Alberta's ‘dirty' oil a sticky problem for Charest
KONRAD YAKABUSKI // The Globe and Mail
September 18, 2008
If you had to choose between Alberta oil or crude from Algeria and Angola, which should you pick?
This is the decision Quebec Premier Jean Charest faces now that Calgary-based Enbridge Inc. has unveiled plans to pipe heavy crude from the Alberta oil sands to refineries in Montreal for the first time.
Quebec currently relies almost exclusively on imported oil, with Algeria, Britain, Norway, Angola and Venezuela as its main suppliers. The Parti Québécois, along with some leading environmental groups, think it should stay that way. To them, piping in oil from the “tar sands” – the enviros' preferred term – would reverse all of Quebec's progress on climate change.
Alberta's “dirty” oil is an increasingly tough sell, and not just in Quebec. Barrel for barrel, mining oil sands crude is three times more emissions intensive than oil from conventional sources. Felling the boreal forest and draining the Athabasca River to get at the bitumen involves destroying environmentally precious resources for the sake of exploiting a non-renewable one. Add to all that the sight of birds being pulled from toxic tailings ponds and it's almost enough to make you want to join Greenpeace.
But is the oil sands' environmental record a good enough reason for a Canadian province to prefer buying oil from Algeria, where a terrorist bomb last month killed 12 employees of Montreal-based SNC-Lavalin? Or Angola, which has taken its first tentative steps toward democracy after almost three decades of civil war, but still resembles a one-party state?
“You have to weigh that against your core values,” said Matt Price of Environmental Defence, one of the groups opposed to Enbridge's plan. “We are not having this debate in Canada. We are just blindly following where the industry wants to lead us.”
Enbridge's plan involves reversing the flow of a pipeline that currently carries foreign oil from Montreal to Sarnia, Ont. Under the so-called Line 9 reversal, about 220,000 barrels a day of Alberta oil would flow eastward from Sarnia. About 80,000 barrels would be sold to refineries in Montreal, while the rest would flow by pipeline to the U.S. east coast, where it would travel by ship to refineries in Gulf of Mexico states.
Those 80,000 barrels represent about a fifth of Quebec's daily oil consumption of about 385,000 barrels, according to the Canadian Association of Petroleum Producers.
Enbridge plans to make a formal application to the National Energy Board (NEB) in November, with an objective of pumping oil east by 2010. Ultimately, the federal cabinet would have to approve any NEB ruling in favour of Enbridge – which raises interesting questions of its own, depending on which Steph wins on Oct. 14.
Line 9 was originally built after the 1973 oil embargo in order to provide Quebec with a source of Alberta oil, though it was the conventional kind from drilled wells. Its direction was reversed in 1999. Since then, all of Quebec's oil has come from foreign sources, with the exception of a small portion from Newfoundland.
Over all, Quebec imported almost $14-billion worth of non-Canadian oil in 2007, when crude averaged around $70 (U.S.). That left the province with a massive $10-billion (Canadian) trade deficit that is certain to balloon further this year, given oil's summer price spike (it hit $147 U.S. in July) and a decline in manufacturing exports.
“What Line 9 reversal will do is provide a source of reliable Canadian crude to Montreal-area refineries, helping offset their current reliance on foreign imports,” explained Enbridge spokeswoman Jennifer Varey. “One of the attractions of this approach is that it minimizes the environmental and community impact of pipeline construction.”
The PQ would prefer that the Charest government ramp up oil and gas development in Quebec, using Norway as a model. It's a laudable objective, but not a terribly realistic one. Besides, drilling for gas in the Gulf of St. Lawrence comes with its own environmental quandaries.
Mr. Charest has not publicly weighed in on the matter yet. Calls to his office, and to those of his environment and natural resources ministers, were not returned. However, at the annual meeting of Eastern Canadian premiers and New England governors in Maine this week, Mr. Charest voiced support for California's moves to force auto makers to slash vehicle emissions and adopt a low carbon fuel standard that, depending on how it's defined, could make energy from Alberta's oil sands unwelcome in Quebec.
Mr. Charest has been a tireless supporter of increasing interprovincial trade and strengthening the federation. But will he say, thanks, but no thanks, to Alberta's oil?
