Kevin Libin: Oil sands find reluctant ally in U.S. government
Kevin Libin October 21, 2010 – 8:09 pm
The phrase “Dirty Oil” to describe the bitumen that comes from Canada’s oil sands is one of the environmental lobby’s great branding triumphs. Before 2004, you could find virtually no mention of the epithet in any major Canadian newspaper. In the last six years, however, it’s been name-checked thousands of times. The point, of course, was to stigmatize oil sands output as undesirably foul and polluted. It’s succeeded magnificently in many quarters. Except, it seems, in the U.S. State Department where it arguably counts as much anywhere else.
It has been low-key about it, but the Obama administration has looked a lot lately like a fairly reliable ally in Canada’s campaign to ramp up oil sands production.
This week, Secretary of State Hillary Clinton’s office won a key victory against environmentalist groups suing to undo her office’s approval of the Alberta Clipper pipeline. The pipeline, planned by Calgary’s Enbridge, will pump, at capacity, 450,000 barrels of oil sands crude from Hardisty, Alta. to Superior, Wisconsin. The idea of yet more carbon-rich Alberta bitumen feeding America’s oil habit was apparently unbearable for the Sierra Club, the Indigenous Environmental Network, and the National Wildlife Federation. They sued in the U.S. District Court of Minnesota, claiming the government’s approval of the pipe last year took for granted that Americans even wanted more Canadian oil, and that opening up a direct vein to the oil sands would holdup their desired march toward a carbon-free future.
The State Department’s defence might as well have been an oil sands publicist’s talking points.
Importing Alberta oil was, the government said, vital to “serve the national interest by providing American refineries access to secure, reliable and economic sources of growing crude oil supplies … from a reliable ally and trading partner.” Without more Alberta bitumen refiners would only “attempt to obtain additional supplies from less stable and less reliable sources.”
And while the Obama administration has boasted a passion for conservation and alternative energy, with the president promising waves of “green jobs” and appointing anti-carbon champions to top energy posts, the State Department offered a drastically more sober perspective on carbon’s future.
“Conservation and efficiency measures will reduce the energy demands by a small fraction of the projected energy demand within the foreseeable future,” it concluded. Wind and solar sources, meanwhile, “represent a small fraction of the projected energy demands for the market for the foreseeable future.”
U.S. demand for Canadian crude was only going up, it argued — successfully, the court found — whether the White House, or environmentalists, liked it or not.
But the Obama administration hasn’t just been defending the oil sands in court. It has done it publicly, too. Reluctantly, perhaps. Half-heartedly, maybe. But with TransCanada Pipelines’ Keystone XL transmission line to the Gulf of Mexico thrown into approval limbo (BP’s oil spill this summer spooked U.S. lawmakers from approving the last leg of a pipeline with three times the Clipper’s capacity), oil sands producers will likely take even lukewarm endorsements of their exports.
Which is roughly what Ms. Clinton offered last week when, speaking to the Commonwealth Club of California, an audience member asked her about the Clipper and how “can the U.S. be saying climate change is a priority when we’re mainlining some of the dirtiest fuel that exists.”
Ms. Clinton not only suggested she wasn’t planning to reconsider the pipeline approval, she’d probably make sure the Keystone XL got done, too.
“We’re either going to be dependent on dirty oil from the Gulf or dirty oil from Canada,” she nearly shrugged, leaving the impression that she’d prefer the latter, at least “until we can get our act together as a country and figure out that clean, renewable energy is in both our economic interests and the interests of our planet.” It was probably wise that she didn’t mention that her own office’s lack in faith in renewables as a feasible alternative.
Ron Liepert, Alberta’s Energy Minister, says parts of Ms. Clinton’s message were “somewhat encouraging,” though he was “discouraged” by the overall tone of her coolness toward oil.
“Thousands, maybe tens of thousands of jobs in the United States today are dependent on a vibrant oil and gas industry, starting with the manufacturing base,” he says. “We don’t manufacture Caterpillars in Alberta, they’re manufactured in Illinois and a whole bunch of other places in the U.S.” Plus, he says, there are all those jobs that come with the upgrading and refining at the terminals where the bitumen pipelines end up.
Of course Ms. Clinton knows these things, and with anemic U.S. job growth eroding her administration’s popularity, she’s surely thinking them, too. But fighting to sanitize the image of Alberta’s so-called “dirty oil” may be too much to ask from an administration so visibly married to an idealized vision of carbon-free future. Settling for a White House willing to fight to defend growing volumes of Alberta bitumen imports may be, for Canadian producers, at least a reasonable consolation prize.
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7:39 PM on October 21, 2010
“The pipeline, planned by Calgary’s Enbridge, will pump, at capacity, 450,000 barrels of oil sands crude from Hardisty, Alta. to Superior, Wisconsin.”
Gah …. how come there’s no business interest in putting a refinery at Ft. McMurray? It’s stupid to ship all that bulky crude so far from the major production site, when the refined product has a much smaller volume.Score: 2
10:09 PM on October 21, 2010
To build an up-grader or refinery in Alberta requires people, lots of skilled people. Although there are currently some unemployed skilled workers in this down cycle they they won’t stay that way for long. Bottom line is that Alberta is going to need lots of skilled workers in the next 20 years in the order of 150 to 250 thousand new additional workers over that period of time. Where are they going to come from? The unemployed and under employed of central and eastern Canada don’t want to come here and don’t have to because of the generous wealth transfer programs we have in this country. So where are they going to come from? One way to solve the job/people problem is to ship bulk unrefined products to highly populated areas with high unemployment which is what is accomplished when sending bitumen rather than synthetic oil or refined products down the pipeline. Unless Canada’s unemployed start moving west it will and must continue that wayScore: 0
10:21 PM on October 21, 2010
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