Wednesday, November 28, 2012

The Oil Rush: Where's the Political Leadership for Sustainability?

By Jim Harding
Bakken Oil Rig
No Nukes
November 28, 2012

Our leaders aren’t really leading; they are following. They are following a big myth, even a delusion several centuries in the making that the economy can continue to expand without ecological blowback putting biodiversity, water quality, human wellbeing and our society at risk. The extreme weather events from global warming are the tip of the iceberg.

It’s taking a long time to sink in. Prime Minister Harper doesn’t get it and he may never. Premier Wall doesn’t act like he gets it either. Even past federal Environment Minister Jim Prentice, who was regularly briefed on climate change and spent some quality time with David Suzuki, still refuses to get it. Recently, speaking on CBC’s The National about the proposed Northern Gateway pipeline, he says “failure is not an option”. Growing carbon emissions didn’t seem to cross his mind; it’s full speed ahead with heavy oil production. As Vice President of CIBC, a major funder of and profiteer from the tar sands, Prentice says we must find a “second customer” and do this quickly.

Mr. Prentice may be getting slightly worried about the achievability of Harper’s dream (or nightmare) of Canada becoming an energy superpower. But working in the financial industry with the responsibility of giving “leadership on strategic initiatives” he really can’t speak out for sustainability.

The push is on! If you haven’t noticed we are daily inundated with corporate ads telling us the oil sands are “Energy at Work for All Canadians”. This, of course, is baloney – the tar sands primarily work for the oil corporations. A net exporter of oil, Canada doesn’t even have a strategy which ensures energy security at home. While governments push hard for more pipelines to pump more heavy oil south and/or to ship to Asia, eastern Canada still imports oil from the Middle East. We are becoming an appendage to US and Chinese energy security, not our own. Under Harper’s “leadership” we’re like a banana republic when it comes to oil; no wonder he treats “democracy” so lightly!


While Harper has scurried to deregulate ecological protection to make Canada an energy superpower in the image of Alberta, worldwide oil production has been shifting. Just as Canada was replacing Saudi Arabia as the U.S.’s major oil supplier, the US made its biggest breakthrough ever to end its energy dependency. Since Harper took power in 2006 US domestic oil production has steadily grown primarily due to massive drilling just across the border in North Dakota in the Bakken formation. This formation is gigantic, the size of Switzerland, and the oil industry plans to sink 40,000 wells to extract more and more oil. This drilling and fracking into unknown waterways will surely degrade the ecology of North Dakota, as tar-sands mega projects have done in northeastern Alberta.

Oil production in North Dakota is up nearly 60% since last year and rising. According to Nathan Vanderklippe writing in the Nov. 17, 2012 Globe and Mail, production could soon hit 1 million barrels a day; it’s already at 728,000. This “oil rush” could easily undermine Harper’s one-dimensional vision for Canada becoming an energy superpower. It’s not that far from North Dakota to Enbridge’s Mainline Pipeline in Manitoba and 235,000 barrels of Bakken crude is already going there daily. With new pipelines from North Dakota, 620,000 barrels could be going daily into this continental system by 2016. The US’s “oil renaissance” cuts the distance that oil has to travel to the huge US refineries on the Gulf Coast. This will greatly cut costs. Further, the crude oil being moved from North Dakota is not bitumen; it is light crude, so light according to Vanderklippe that it can be used in an old diesel engine without refining.


Will this make Alberta’s heavy oil uneconomic? Companies that make $50 a barrel profit in North Dakota can outbid tar-sand oil producers for pipeline space. Also remember that as much as one billion dollars a week is going into tar-sands mega-projects to increase production, supposedly for the assured US market. The International Energy Agency (IEA) estimates that bitumen production in the tar-sands will triple to 4.3 million barrels of oil daily by 2035. The tar-sands projects however are not only the world’s most environmentally destructive, they are also the most costly.

Who would have thought just six years ago, after Harper first took power with his obsession to build the Canadian economy in the image of Alberta’s tar-sands, that the IEA would be predicting the US would be self-sufficient and producing more oil than Saudi Arabia by 2035. Last year (2011) the US was already producing 7.8 million barrels of oil a day. While it still consumes 18.8 million barrels, the IEA estimates that by 2022 it will be producing 11.1 million barrels daily and will continue to move towards self-sufficiency. The gap has traditionally been filled by oil imports, which led the US to install several oil dictators and to fight many oil-related wars. The more politically secure oil supply that came from Canada, especially after NAFTA, has led Canada to increase its supply to 27% of the US’s oil imports.

But, especially with the “oil rush” in North Dakota, it seems all this is about to change. Reduced dependency on Canadian energy resources is already occurring. Canada used to supply 15% of the US’s natural gas but this has now dropped by half. And with Obama’s “open for business” policy for shale gas exploration and fracking this may soon go to zero. It’s time for Canadians to change our lens; the US is not going to keep the Canadian energy market afloat forever.


You can see why Harper’s pro-oil industry government is trying to fast track so many oil pipelines. You can understand why his Natural Resources Minister Oliver tried to demonize environmentalists and First Nations opposing more pipelines as being “un-Canadian”. The multi-nationals operating in Alberta are getting nervous that they won’t get the huge profits they expected from guaranteed access to the large US market. Harper must be starting to feel the squeeze and he’s working hard to make China our new market saviour. It’s now not just environment be damned, but human rights too.

The two pipelines getting most attention are Trans-Canada’s seven billion dollar Keystone XL, from Alberta to the US Gulf refineries, and Enbridge’s six billion dollar Northern Gateway, from Alberta to the BC Coast, to fill Chinese tankers. But there are many more in the works: the East Coast Pipeline Project, Enbridge’s Flanagan South, Seaway Expansion and Kinder Morgan’s Trans-Mountain Expansion, which in total the industry hopes will carry 2.5 million barrels of oil a day.

If the “oil rush” continues at its present frenetic pace all of central North America, including all of the Canadian prairies, will be crisscrossed with a web of toxic pipelines. All of these do environmental damage when constructed and leaks are inevitable. Can we even slow down enough to consider what might happen to this precious land and the precious water that it holds?

There’s been some attention paid to the environmental threat of the Northern Gateway to BC’s inland and coastal fishery. And there’s been some attention to the environmental damage should Keystone XL go through the Nebraska Sand Hills. But the new Keystone XL route may also go through the sacred Great Sand Hills in southwestern Saskatchewan. After the Regional Environmental Study in 2007 the province started action to declare some of these areas Ecological Reserves. Will all this now also be put at risk?

We are not observers in this race to the bottom, but we’ve been very quiet, so far. Despite the present economic boom our sustainability, too, depends on a new energy path.

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