revitalization of Canadian
Industrial Program for Energy Conservation which was created after the oil
price shocks in the 1970?s - now called Minister's Advisory Council on Energy
Efficiency in Industry)

Direct participation in Energy Industry Taskforce on Climate Change as input to
broader national process -- in partnership with industry associations.

Inter-regional Coordination

 

Cl Continue to co-ordinate outlooks and positions through Exxon's Environment and
 Safety and Corporate Planning networks.

[3 Could benefit from Exxon corporate-wide view on the appropriate emphasis for
 energy efficiency in business planning and in competition for capital funds.

Environment Safety Dept.

File: GOV . I
General  

Issues Overview

GLOBALWMDOC LBS Revised: 11/29/93