Factoring Sustainability Into Alberta's Tar Sands Project
http://www.worldchanging.com/archives/007166.html
Mindy Lubber
August 24, 2007 11:26 AM
There's much talk these days of capitalism and sustainability being increasingly interrelated -- that environmental and social impacts need to be included along with quarterly sales projections in corporate strategies and the financial bottom line. But why is this still more a concept than a reality, especially when it comes to a sustainability crisis like global warming?
Much of the problem is our reliance on outdated accounting systems. Since the Industrial Revolution, our economy has used accounting systems that were precise in measuring capital goods and gross national product, but weak in measuring natural and human resource impacts. This narrowly-defined accounting system meant that companies were long able to "externalize" natural resource costs. In other words, they could pollute for free without paying for environmental damage and cleanups. Society and taxpayers shouldered these costs instead.
Society has gotten better at pushing these "external" costs back at business. In one example, different types of air pollutants are now being regulated and capped by government, which is forcing companies to "internalize" these costs and improve their pollution control technologies. We have already seen the huge health and environmental benefits of having companies and industry tackle smog and acid rain pollution in the 1980's and 1990's.
We're now seeing the capital markets begin to incorporate the external costs of global warming, especially in Europe, where government-supported trading systems and pricing mechanisms (a price per ton of carbon dioxide) have fostered a burgeoning $30 billion-a-year carbon emissions trading program.
But we still have a long way to go to achieve fully sustainable accounting, especially here in North America. Among the biggest challenges is an enormous oil-extraction project underway in Alberta, Canada. Fueled by rising oil prices and declining global oil reserves, US and Canadian oil producers are impacting millions of acres of Alberta's pristine boreal forest to produce oil from a sticky mud-like substance known as tar sands. Tar sands oil production has doubled over the past 10 years, to 1.1 million barrels a day; future growth is expected to quadruple as oil companies pour well over $100 billion into new production and refining capacity on both sides of the border.
If ever there was a project where sustainable accounting is needed, Alberta tar sands oil extraction is it. Greenhouse gas emissions associated with tar sands development are nearly three times higher than traditional oil extraction and refining. The mining and processing also requires huge amounts of water, much of it pumped from the Athabasca River, which flows 765 miles through Aboriginal land and small communities and supports fish and other wildlife.
There has been some progress in reducing the project's environmental footprint: Canadian oil company Suncor reduced the amount of water it uses to produce a barrel of oil from tar sands by half between 2002 and 2006. Still, University of Alberta ecologist David Schindler projects that future tar sands growth, combined with climate change, could cut the Athabasca River's low winter flows 50 percent or more by mid-century. "What they want to withdraw is an unsustainable amount," Schindler told the Los Angeles Times in July 2007.
Stay tuned. Balancing sustainability and capitalism in the Alberta tar sands will be a long-running issue -- and hugely important -- as we try to achieve a sustainable society.
Mindy S. Lubber is president of Ceres, a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges.
