September 29, 2009
Energy Security and Environmentalism Go Head-to-Head in Battle Over Oil Sand Reserves
Campaign & Advocacy
The nexus between energy security and climate change is again in focus, with the relocation of the UN’s climate talks from the UN General Assembly in New York to Bangkok for the final stretch of meetings before the December Copenhagen conference. One of the key challenges: considering that the transition to alternative fuels is still largely a distant dream, how do country’s limit carbon emissions from the largest new fossil fuel sources, including the massive oil sand reserves in Canada and Venezuela.
That issue was brought into focus in mid-September, when Greenpeace activists joined with other environmental groups, including the Pembina Institute, to blockade oil production from tar sands in Alberta, Canada owned principally by Shell, with Chevron and Marathon owning 20 percent each. They unfurled a huge banner over the site of oil exploration that has since been broadcast around the world proclaiming “Tar Sands: Climate Crime.” Greenpeace has blasted the tar sands project as “devastating and destructive” and says that it contributes to the climate change crisis, It was an argument that struck at the heart of Canada’s extractive industries, trying desperately to convince the public that the controversial project should proceed as planned.
What’s the story behind the story? Canada is experiencing a major oil boom from its large deposits of tar sands, although pressures to quickly exploit the reserves has faded slightly over the past year as oil prices have retreated. The worldwide demand for energy continues to increase, however, and traditional oil sources are diminishing.
Greenhouse Gas Problems
The mixture of materials that compose tar sands allows for the extraction of bitumen, a type of black viscous oil. Oil sands reserves have only recently been considered to be part of the world’s oil reserves, as higher oil prices and new technology enabled them to be profitably extracted and upgraded to usable products. The method of oil recovery from tar sands has risen to prominence as the introduction of high-tech equipments and improved mining methods allow in-situ production.
Many countries in the world have large deposits of oil sands, including the United States, Russia, and various countries in the Middle East. However, the world’s largest deposits are in Canada and Venezuela, both of which have reserves approximately equal to the world’s total known reserves of conventional crude oil. Because growth of oil sands production has exceeded declines in conventional crude oil production, Canada has become the largest supplier of oil and refined products to the United States, ahead of Saudi Arabia and Mexico. Estimates of Venezuelan production are not considered a reliable due to political problems within its national oil company.
The Canadian oil sands are buried below the remote Boreal Forest of northern Alberta and spread out over 138,000 kilometers of land (an area the size of Florida). At 173 billion barrels, Canada’s reserves represent the largest source of crude oil outside the Middle East. Although vital to the Canadian economy, their extraction is thought to be the crudest form of oil production, as it takes about four tons of tar sands to produce one barrel of synthetic oil. Like all mining and non-renewable resource development projects, oil sands operations impact the environment. The mining process roils the land and water, and releases carbon dioxide and other emissions. Oil sands extraction is generally considered, even by the industry, to be more environmentally damaging than conventional crude oil - carbon dioxide “well-to-pump” emissions for oil sands are estimated to be about 1.3-1.7 times that of conventional crude.
Oil sands production is expected to almost double in Canada by 2015, and is expected to constitute a large part of Canada’s greenhouse gas (GHG) emissions, with the amount expected to grow dramatically in the years ahead as the project moves forward. Global Forest Watch Canada, a campaigning NGO, has issued a blistering report claiming that the disturbance of trees, shrubs and peat, where biological carbon is stored, could release almost 9 megatons of carbon dioxide a year.
The protestors seem less committed to dialogue than confrontation. Shell Canada has expressed willingness to meet with the activists as the project proceeds. “We want to engage other NGOs and environmental NGOs,” said Shell Canada spokesman Paul Hege. “Our offer to discuss their concerns about oil sands developments and their vision for the energy future still stands. Greenpeace has not yet responded.
Growth vs. Environment?
Over just the past month, many countries have made commitments to push for climate-change plans, including Japan and China, both of which recently announced their willingness for a substantial reduction of emissions. The announcements are pressuring other countries, including Canada, to come up with their own agenda to improve the troubled environment. However, the estimated sizable boost of $123 billion to Canada’s economy by 2020 generated solely from tar sand oil production has convinced Prime Minister Harper to protect the oil sand industry, which will make his decision to contribute to green house gas rollbacks more difficult.
Going forward, the potential environmental impacts will be weighed against the energy security and economic benefits offered by these huge reserves. It’s been estimated that the oil sands could provide upwards of $500 billion for the North American economy and generate approximately 5.4 million person years of work through 2020—an enormous and positive jolt to the hard-pressed North American economy. Scientists are also dedicated to developing ways to soften the environmental impact of the extraction method, including a focus on nanotechnology, which can reduce the industry’s thirst for fresh water and remove many impurities that enter the environment due to extraction. With the political situation among OPEC countries fragile, western countries are looking for secure medium and long-term ways to address their countries’ energy needs. In that context, the Canadian reserves are strategically critical.
Jon Entine is a visiting fellow and Moon Doh is a fall researcher at the American Enterpise Institute.
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