The Brewing Controversy Over Alberta Oil
By George Winter, Ph.D.

 

 

Higher gasoline prices at your pump, international frustration and quarrels, as well as global warming and the potential flooding of Los Angeles and San Francisco, all hinge on making the right decision about Alberta oil.

Arnold Schwarzenegger, the governor of California, and Ed Stelmach, the premier of Alberta, Canada, disagree about Alberta oil. This is not a trivial matter. Governor Schwarzenegger has implied that Alberta oil is “dirty oil” and indicated he wants no part of it.

Eleven other states have indicated they will follow California’s lead. Even the U.S. government has suggested Alberta oil is not clean enough for federal vehicles. But if U.S. oil supplies do not come from Canada, where will they be obtained?

Stelmach, heading into an election, would like us to believe, as he claimed in Washington on Jan. 16, 2008 that: “Alberta oil will meet any quality standards.” But does it?
The Tar Sands of Alberta Canada contain slightly less oil than Saudi Arabia (174 vs 260 billion barrels). So vast are the deposits that they are comparable in size to the entire state of Florida. It is here in friendly Canada, it is secure, and it is available.

What is wrong with that? The oil is thick and heavy and is found bound to water and to sand. It is hard and expensive to separate the oil from the sand. It is true that when refined this oil is clean and powers cars and trucks just like any other fuel. So premier Stelmach is right. The Alberta tar sands oil can meet any quality standards.

But Governor Schwarzenegger is right too. This oil is “dirty oil.” Then, what does “dirty oil” mean?

The answer depends on our understanding of global warming. Extraction of the tar sands oil and upgrading it to fuel grade for car engines requires enormous amounts of energy and water and destroys miles of forest. The heavy oil is mined using huge equipment (requiring a lot of fuel) to remove the trees, rocks, soil and sand. After the mining is complete, the hole in the ground remains along with the water-borne tailings.

Companies claim the land will be returned to its natural state (which would require further use of fuel and so contribute to further global warming) but no one knows how this is to be done. Not an acre has been recovered to satisfy government standards.

As David Schindler (professor of ecology at the University of Alberta) has said, it takes the equivalent of two barrels of natural gas and two barrels of water to produce just one barrel of tar sands oil. The natural gas is burned to heat water to extract the oil. Burning natural gas to produce oil is (according to Marlo Reynolds executive director of the Pembina Institute) “like using caviar to make fake crab meat.”

Finally the extracted heavy oil needs to be upgraded to fuel grade by refining. All this takes further energy, and further contributes to global warming. In fact, as pointed out by the Pembina Institute, tar sands oil production requires 2 to 3 times as much greenhouse gas as production of conventional oil. That’s before it even gets into car and truck tanks, and that’s why it is “dirty oil.”

The World Wildlife Fund and The Pembina Institute have evaluated the ecological performance of various companies extracting oil from the tar sands and (using 100% as ideal and 50% as a pass) rated the average ecological performance at 38 %. Two of the major firms got an 18 % grade.

What can stop the Alberta rape of its own resources? If its markets dry up, Alberta will stop. But eventually it may have to stop due to shortage of natural gas or shortage of water. The water used so extensively in mining and refining the tar sands oil comes from the Athabasca river which derives in large measure from the melting of the Athabasca glacier.

But that glacier is retreating rapidly and will probably disappear even without additional global warming. Of course, water shortage will have a huge impact on the people and cities of Alberta, and not just on the tar sands extractors.

Thus, governor Schwarzenegger is right: the fuel from the tar sands is dirty due to its extremely large contribution of CO2 and hence to global warming. Why does he care? Simple. If the Greenland ice cap melts (and melting is well underway) it will raise ocean levels by 20 feet, flooding parts of California cities, so he is wise to be concerned. Further warming, melting the West Antarctic ice shelf, will raise the ocean level another 20 feet. Goodbye Holland!

The governor is correct too in wanting to protect the Alberta environment from further ecological damage. The paradox is that in this process the governor of California is more intent on protecting the Alberta environment than is the Alberta premier. It is not that he has no plan. The Alberta premier has indicated that he plans to ensure decreased emissions of greenhouse gasses from the tar sands by 14 %. But his time line is 2050. Goodbye Polar Bear.

Premier Stelmach’s time line is beyond belief, his plan is too little, too late, and too vague. He obviously does not believe in global warming.

It may seem odd that as an Alberta economist, I would take sides with Schwarzenegger rather than Stelmach, but this is too important for patriotism. Civilization is at stake here. At least Governor Schwarzenegger is working on the problem of global warming, and not ignoring it.

What can we do? Write letters of encouragement to the Governor. Get active. Avoid using Alberta’s “dirty oil.” Read the many good books on Global Warming. Send letters objecting to “dirty oil” to the Premier of Alberta, Parliament Buildings, Edmonton Alberta Canada.

George Winter Ph.D. (Iowa State University), is an economist, author and formerly Dean, Faculty of Administrative Studies, Athabasca University, in Alberta Canada. You may e-mail gpwinter@mcsnet.ca


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