Canada is Center of Climate Debate
Obama's Crucial Decision
Canada is now at the epicenter over the battle to reduce carbon emissions. At issue are the plentiful tar sands that could help feed this nation’s oil appetite as well as the required 1,700 mile pipeline that would wend its way down while stopping in refineries in Texas.
But should this be where the green community draws its line in the sand? Its key arguments are that the production process is so energy intensive that if completed it would not only add significantly to carbon levels but also that it would increase oil dependence and stall the electric car. The reality is, however, that this oil resource will get developed and it will eventually get transported -- and consumed by the Asian countries instead of the United States.
"Through the Keystone system, the U.S. can secure access to a stable and reliable supply of oil from Canada where we protect human rights and the environment, or it can import more higher-priced oil from nations who do not share America's interests or values," says Russ Girling, TransCanada's chief executive.
The tar sands, also called oil sands, sit in Alberta, Canada that holds the second largest pool of crude petroleum in the world behind Saudi Arabia. The extraction of those resources is one issue. Transporting them is another. And that’s when the United States enters the picture.
The U.S. Department of State is charged with making recommendations to the president of the United States, who will decide by year-end if the pipeline should be built. The department has just said that the line could move forward with minimal environmental harm, noting that the overall carbon emissions would not be much greater than those of other heavy crude oils that the United States refines.
Many are also saying that if the southward XL pipeline is not built then the Canadian company would construct a different line heading west. The fuel would then be carried by ship to Asia, where even more greenhouse gases would be released.
The U.S. Environmental Protection Agency is monitoring the State Department, calling its analysis so far “insufficient.” EPA’s main concerns are that the line would traverse sensitive aquifers where this nation gets its drinking water. It also wants more data on the potential for line leakage. And, finally, it must be convinced that the lifecycle emissions tied to the oil would not add notably to greenhouse gas levels.
Only the Canadian government can decide whether to allow the development of tar sands in Alberta. All indications are that it will do so. Still, the fuel source would sit idle unless it has a passage way into potential new markets. TransCanda Keystone Pipeline wants to build its XL project at a cost of $7 billion so that it could carry -- initially -- 830,000 barrels per day of the crude that is derived from bitumen. If all the permits go through, it would be operational by 2013.
Producing crude oil from tar sands is expensive. It is also energy intensive because lots of natural gas must be burned to heat the water that is used to separate the oil from the tar in which it is mixed. That creates more carbon emissions. In fact, the Canadian government is saying that because production would likely double in a decade, its greenhouse gas emissions would rise by a third.
Beyond those barriers, the mining of the commodity leaves an awfully large footprint in the wilderness. Environmental organizations are furthermore concerned that the optimism surrounding oil sands will only add to the world's dependence on fossil fuels at a time when they say that cleaner energy alternatives are available.
“It's not that we're going to necessarily keep it in the ground forever by blocking this pipeline,” says Bill McKibben, an environmental activist who has led protest in Washington this week, on the PBS Newshour. “But sooner or later, the world is going to come to its senses about climate change. And, therefore, preventing it for 5 or 10 years is a pretty good thing.”
McKibben adds that the politically-powerful Indian tribes in Canada are opposed to building any westward pipelines, meaning that the tar sands there would stay landlocked -- if President Obama agrees with the environmental position.
But the assumption that the oil will stay in the ground just won’t hold. Today, the world community uses 85 millions barrels per day while the United States consumes a quarter of that. Demand for oil is expected to rise by 54 percent in the next 20 years, meaning global production would have to jump to 44 million barrels of oil per day, says the U.S. Department of Energy.
In the end, President Obama will be torn between his promises to limit greenhouse gases and his desire to create jobs. Odds are he’ll choose the latter, reasoning that Canada’s crude would otherwise find its way elsewhere and that future improvements in technology will minimize the environmental harm.
EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
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