I guest-hosted TWiE podcast episode 137 a few days ago, an episode devoted to the Alberta oil sands / tar sands. If you ask me (and I realize none of you have :) ) it’s well worth a listen!
The week’s guest was US energy analyst Robert Rapier, who had visited Fort McMurray on a Canadian government junket for journalists. He came back with a five-part essay on his experience, and some valuable, contextualizing factoids.
Shockingly, he showed data suggesting that the Alberta tar sands are now only slightly more greenhouse gas-intensive than “average” petroleum. (In other words, the emissions associated with turning the bitumen into usable oil, are only slightly higher than average.) Heavy oil extracted from California is actually worse!
This creates the situation where – for once – the Harper Government™ hadn’t drifted into fiction, in its years-long lobbying effort to prevent Europeans from labeling tar sands oil as a high-carbon fuel. I never saw that one coming.
Rapier spent time with the Pembina Institute as well, to try to get part of the other side of the story. For instance, though industry touts that it only uses one percent of the annual flow of the Athabasca river, seasonal variations are extreme; one percent of annual flow is equivalent to one-third of daily flow, at certain times of year. And while he wanted to visit nearby First Nations communities, that part of the visit got cancelled at the last minute. (Now, there’s the Harper Government™ I’ve come to know and love… to loathe. :) )
Oil sands projects are apparently now profitable at $75/barrel of “Western Canada Select” grade oil. For context, world prices (using the Brent and West Texas benchmarks) are in the $100-$110 per barrel range – about 60 to 70 cents US per liter. Western Canada Select is currently trading at about an $18/barrel discount, owing to its lower quality and a temporary glut of oil in North America.
But once capital costs are recovered, break-even falls to $30-40 per barrel, which means that economics alone won’t constrain future production. That was troubling, because I’d hoped we could rely on poor geology to limit the oil sands’ emissions. Instead, we need to rely on public policy, and that’s kind of hit and miss. (Or, more accurately, hit and miss and miss and miss and miss…)
Effective advocacy requires good cops and bad cops
Rapier expressed frustration that, while some NGO’s like the Pembina Institute want to work with industry, other groups (like 350.org) want to shut it down entirely.
I had to explain that advocacy requires both a good cop and a bad cop: you need the good cop (Pembina) to come to the table to eventually negotiate an agreement. But you need the bad cop (350.org) to push the goalposts of public expectation waaaaaaaay down-field, or the good cop won’t be able to extract meaningful concessions.
For example, for decades, the US EPA (good cop) could only pass weak, watered-down regulations against coal plants. But in the past several years, the Sierra Club (bad cop) has mounted a phenomenally successful grassroots campaign called Beyond Coal, which has succeeded in shutting down, or stopping construction of, 164 coal plants across America. (There are 359 left.)
That gave the political cover for Obama to effectively mandate carbon capture and storage for any new coal plant in his Clean Air Act last year. Sadly, existing coal plants remain grandfathered to Segregation-era rules. And the right-wing lobbyist group ALEC is coordinating efforts to have as many conservative governors as possible sue the EPA, to stall the legislation.
In many cases, we have the hilarious situation where the good cops and bad cops loathe each other, instead of recognizing that they’re symbiotic. While Michael Moore (bad cop) has become more respectable nowadays, in his earlier years, liberal white-collar New York Times readers tended to scoff at his scruffy blue-collar antics. This, despite the fact that he was their natural ally – and about the only popular figure trying to shift social expectations leftward. In recent decades, Fox News commentators and Tea Party zealots have made it possible for right-wing Republicans to claim to be centrists.
To illustrate how far rightwards the U.S. public discourse has shifted, Obama – a Democrat – claimed two years ago that in the 1980’s, he would have been considered a moderate Republican for his economic policies. A Republican!
Attacking Demand vs Attacking Supply
Mr. Rapier and I debated the wisdom of attacking fossil fuel demand vs. supply. He argued that we should focus our efforts on reducing demand; I argued that we should also constrain supply, given that fossil fuel demand depends on public policy, and public policy is hit and miss and miss and miss (see earlier joke above).
His columns advanced the industry argument that Canada is only 1.8% of the world’s emissions, and that the oil sands themselves only represented 6.8% of those. I countered that the stats were disingenuous, because they exclude the actual combustion of the oil.
As it turns out, Canada reported to the UN that it emitted 699 million tonnes of CO2 emissions in the year 2012. (See the Global GHG’s tab at www.tinyurl.com/EnergyStats) The oil sands produced about 1.8 million barrels per day last year, which, if you do the math, equates to about 340 million tonnes of CO2, which is about half our national total. Any way you spin it, that’s a lot more than 6.8% ! (As it turns out, most of those emissions count against the US ledger, since most oil sands oil is exported to the US.)
Knowing that Rapier’s main concern is coal use, I noted that the Powder River coal basin – the largest coal mining basin in the world, and home to 40% of American coal production – was responsible for only about 4x as many emissions as the oil sands. Anyone concerned with weaning the world off coal, should have a difficult time dismissing the oil sands as rounding error, because they’re on the same order of magnitude as the world’s largest coal operations.
But he did, anyways. :) And my attempts to explain that this was a reductio ad absurdum, were unsuccessful. (If you decide to focus only on significant sources of greenhouse-gas emissions, you’re not going to do anything, because every single source of emissions is tiny compared to the overall total. It’s like saying you’ll keep smoking, because no one individual cigarette on its own will give you lung cancer.)
Basically, Robert’s position – and though I disagree with its premise, I admit that it’s logically consistent – is that you have to attack demand, not supply.
…and finally, that palatable pipeline
On the podcast, I also offered up that while I’m fully opposed to the Northern Gateway pipeline and to coal exports, I could live with the proposed expansion of the TransMountain Pipeline, as long as:
- it only carries refined oil (no diluted bitumen); and
- we get a national 3R carbon tax out of the deal: real, rising, and revenue-neutral
This will no doubt surprise a lot of people, so here’s my reasoning process.
Carbon taxes
Firstly and foremostly, I believe that a carbon tax is the single most effective way for us to reduce our carbon pollution / greenhouse gas emissions. It’s a fairly easy tax to implement (not much bureaucracy is needed) and it’s harder for special interests to game the system, the way they can with cap-and-trade systems.
Carbon taxes correct the market failure to price in the environmental costs of our activities. And they’ll also help create unparalleled opportunities for today’s and tomorrow’s entrepreneurs to flourish. To quote American renewable energy icon Jigar Shah, cleantech is the largest wealth creation opportunity on the planet.
Now, for a carbon tax to be effective, it needs to be real – not just a token few bucks per tonne of CO2. The number also has to be rising, because companies need to know the tax will eventually reach a point where their emissions will start costing them profits. (BC’s $30/tonne tax probably isn’t high enough yet to drive substantial behaviour change.) And the tax needs to be revenue-neutral, otherwise governments will look to cut the tax the moment a recession (or re-election) looms.
It’s been rumoured that Christy Clark was looking to cancel BC’s carbon tax in the run-up to the recent BC election, but decided not to, because it would have blown a Titanic-sized hole in the provincial budget, making her look financially irresponsible to business backers.
So, I want a carbon tax. The Harper Government doesn’t. But is there something I’d be willing to trade off, to get it?
Northern Gateway and coal exports
I won’t budge on Northern Gateway, for two main reasons:
1) it proposes to move massive oil tankers through some of the roughest and remotest waters in North America. This means accidents are probable, the weather could delay any effective response, and it would be easy to cover up. The fundamental asymmetry in power between small towns of 100’s or 1000’s of people, and a global corporate behemoth whose decision-makers’ lives and social circles are insulated by whatever happens to those small towns, means that abuses of power will inevitably occur. It’s human nature. A further risk is that since the oil industry would probably become the region’s biggest employer, locals and local governments would probably be too worried about losing their jobs, to raise even valid complaints.
Worse still, Northern Gateway is proposed to carry…
2) diluted bitumen (“dilbit”). Which is not crude oil. Crude oil floats on water, and industry has had decades to develop techniques of skimming such oil spills off the water surface. Industry isn’t necessarily that skilled at cleaning oil off bodies of water, but at least they’ve had a lot of experience to learn from. Diluted bitumen, though, is a Jekyll/Hyde combination of light hydrocarbons (which float, and are relatively easy to clean) and very heavy hydrocarbons (which sink, and are relatively impossible to clean).
Having a sheen of oil on the surface of a body of water would suck, and a lot of wildlife would die off, but the oil would eventually evaporate away, making recovery possible. But putting hundreds or thousands of square metres of tar on the bottom of a river or lakebed would be apocalyptic for the food chain, because the sticky tar would stay there for relatively forever, all the while slowly leaking into the waters above.
Basically, if an oil spill is like someone breaking their arm – an injury from which they can recover – a dilbit spill is like someone breaking their neck: the world as they know it, may have ended.
The most infamous dilbit spill occurred a few years ago, when Enbridge discharged a million gallons – roughly a tenth of an Exxon Valdez – into the Kalamazoo River in the US. Based on regular oil spills, the clean-up cost was initially estimated to be $5 million. But, of course, this was a dilbit spill. Within two years, costs had ballooned to $767 million – and 10% of the bitumen was still in the riverbed, so Enbridge was ordered to dredge it.
The transportation of diluted bitumen – whether in pipelines, trains, tankers or other methods – is an “infinite risk” situation. Industry arguments that there’s zero probability of anything wrong happening, ring as hollow as nuclear authorities’ assurances about Fukushima. (Up until the tsunami, the Fukushima reactors were actually held up as models of how to build nuclear plants to mitigate all conceivable risks. And boy, did that ever end well… )
As for coal exports, BC would (and should) lose all its environmental credibility if it enacts a carbon tax and other progressive legislation, then contentedly ships American coal to China, where it can give more 8-year-old girls lung cancer in the short-term, while cooking the planet in the medium- and long-term. Keeping that coal landlocked would keep international prices higher, making coal less economically viable than it otherwise would be.
Dealing with Northern Gateway and coal exports leaves us with the Trans Mountain pipeline. Which is also proposed to carry dilbit. (I learned to my horror that it already does.) I can’t support that. But what if it carried refined crude (spills of which would have severe but not catastrophic effects), and I could get my carbon tax?
The TransMountain pipeline
TransMountain would terminate in Canada’s third largest metropolitan area. Any spills would be highly visible; it’s hard to cover things up when people can Instagram the view from their bedroom window, when you’re in the David Suzuki Foundation’s backyard, and when the overwhelming majority of people don’t rely on you for their paycheques. Vancouver being a former Winter Olympics host city, any spills could easily make the international news.
This means that the power dynamic in the Lower Mainland (though not in the Interior and other areas through which the pipeline would pass) is largely symmetrical: there’s much less potential for corporate abuse, because Metro Vancouver’s population and profile mean it can strike back at Kinder Morgan, Enbridge, or any other responsible parties, much harder than residents of Prince Rupert or Kitimat ever could.
And I’ve already explained that I think a good carbon tax will reduce Canadian (and eventually, world) emissions, even if a few additional pipelines get built.
Thus, based on the beliefs that:
- (carbon tax + TransMountain Pipeline) would ultimately reduce our collective emissions faster than (no carbon tax + no pipeline) would; and
- while ecosystems could eventually recover from crude oil spills, a dilbit spill would do irreparable damage,
I wind up with the position that if it gets me the carbon tax I want, and if it only ships refined crude, I could accept an expansion of the Trans Mountain pipeline. (It actually already carries dilbit; this absolutely horrifies me.)
Even if many readers disagree with me – and I imagine most will – I hope they can see that I’ve followed a logically consistent thought process. And that my rationale is ultimately rooted in the goal of reducing our emissions, even if my assumptions about how to do so, are flawed.
And some post-scripts
1. Hilariously, I was one of thousands of people who were prevented from providing their public feedback on the project – despite conditionally supporting one form of it! – thanks to the corruption of the public consultation process, creating an asymmetric advantage favouring the PM’s favourite industry.
2. Given that a strong “bad cop” is about the only hope I have to get what I want out of any “good cop” negotiations, I’ve donated to (and am trying to find time to volunteer for) anti-pipeline and anti-coal train groups such as the Dogwood Initiative. They have a zero-tolerance policy on pipelines and coal trains, and the further they can move those goalposts downfield, the better my admittedly-slim chances are, at getting that carbon tax…
