Oil Sands Truth: Shut Down the Tar Sands

"Tar sands producers stuck over a barrel"

The unspoken part of this "unpalatable" duality is that green-minded folks have just such an equally repulsive "choice". Either be "unreasonable" and "not a part of the solution" by pointing out that CCS and all other Climate Change in the tar sands "solutions" are nonsense, especially when one sees the forms of emissions yet to come from the In Situ developments. There is no solving the climate crisis, preventing deforestation, preserving the Mackenzie River Basin or using the remaining natural gas on Turtle Island in a sane manner-- unless we also prevent the tar sands from operating.

If you say that, you are crazy. If you don't start with that, any of the problems you wish to address in the tar sands continue and in fact, accelerate.


Oil sands producers stuck over a barrel
Big firms forced to choose between untried technology and penalties as Obama plays nice on carbon capture, tough on emissions


February 20, 2009


Canada's oil sands producers are facing an unpalatable choice: Spend billions of dollars on unproven carbon capture and storage (CCS) technology to reduce greenhouse gas emissions, or face a de facto carbon tax when the U.S. government moves to regulate those emissions.

Despite pressure from environmentalists to signal his opposition to oil sands expansion, U.S. President Barack Obama chose to highlight areas of potential collaboration during his visit to Ottawa yesterday.

Noting that the United States has its own problem with dependence on coal-fired electricity, the President said the U.S. and Canada need to co-operate to find technological answers that will reduce the environmental damage resulting from energy production and consumption.

But the leading technological fixes - including CCS - are "not cost effective," he added. The agreement released yesterday commits the two sides to co-operate on developing CCS for coal-fired power plants, but not for oil sands, which Canadian governments and industry will have to finance on their own. Environmentalists warn that the cost of adopting carbon capture may be so high that companies will simply choose to pay any penalty that would be imposed.

The President signalled he will proceed with emission regulations that will put the United States in a leadership position in the global battle against climate change.

"Increasingly we have to take into account that the issue of climate change and greenhouse gases is something that is going to have an impact on all of us and, as two relatively wealthy countries, it's important for us to show leadership in this area," he told a joint news conference.

Most analysts believe the United States is moving toward a system that will force oil sands producers to dramatically reduce their emissions, or see their American customers forced to pay a significant premium to account for the higher emissions required by oil sands projects in comparison with conventional oil.

Prime Minister Stephen Harper has proposed a joint Canada-U.S. regulatory system that would cap emissions and create a cross-border emissions-trading market. But the President gave no indication he supported such a proposal. Instead, Mr. Harper was left to suggest that there would be room for "harmonization" once the United States figures out its own regulatory system.

Oil sands producers are unlikely to fare as well under U.S. regulations as they do under rules adopted two years ago by the Alberta government and similar ones proposed by the Harper government, both of which rely on "intensity targets" that allow vast expansion of oil sands projects so long as industry reduces its emissions per barrel of oil produced.

U.S. oil analyst Kevin Book estimated the oil sands has roughly 40 per cent higher emissions than conventional oil, and said American refiners will have to pay a penalty to use the oil, ranging from $10 (U.S.) to $20 a tonne of carbon dioxide. "What this suggests is that the United States is going to charge its No. 1 trading partner somewhere between $1-billion and $2-billion [U.S.] a year for its own energy security," said Mr. Book, an analyst with Friedman Billings Ramsey & Co. Inc.

To avoid those anticipated U.S. regulatory penalties, the oil industry will almost certainly have to count on CCS technology, which diverts CO{-2} from plants and injects it for permanent storage underground.

Alberta is spending $2-billion to subsidize the construction of a half-dozen demonstration plants, and has submissions from 18 companies, including Petro-Canada, Canadian Natural Resources Ltd. and Suncor Energy Inc., but none of the projects have been described in detail and it unclear whether the technology will ever be commercially viable.

The industry consortium estimated in 2007 that it would cost roughly $80 a tonne of captured CO{-2} to construct a commercial-scale plant, and those cost estimates have climbed since, Eric Beynon, director of the Integrated CO{-2} Network, an industry group, said yesterday.

David Collyer, president of the Canadian Association of Petroleum Producers, said the industry is comfortable with the U.S. President's focus. "I think the message was very much one of pro-actively getting after technology to see if we can address the challenges we have in front of us, and that's the largest lever we have," Mr. Collyer said. "And that fits very well with where our industry has been and our view that we're not looking for special treatment for oil sands."

With files from reporter Nathan VanderKlippev in Calgary


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