Canadian Oil Sands Unfairly Tainted By BP Fiasco
June 21, 2010
Gordon Pape is editor and publisher of The Canada Report.
The town of Bellingham, Washington (population 75,000) made news recently when the local council passed two resolutions effectively banning the use of fuel derived from the Canadian oil sands (or "tar sands" as environmentalists prefer to call it).
The town banned the use of petroleum from refineries that process oil from the region, citing what one resolution called “permanent damage to Canada’s Boreal forest ecosystem and the Athabasca River ecosystem, destruction of scarce freshwater, generation of toxic waste.”
You have to know the Silly Season has officially arrived when this sort of story creates an international flap. Every day, we hear increasingly ominous reports of the long-term effects of the BP (BP) oil spill in the Gulf of Mexico. Untold millions of sea creatures are dying. A vibrant ecosystem is being destroyed. Thousands of jobs are being lost, perhaps forever. The richest sea food industry in North America is being ruined. Pristine beaches will be defiled for years. One ecologist was quoted as saying the spill will turn the Gulf into a "black hole."And Bellingham's city fathers are worried about the oil sands? A resolution banning the use of any petroleum derived from offshore drilling would have been more to the point.
One of the promoters of Bellingham's actions, Nikki Skuce of ForestEthics told local media: “The tar sands industry saw BP’s oil rig blow out as a blessing--spinning it as a cleaner, safer option to off-shore drilling. Bellingham’s resolutions as well as actions taken by Fortune 500 companies show that cities and companies are not buying Canada’s tar sands PR machine.”
Which PR machine are they buying, then? The one that says despite the BP disaster offshore drilling poses less of a threat to the environment than the oil sands? Let's get real!
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Of course, Bellingham is not alone in its actions. Employees of Lush Cosmetics staged a two-week anti-oil sands campaign in the company's 150 stores across North America, with some wearing only mock-ups of oil barrels to attract attention. "Brave Protestors Strip to Skivvies to Protest Tar Sands. Would You?" trumpeted environmental Web site Treehugger.com.
Earlier this year, Whole Foods (WFMI) became the first Fortune 500 company to announce it would attempt to reduce its consumption of fuel derived from the oil sands. As far as I can tell, the firm has said nothing about fuel from offshore rigs in the Gulf of Mexico.
Please don't misinterpret these comments. I want a cleaner, greener planet as much as most people. But let's bring some measure of realism and perspective to the debate. What is happening in the Gulf of Mexico is potentially far worse than the unquestioned environmental damage in northern Alberta. The oil sands are located in a region which, until this resource began to be exploited, was thinly populated and not considered useful for agriculture or much of anything else. Yes, open pit bitumen mining blights the landscape, the process releases too much carbon dioxide, and tailing ponds occasionally kill ducks. But the companies involved are making progress towards reducing the environmental impact. The same can't be said for what's happening in the Gulf.
The oil sands protestors are preaching a policy of clean energy--devoting more resources to alternative fuels such as solar, wind, tides, biomass, etc. Of course that should be done but to date there is no evidence that we will be able to generate enough energy from these sources to replace oil any time in the near future. I doubt there are many people who are prepared to go back to the lifestyle of colonial times while we wait for that to happen.
Here are the realities we must face up to:
1. The world will need, and demand, oil for the foreseeable future.
2. The Gulf of Mexico disaster will put a brake on new offshore drilling permits, particularly in deep water, for several months and perhaps years.
3. The oil sands have the potential to continue to ramp up production. The Alberta Energy Resources Conservation Board reported in June that output from the region increased by 14% in 2009 to 544 million barrels. The Board predicted bitumen production will increase to 1.2 billion barrels a year (3.2 million a day) by 2019.
An article published in the International Herald Tribune on May 20 said that U.S. regulators and politicians are feeling "increasing...pressure to rely more heavily on Canadian oil sands" as a result of the Gulf spill. (The Herald Tribune is a scaled-down edition of the New York Times).
The story went on to say: "Canadian oil sands are expected to become the United States' top source of imported oil this year, surpassing conventional Canadian oil imports and roughly equaling the combined imports from Saudi Arabia and Kuwait, according to HIS Cambridge Energy Research Associates, a consulting firm."
Young ladies can take off their clothes and wear fake barrels to their heart's content. The oil sands reality is not going to change, especially after what has happened in the Gulf of Mexico. The time may come when the United States no longer needs Canadian oil but it's not going to happen next year or even in the next decade. Until it does, the oil sands will continue fuel American vehicles and power U.S. industries. And the companies that operate in the region will make a lot of money for investors. Cenovus Energy (CVE), a spin-off from EnCana (ECA), is one way for investors to play Canadian oil sands.
http://blogs.forbes.com/investor/2010/06/21/canadian-oil-sands-tainted-b...
