Oil sands under attack on environment
The industry is accustomed to defending its image in North America, but it now faces a multifront war, with opposition growing from Norway to Washington
Shawn McCarthy
Ottawa — Globe and Mail
Sep. 15, 2009
The environmental battle over Alberta's oil sands is going global, forcing the industry to respond to new attacks on its record and putting fresh pressure on Ottawa.
The Calgary-based industry is accustomed to defending its image in North America, but it now faces a multifront war. That growing global opposition is highlighted by its role in today's federal election in Norway, where the state-owned oil company's plans for the oil sands have sparked controversy.
As well, a documentary that premiered in Switzerland and is now playing at the Toronto International Film Festival depicts the projects' devastating environmental impact; and a delegation of Chinese journalists is planning a visit to the scarred landscape of northeastern Alberta.
At the same time, U.S. activists are continuing their attacks in Washington, scheduling a news conference this week ahead of Prime Minister Stephen Harper's visit with President Barack Obama to highlight the dramatic increase in emissions that would occur if oil sands production is expanded as planned.
The industry expects the anti-oil sands campaigns will heighten in the runup to the international climate change conference in Copenhagen in December, which aims to replace the Kyoto Protocol with a new, binding international treaty to control emissions.
“We're not surprised that the discussion has migrated overseas to some extent, and we would expect that certainly in the lead-up to the international meeting in Copenhagen, we may see more of that,” said David Collyer, president of the Canadian Association of Petroleum Producers.
Critics are seeking to discourage foreign investment and force Canada to make more-aggressive commitments on climate change by targeting what has become a symbol of Canada's failure to cut emissions: Alberta's massive, open-pit bitumen mines.
The backlash goes beyond some adverse publicity.
Global companies such StatoilHydro ASA or Royal Dutch Shell PLC are encountering growing pressure in their home countries to revisit plans to invest in the oil sands, while Ottawa will have to table a credible climate-change plan – including real limits on oil sands emissions – or face international censure and perhaps even barriers to trade.
The industry is responding. Statoil chief executive officer Helge Lund wrote an op-ed piece in a Norwegian newspaper defending the company's role in the oil sands, while companies are themselves inviting international journalists to visit the Fort McMurray region.
Mr. Collyer expressed optimism that Canadian governments will balance environmental needs with economic development and energy security, and expects the U.S. government to take a similarly “balanced” approach. But he acknowledged there will be mounting pressure on Canada – and on the oil sands – in some international capitals.
The industry executive said oil sands represent only 5 per cent of Canadian emissions, and the country produces a mere 2 per cent of global greenhouse gases.
He said the typical oil-sands project produces 5- to 15-per-cent more carbon dioxide per barrel of oil than conventional oil supplies on a so-called “wells to wheels basis,” which calculates emissions from the production, refining and consumption of the petroleum.
Later this month, Mr. Harper will travel to Pittsburgh to attend a meeting of the Group of 20 nations, where leaders will attempt to narrow the gaping divisions between developing and developed countries, and Europe and North America, in hopes of reaching a climate treaty in Copenhagen.
Mr. Harper has insisted developing countries like China and India must accept some commitment to reduce greenhouse-gas emissions.
But Canada's credibility is undermined by its own modest targets and its failure to even come close to meeting its commitments under the Kyoto Protocol, said Andrei Marcu, a climate-change adviser with Calgary-based law firm Bennett Jones LLP.
The federal government is slated to release a revised climate-change strategy this fall that is expected to force companies to further reduce their emissions per barrel of oil produced, but not include absolute caps that would limit expansion of oil sands projects.
Environmentalists argue the oil sands represent one of the fastest-growing sources of emissions in the world.
They say that in order to protect its domestic oil industry, Canada has been a laggard in the international climate-change debate.
In a report to be released today, Greenpeace calculates total emissions from the oil sands region will triple by 2020 if proposed projects come on-stream.
Environmental writer Andrew Nikiforuk, who wrote the report, said the oils sands will have larger emissions than some mid-sized European countries, including Belgium, Ireland and Denmark.
That prospect has prompted politicians in Norway to assail Statoil for its plans to expand in the oil sands. In fact, Greenpeace has helped instigate the backlash in the Nordic country, hosting Norwegian journalists visiting northeastern Alberta, and sending a delegation, including Mr. Nikiforuk, to Oslo prior to Statoil's annual meeting in May.
In advance of today's vote, virtually every party in the country's multiparty system has said it will review the state-owned company's Canadian strategy after the election. Minister of Environment Erik Solheim is a member of the Socialist Left Party, a member of the governing coalition led by the Labour Party.
He said his party will demand new environmental laws that “will make it impossible for a company like Statoil to enter such [oil sands] projects,” he told the Norwegian daily Aftenposten.
Statoil moved aggressively into Alberta in 2007, when it paid $2.2-billion for North American Oil Sands Corp.
The company says it is committed to reducing emissions in the oil sands, including possible adoption of carbon capture and storage (CCS) technology.
Though many in the oil industry tout CCS has a key to improving its carbon footprint, the technology remains untried and prohibitively expensive without major government subsidies.
With a file by The Canadian Press
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