Ft. McMurray, Alberta
Canada feels unappreciated. Recall the winner of the New Republic‘s contest for the world’s most boring headline. It was “Worthwhile Canadian Initiative.” Okay, I doubt Prime Minister Stephen Harper had that particular American slight in mind as he sat next to President Obama in the Oval Office last month. But when reporters were ushered into the room, he made a pitch for American gratitude. “I remind all our American friends,” he said, “that Canada is by far the largest supplier of energy to the United States.” Who knew?
Harper was putting it mildly. Canada is singularly capable of improving America’s energy security and reducing our reliance on oil from unfriendly or unreliable countries like Saudi Arabia, Venezuela, and Nigeria. The government of Canada is also doing something most American politicians wouldn’t dare: openly defying the environmental movement. Environmental activists–especially American ones–are riveted on one mission in Canada: stopping production from the oil sands of northern Alberta. The ostensible reason is it pollutes the atmosphere. The real reason is it produces oil, the use of which environmentalists wish to stamp out. And because most of the oil from this remote region is exported to the United States–and much more will be in the future–the initial goal of environmentalists is to bar the oil from reaching the vast American market.
A decade ago, Canada provided 15 percent of America’s oil imports. Last year, the figure was 19 percent. Now it’s probably more than 20 percent. As production in the oil sands increases, that share should eventually double. And there’s a strategic point: The more we get from the oil sands, the less America will import from hostile countries. Already this past July, Canada sent 1 million more barrels of oil a day to the United States than did Saudi Arabia, our number two source of imported oil.
The oil sands (also known as tar sands) cover an area roughly the size of Florida. The oil, or bitumen, is mixed with sand, and it took decades for experts to figure how to separate the two profitably. The total deposit is estimated at 1.7 trillion barrels, but it could be even larger. That’s trillion, compared with which U.S. daily oil consumption of nearly 20 million barrels is minuscule, a trifle, a speck. Only one-tenth of the deposit is economically recoverable today, and I emphasize today. It’s all but certain that more of the oil will become extractable as energy technology, which is anything but static, continues to develop. The sands are likely to be a secure, accessible, and growing source of oil for decades. As a Canadian might put it, that’s a national security hat trick, benefiting the United States.
With Barack Obama in the White House, we’ll need every barrel the oil sands can produce. America’s consumption of energy is certain to grow over the next two decades. But the Obama administration has balked at new development of domestic oil resources. Obama revoked President Bush’s order permitting oil companies to drill off the Atlantic and Pacific coasts, and he opposes new drilling in Alaska. His minions have cancelled oil leases in the West and declined to approve new ones in the Gulf of Mexico.
Since more oil will have to be imported whether Obama and the environmental lobby like it or not, better from the oil sands than anywhere else. Oil from Canada comes to the United States by pipeline. This has many advantages. There’s far less chance of spills than when oil is imported by tanker. Pipelines are secure. The supply lines are short. The oil goes directly to refineries. Also, Canada and the United States are as tightly intertwined as economic partners can get. The flow of oil from Canada won’t be disrupted by political disputes.
The chief threat of disruption comes from environmentalists, mostly American ones. Canadian environmentalists loathe the oil sands and they’re good at stunts, like unfurling “Stop the Oil Sands” banners in public places. Two dozen Greenpeace protesters recently broke into the Shell Albian Sands facility north of Ft. McMurray, where 15 of them chained themselves to heavy equipment. But Canadian environmental groups lack political clout. For them, the good news is that reinforcements from the States have arrived.
American groups have made the oil sands a top target. They’ve set up shop in Alberta to push the cause. When Harper came to Washington last month, protesters showed up across from the White House to denounce exploitation of the oil sands. More important, American environmentalists have made the oil sands a big media story in the United States. And they have many friends and former colleagues in the Obama administration.
Their dream is to persuade, or force, the Obama administration to ban imports from the oil sands. Their chief argument: “Heavy” oil from the oil sands emits more greenhouse gases than conventional oil, thus producing more global warming. In the imagination of environmentalists, the fate of planet Earth is at stake here.
But even if Obama goes along, the oil sands won’t be returned to nature. Both Harper’s Conservative party and the opposition Liberal party support more production. Michael Ignatieff, the Liberal leader, said the oil sands provide “employment for hundreds of thousands of Canadians” and are a source of what the Toronto Globe and Mail called “Canada’s geopolitical power.”
Besides, should the United States halt imports, Canada has an alternative market for its oil. Two months ago, PetroChina, which is owned by the Chinese government, agreed to invest $1.7 billion in two oil sands projects. America’s loss would be China’s gain.
Assuming America and the world will continue to need oil, it would be hard to find a more appropriate place to produce it than the oil sands of Alberta. The sites used for energy production represent a tiny portion of the vast boreal forest that stretches across northern Canada. The oil region is thinly populated and far from any urban center, yet quite accessible to markets. The oil sands contain the world’s second largest oil reserves after Saudi Arabia’s. And, thank God, they’re in a friendly, politically stable, nearby, democratic country.
When I toured three oil sands facilities this summer, I was struck by three things. First, roughly 20 percent of the oil is close enough to the surface to be strip-mined. The mining, using a giant shovel and trucks three stories high, leaves an ugly scar on the land. Second, the other 80 percent of the oil is being recovered through an innovative process that uses less energy, causes less pollution, and creates a smaller footprint on the land. Three, the oil companies got off to a slow start in restoring the environment. Now they’re downright obsessed with their obligation, both legal and ethical, to reclaim the areas they’ve damaged or devastated.
The oil sands are a unique geological formation created eons ago when oil was pushed upwards, perhaps by the emergence of the Rocky Mountains. Some of the oil reached the surface, and on hot days it still oozes from the ground. “We’re just cleaning up God’s oil spill,” says Alberta official Gary Mar. “It’s a giant reclamation project.”
Development of the oil sands began in 1967, and today only a relatively small area–1,356 square miles–is being mined. At the Albian Sands mine, everything is supersized. The giant trucks, which cost $5 million, have wheels priced at $60,000 a piece. Women, by the way, are regarded as the best drivers. Oil-saturated dirt is shoveled onto trucks 24 hours a day year round in 400-ton loads. Then the oil is separated from the sand by hot water and upgraded. The water, contaminated with toxic “tailings,” is discharged into a pond.
Until the tailings settle, the water is a problem, as Syncrude, Canada’s biggest oil company, found to its embarrassment last year. About 500 ducks landed on a Syncrude pond and died. The incident attracted worldwide news coverage, and a Greenpeace banner (“World’s Dirtiest Oil: Stop the Tar Sands”) was unfurled at the facility. Since then, systems to deter ducks have been installed at the ponds.
Though the point is lost on environmentalists, surface mining represents the present–and maybe the next 20 years. The oil sands’ future is a process called steam assisted gravity drainage–or SAGD (pronounced sag-dee) in oil field lingo–developed by a petroleum engineer named Roger Butler. It was this invention, which came to Butler while he was drinking a beer in a restaurant, that put the oil sands on the world’s energy map by making its underground oil recoverable. Butler’s cutting edge technology uses steam and gravity to let oil seep into a pipe and come to the surface. It has the added advantages of not tearing up the land and of emitting less greenhouse gas.
Before my tour of the oil sands, I had expressed no interest in reclamation. But my guides from three oil companies insisted on taking me to areas that had once been mined, now covered with trees, grass, and other vegetation. I saw a herd of 300 bison grazing on land reclaimed near a Syncrude facility. I sloshed through wetlands to see an impressively restored pond. I was force-fed industry plans for restoring the frontier.
The reclamation effort, though intense, doesn’t bring instant results. Rather, it takes years for a spot of land to look reclaimed. Near one site, Cheryl Robb of Syncrude told me, “If you were to come back to this spot in 20 years, the view would be dramatically different. . . . You’d overlook a landscape reclaimed with lakes, forests, wetlands, and grasslands.” Maybe so, but environmentalists focus on the way the oil sands appear now.
Their primary argument, however, is that extracting oil from the oil sands is a far greater contributor to global warming than producing conventional oil. It’s a weak and disingenuous case. Environmentalists claim extracting and producing crude oil from the oil sands generates as much as three times more greenhouse gases. But that process is only one-fifth of the oil’s life cycle. Measured on a well-to-wheels basis–from extraction to combustion as gasoline–its emissions are only 5 percent to 15 percent greater than those from conventional oil, according to Cambridge Energy Research Associates (CERA). “This places them within the general range of crude oils consumed in the United States,” a CERA study said. And oil from the sands gives off less than one-tenth of one percent of the world’s CO2 emissions.
But environmentalists have been successful in one sense. They’ve coaxed the media into treating the oil sands not only as an important story, but as a tale of environmental trouble, not an energy issue. That’s a switch from three years ago when 60 Minutes aired a 13-minute segment on the oil sands. It emphasized the prospect of oil sands production at eight times the output of Saudi Arabia. The sands could “help solve America’s energy needs for the next century,” CBS correspondent Bob Simon said. The environment got less attention.
In National Geographic in March, the environment got top billing. The title of the story–“Scraping Bottom: The Canadian Oil Boom”–offered a pretty good hint where it was headed. In words and unattractive pictures, the article played up the drawbacks of exploiting the oil sands. “Nowhere on Earth is more earth being moved these days,” it said. The story suggested fish are being contaminated, natural gas wasted, First Nations (Indians) mistreated, even people afflicted with deadly disease–all as a result of the oil rush.
Now the media flock to northern Alberta with one story in mind. And since there’s plenty of at least temporary ugliness here, they have no trouble finding it. Reclamation is of less interest. Oil company officials complained that a BBC crew refused to climb Gateway Hill to film a reclaimed site. And a photographer for an American magazine declined to hike to the pond that I thought had been nicely restored. Slightly more balanced, the New York Times headlined a story last month, “Oil Sands: Destroyer or Savior?”
In August, the State Department approved construction of a pipeline to bring what it called “heavy crude” from the oil sands to a terminal in Wisconsin. The reasoning was unequivocal. The pipeline “would serve the national interest, in a time of considerable political tension in other major oil producing regions and countries, by providing additional access to a proximate, stable, secure supply of crude oil with minimum transportation requirements from a reliable ally and trading partner,” according to a 28-page “national interest determination” signed by Deputy Secretary of State James Steinberg.
That wasn’t all. A massive surge in imports from the oil sands was envisioned. The State Department document cited the U.S. Energy Information Agency’s projection that “American oil needs” would require imports from Canada, chiefly from the oil sands, nearly to triple over the next two decades to 4.3 million barrels per day, dwarfing imports from the Middle East and elsewhere.
State officials took into account concerns about greenhouse gas emissions but concluded they “do not outweigh the benefits” to the national interest. Environmentalists were furious. The National Wildlife Federation, the Sierra Club, and other groups filed suit to block the permit for the new pipeline.
There’s another looming threat to oil sands imports. In 2007, Democratic representative Henry Waxman won passage of an amendment barring the federal government–mainly the Defense Department–from purchasing fuel that has a bigger carbon impact than energy from conventional sources. Waxman wasn’t targeting the oil sands, but the measure would affect them.
Oil would have to meet the low-carbon “life cycle standard” of the Environmental Protection Agency (EPA). But EPA hasn’t issued such a standard and isn’t expected to anytime soon. Meanwhile, a Senate committee voted out a bill last June to treat the oil sands as a conventional source. That bill’s future is unclear. So the fight goes on.
But two factors make imports from the oil sands difficult to stop or significantly curb. One is national security, the other America’s deep ties to Canada. For now anyway, both are stronger than any environmental interest.
The “national interest” referred to by the State Department in approving the new pipeline is roughly synonymous with “national security.” The more the United States can rely on an ally and neighbor for oil, the greater the country’s security. “These attacks on the oil sands are attacks on America’s national security,” an oil expert told me.
“The oil sands have to be seen in the larger context of energy security and Canadian-American relations,” said CERA chairman Daniel Yergin. “The oil sands are part of the interdependence of our two countries.” Blocking oil sands imports would disrupt relations between the United States and Canada as never before and shatter that interdependence with America’s biggest trading partner.
The Obama administration appears to recognize this. When the new ambassador to Canada, Chicago lawyer David Jacobson, toured the oil sands last week, he said Canada is “a pillar of the energy independence and energy security of the United States.” And he noted “an enormous amount of progress . . . on air and water and land environmental issues with respect to the oil sands.”
Obama didn’t say as much in the meeting with Prime Minister Harper in September. Environmentalists clamored for him to raise questions about the oil sands. But “we’re not at that level yet in terms of policy discussions,” a Canadian official told me. In other words, the issue of the oil sands never came up.
Fred Barnes is executive editor of THE WEEKLY STANDARD.
