Canada’s Troubling Tar Sands – Maybe Now is the Time for a Rethink?

Posted by on August 18, 2012
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It’s rare that I turn to the business pages to find inspiration concerning our environmental crisis.  But today’s Globe & Mail carried two stories that cheered me up a little concerning Canada’s tar sands oil.  Yes, Canadians are blessed with enormous reserves of oil in the Athabaska tar sands, but it is enormously costly to get the oil out of the tar (actually they start by getting the tar out of the sand, then squeeze the oil out of the tar).  As I detailed in Our Dying Planet, it costs the energy of two barrels of oil to produce three barrels of oil from the tar sands, plus an inordinate amount water, nearly all of which must then be permanently stored because it is contaminated and cannot be cleaned.  Tar sands oil is far and away the most energetically expensive to produce (which is why we still have all those tar sands deposits lying about the Alberta landscape in the first place), and in producing it we are adding unnecessarily to Canada’s greenhouse gas (GHG) emissions while also robbing our rivers of water.  Since Canada currently ranks high among nations in its per capita rate of emissions of GHGs, and since we would still be a net exporter of energy without the current yield from the tar sands, I do not think we should be mining them.

The Harper government, the Alberta government, and a suite of multinational oil corporations clearly do not agree with me.  Indeed, the Harper government’s view has been clearly that not only must we produce tar sands oil, we must ramp up production as quickly as possible towards a tripling of current production levels.  Hence the XL Keystone pipeline to Texas.  Hence the Northern Gateway pipeline to the British Columbia coast.  Hence the angry claims that anyone who opposes these pipelines is a traitor, a terrorist, or being funded by foreign money.  And the Harper government stance has been endorsed all the way by the multinational oil corporations.

I have not been alone in attempting to articulate the view that Canada’s tar sands oil will only get more valuable the longer it is left in the ground.  Oil will likely always be needed by the chemical industry, long after we stop using it as a convenient, if GHG producing, fuel.  Nor have I been alone in suggesting that Canada should stop relying on the export of raw materials (such as crude oil), recognize it has a well-educated but under-employed population, and export higher value, processed materials and finished products.  We need to build a knowledge economy, and stop being peddlers of raw materials.  But such arguments generally fall on deaf ears.  It’s easier for multinationals to dig it up and ship it out, than to invest in the processing plants that would need to be built to process raw materials in Canada, so they encourage governments to believe that it is somehow not in Canada’s interest to build a more knowledge-intensive economy for itself.

But today, some glimmers of hope that help is coming from the business community itself.  Now, bear in mind that I still do not believe we should be mining the tar sands until it can be done in an environmentally sustainable manner, and after we have real plans in place to reduce our GHG emissions aggressively.  But I admit that we are currently mining them, and they do contribute to the strength of our economy – a not unimportant factor in today’s world.  Given that we are mining the tar sands, would it not be better to process the crude ourselves, and ship refined products that are potentially less environmentally damaging?  On face value, David Black is proposing to do that.  As reported in the Globe & Mail, he is proposing a $13 billion investment in a refinery to do just that.  Of course he is proposing to site his refinery on the British Columbia coast at Kitimat when logic would put the refinery in Athabaska region along with the rest of the mess.  He has an idea for an investment – it still needs a bit of tweaking, but it should not be dismissed out of hand by the environmental community.

The second story on the same page has me even more optimistic.  The CIBC World Market report has just been released.  It shows that there is now a glut of oil on the North American market, due primarily to the ramp up in oil exploration/extraction within the US itself (shale oil and deep offshore oil), and the even greater ramp up in US gas production (made possible by the use of fracking technology).  In addition, impediments to quick approval for new pipelines due to growing opposition from the public mean that oil produced in Alberta already saturates available ways of shipping it off to refineries elsewhere.  The glut lowers prices, reducing the incentive of operators to expand tar sands projects, and the lack of pipeline capacity also forces a readjustment of plans for expansion.  While the glut of oil and all that fracked gas mean that globally our addiction to fossil fuels is still being encouraged, Canada’s plans for expansion just got slowed down.  Clearly this is a good news, bad news story, but lets focus on the good news for a moment at least.

Canada needs to seriously rethink where it is headed in terms of its energy sector.  All countries need to do this, and some are beginning to do so.  Others are not, and Canada has been notable in its reluctance to discuss, let alone to put in place, serious plans to cut GHG emissions.  We have great opportunities in nuclear, in wind, solar and geothermal energy.  We have way more we could be doing in energy efficiency.  And we have everything to gain as a nation by getting back into the group of forward-thinking countries that will lead this essential transition.  The likely reduction of enthusiasm for expansion by current tar sands operators removes the pressure on governments to push aggressively for pipelines that citizens do not want, or to continue the myopic focus on tar sands oil as the solution to our energy needs.  The possibility that there is an individual in Canada willing to make a business investment that will begin the process of developing a refinery gives the government some flexibility in how it positions itself as the path forward is changed.

Lest any reader misunderstand, I remain convinced we should have left the tar sands underground, and totally convinced that we have many reasons to move away from fossil fuels as quickly as we possibly can.  And if the global oil market, or a Canadian investor with a new idea, can help shift attitudes, maybe some new ideas can come forward.

And just to bring this all back to environment and global change and the fact that there is growing urgency….  The following image appeared in an important article published in the journal Nature this June.  The title of the article is “Approaching a State Shift in Earth’s Biosphere”  The figure depicts a hypothetical tipping point for the biosphere in which conditions are changed sufficiently by us that the system reorganizes as a substantially different system with different rules and different opportunities and costs for us.  The characteristic of a tipping point is that it is very difficult to move back to the way things were once it has tipped.

 

The article, by a group of respected environmental scientists, explores the possibility that global change has proceeded so far that we now may be in, or approaching, a situation where the entire earth system could undergo a rapid shift of state from the kind of place we have occupied since the end of the Pleistocene 10 thousand years ago, to a radically different kind of place that will challenge our economy, our cultures, and our civilizations.  The authors include human population growth, growth in per capita consumption of resources, climate change, and all the lesser stressors we are putting onto the biosphere in the term ‘global change’.  It’s a thought-provoking, even alarming, article published by serious scientists in a prestigious, peer-reviewed scientific journal.  That it was even published is evidence of how far down the road towards a bad future we have already moved.

Nature is a ‘by subscription’ journal, although individual articles can be purchased.  I will discuss this and a more recent article dealing with the current state of the world’s oceans in my next post.

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