Since President Obama entered office the subject of Canada’s oil sands and its environmental impact has been a thorn in the side of U.S.-Canada relations. First it was the president-elect criticizing the “dirty” oil sands during the election campaign. Then criticisms came from Capitol Hill politicians over the carbon footprint of the oil sands during discussions over building a new pipeline to haul more oil sands bitumen to U.S. refineries along the Gulf Coast. In recent weeks, the debate has been re-energized as some of the leading anti-oil Congressional leaders ventured to Canada. While in Canada, these American politicians agreed to meet with various parties involved in the oil sands development debate. From media reports and comments by people in attendance at these meetings, little progress was made by the supporters of the oil sands in swaying the views of these U.S. politicians, although two U.S. Senators have sponsored a bill to make Canadian oil sands production exempt from any import restrictions.
Speaker of the U.S. House of Representatives Nancy Pelosi (D-CA) and the head of the House energy independence and global warming committee, Edward Markey (D-MA), journeyed to Ottawa for a global political meeting several weeks ago. While there, Mrs. Pelosi had a discussion with three premiers of energy producing provinces, the Canadian environmental minister, and heads of several large energy companies including ones involved in oil sands development and bitumen shipping, and leading environmentalists. She even had a phone conversation with the Canadian Prime Minister Stephen Harper.
Mrs. Pelosi was quoted as saying she doesn't like "fossils" and doesn't care whose it is or where it comes from
It appears from the media accounts of the meeting that the anti-fossil fuel attitude of the ultra-liberal Democratic Congressional leadership was not modified by the discussions. Mrs. Pelosi was quoted as saying she doesn’t like “fossils” and doesn’t care whose it is or where it comes from. This is from a person who two years ago didn’t know that natural gas was a fossil fuel even though she and her husband had invested in gas exploration ventures!
While oil sands promoters have been trying to improve the public image of this important North American energy source, the most recent high-profile personality to criticize the resource was movie director James Cameron of Avatar and Titanic fame. He recently visited Alberta to tour the oil sands and met with Alberta Premier Ed Stelmach. While acknowledging the importance of the oil sands, Mr. Cameron is still not a fan, calling the extraction effort unfettered and appalling. But he did admit in comments to Time magazine that “I understand where they're coming from. We need (the oil sands) for energy security. That is something of an epiphany on this trip."
While acknowledging the importance of the oil sands, Mr. Cameron is still not a fan, calling the extraction effort unfettered and appalling
While supposedly not linked, but almost immediately following Mr. Cameron’s visit, Canada’s Environmental Minister Jim Prentice announced the establishment of an independent panel of leading scientists to review environmental monitoring in the oil sands. The review will be quick, a mere 60 days. The announcement of the federal panel caught Alberta by surprise as it had proposed a joint provincial/federal review. The federal review is being done in response to a recent study by University of Alberta biologist David Schindler, who found that the Athabasca River had elevated levels of poisonous elements such as mercury and lead.
The federal review is being done in response to a recent study that found the Athabasca River with elevated levels of poisonous elements such as mercury and lead
That study was followed in the past few days by one conducted by Environment Canada indicating that levels of toxic mercury in the eggs of water birds downstream from the oil sands developments seem to have grown by nearly 50% over the past three decades. While the study does not tie the increased pollution to the oil sands development, it does point to the Athabasca River as a source of some of the mercury.
Despite the best efforts of oil sands developers to improve the environmental footprint and perception of the resource, it will likely always remain controversial due to its historic image. The importance of the oil resource cannot be underestimated. With the economically-recoverable oil sands reserves, Canada has the second largest oil reserves (170 billion barrels) in the world, following Saudi Arabia’s 260 billion barrels. Estimates are that the three oil sands deposits – Athabasca, Peace River and Cold Lake – may contain as much as 1.7 trillion barrels of oil in place.
Production from the oil sands has grown over the years, and given projected spending on new projects, should continue to grow. It currently stands at about 1.3 million barrels per day. Projected production growth will put pressure on expanding the pipeline capacity to move more bitumen to the U.S. or for Canada to invest in upgrading capacity. It is this need for the pipeline expansion that is driving the increased political tension between the two countries. The dirty image of the oil sands output, coupled with dead birds in tailing ponds, has given ammunition to environmentalists and politicians who are anti-fossil fuel such as President Obama and his Democratic leadership pals.
On a well-to-wheel measurement basis, the carbon intensity of the oil sands falls within the range of carbon intensity for other conventional crude-based fuels used in the United States
According to government statistics, the oil sands account for only 5% of Canada’s total greenhouse gas emissions. Based on a study by Cambridge Energy Research Associates (CERA), on a well-to-wheel measurement basis, the carbon intensity of the oil sands falls within the range of carbon intensity for other conventional crude-based fuels used in the United States. Importantly, Canada will be producing an increasing amount of its oil sands production from deeper depths using steam-assisted-gravity-drainage (SAGD) as opposed to the well-known strip mining technique. According to the
Canadian Association of Petroleum Producers (CAPP) there are 35 billion barrels of mineable oil sands reserves, which are found at depths of less than 200 feet, while there are 135 billion barrels at deeper depths that will be produced by SAGD and variations of that technique.
While the pipeline battle has yet to be settled, the issue will become more acute in the future as major sources of oil supply to the United States from countries such as Mexico and Venezuela decline. Watch for the battle over the oil sands to heat up again next year as the new Congress and the president struggle with energy and environmental legislation.
G. Allen Brooks works as the Managing Director at PPHB LP. Reprinted with permission of PPHB.
More from this Author
Most Popular Articles
From the Career Center
Jobs that may interest you