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ENERGY: Canada's Oil Sands a Political Hot Potato

Am Johal

VANCOUVER, Feb 7 2008 (IPS) - Alberta's Parkland Institute and the Polaris Institute have a released a report calling for an emergency strategic petroleum reserve for Canada, as well as for tougher policies to cut fossil fuel consumption and revise the country's oil export regime.

Oil sands mining equipment in Alberta, Canada. Credit: Gord McKenna

Oil sands mining equipment in Alberta, Canada. Credit: Gord McKenna

The oil-rich province of Alberta is currently in the middle of a provincial election where the environment and oil sands development will be a heated political topic of national importance in Canada. The historically conservative province has been dragging its feet on national initiatives related to climate change.

Producing one barrel of oil from oil sands is a water- and energy-intensive process that emits three times more greenhouse gases than production of conventional light or medium crude oil.

The report, "Freezing in the Dark: Why Canada Needs Strategic Petroleum Reserves", cites the volatility of the Middle East region and the strategic implications for Canada having to import close to one million barrels a day to supply the central and eastern parts of the country. Canada imports 40 percent of its oil needs, with half coming from OPEC countries and annually diminished supplies from the North Sea where production is falling.

The Alberta oil sands have pipelines which can send oil to the United States but not to Eastern Canada.

The principal author of the report, Dr. Gordon Laxer, founding director of the Parkland Institute and Political Economy Professor at the University Alberta, told IPS in an interview, "We live in a northern climate. We export two-thirds of our oil. We import 40 percent of national needs. Quebec and Atlantic Canada get 90 percent and Ontario one-third. Almost half of that comes from places like Algeria, Iraq and Saudi Arabia – none of which are politically stable. The 40 percent we get from the North Sea is diminishing."

"We are in a vulnerable position to the United States. The difference is that the U.S. has a Strategic Petroleum Reserve which can account for two months of a supply shortage. Mexico has strategic petroleum reserves, as do most developed countries including the European Union. All 26 of the countries that belong to the International Energy Agency have strategic petroleum reserves – which are the main industrial countries in the world – except for Canada."

Laxer added, "I think the prime minister thinks we're an energy superpower. It is a ridiculous misnomer. In reality, we're an energy satellite of the United States. No one is looking after energy security in Canada. It's a total dereliction of duty by federal authorities. In a northern country like Canada, people can freeze in the dark. It's a disgrace. The government is so concerned with exports and fear of taking on the oil industry in Alberta that they are not taking care of Canadians."

Laxer added that when then Prime Minister Jean Chretien refused to send Canadian forces to the war in Iraq, Premier Phillip Klein of Alberta apologised to the U.S.

"We have a security and prosperity partnership which is dealing with a kind of de facto annexation that drives Canadian public policy. With the Oil Sands Working Group, there was a meeting in Houston, Texas, where they recommended that the oil sands should increase their production five-fold, the day after Stephen Harper became prime minister," he said, noting that three-quarters of that production goes to the United States.

"This is burning up natural gas and causing environmental damage. Canada will not meet Kyoto [Protocol] and post-Kyoto targets of meeting reductions in greenhouse gas emissions at the present rate."

Laxer also raised the possibility of more production in the oil sands leading to further exports to the United States. "Here is the really perverse situation between Canada and the United States – if we reduce our consumption, it reduces our dependence on Middle Eastern oil. But if we reduce our consumption, under NAFTA [the North American Free Trade Agreement], we are forced to maintain production levels and will inevitably send more oil to the United States."

"Our production level is totally unrelated to the consumption levels inside Canada," he said. "We have to bring production back in line with consumption. We need tough policies to cut fossil fuel consumption. We have huge policy impediments in place right now that are not beneficial for the environment."

In January, the Alberta-based Pembina Institute and World Wildlife Fund-Canada released "Under-Mining the Environment, the Oil Sands Report Card". It is the most comprehensive assessment of 10 operating, approved or applied for oil sands mines.

The report found that while the majority of oil sands operations have comprehensive environmental policies in place, only two companies provided evidence of having an independently-accredited environmental management system.

With the exception of the existing Albian Muskeg River Mine, no operation has voluntary targets to limit greenhouse gas emissions. No project or company has publicly reported targets to reduce water usage from Athabaska River.

And despite more than 40 years of oil sands development, not a single hectare of land has been certified as reclaimed under government of Alberta guidelines, the report said.

Simon Dyer, lead author of the Pembina report, told IPS, "The report card was a year-long process, with 20 different questions. We found that environmental issues were not being properly addressed, there is a lack of regulation and enforcement is clearly not happening. It seems that the Alberta government is willing to pass old technologies that are harmful to the environment."

Dyer added, "When it comes to Canada meeting climate change initiatives, clearly, the oil sands is the elephant in the room. Alberta doesn't have a plan and doesn't take seriously what needs to happen. It is a case of 'greenwash' based on lack of action."

"Albertans want action on climate change with real emission targets and the polling suggests that they prefer to see absolute reduction targets set up. The oil sands is rapidly becoming an issue based on social and environmental implications of the production process. If we slow down, there is the potential doing this properly which would make for interesting times in Alberta given the national interest in this issue," he said.

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