Where Politics Trumps Science Oil is Sure to be Involved

On today’s front page of The Globe and Mail, Canada’s ambassador to the United States in a telephone interview illustrates just how politicized the oil debate has become. It’s no longer about future energy choices that will ensure sustainability. Rather it’s about which is worse – piping oil across the Canadian border to U.S. refiners, or shipping it by railway. In light of the Lac Megantic derailment, 47 deaths, and oil polluted waterways, my ambassador, Gary Doer, is holding a double-edged sword over the head of President Obama when he states “At the end of the day, it’s trains or pipelines.” He goes on to say “that’s just the raw common sense of this thing.”

Well far be it from me to argue with a Canadian ambassador, but there is little common sense in his statement. In fact it is more an implied threat – don’t approve the pipeline and expect oil to come across your borders in substandard tanker cars like the ones that recently derailed at Lac Megantic and won’t you be sorry. For shame Mr. Doer.

The same article associates another contentious point with Joe Oliver, Canada’s Natural Resources Minister. The article states that the Minister remains confident the pipeline would be approved citing that Canada’s oil sands oil would replace heavy oil imported from Venezuela, oil that has similar greenhouse-gas emissions to the stuff coming from Alberta.

Well how nice. The argument is we have friendlier oil than Venezuela, with their anti-U.S. government rhetoric, even though both are sourced from high greenhouse-gas emitters, and therefore, ours is better.

So it’s not about the environment we leave behind for our children and their children. This debate about building a pipeline named Keystone XL comes down to rhetoric from my Canadian political representatives that sound very much like blackmail.

First, if you don’t build the pipeline then we will still send the oil to you overland and won’t you be sorry when a train derails or a tanker truck overturns. And second, you are already accepting dirty oil so why not ours because we like you better.

The real problem is bitumen production continues to be profitable and the lack of government regulatory oversight up here in Canada has given producers license to expand the oil patch without fear of being penalized for poor environmental practices. With world oil prices better than $100 per barrel, synthetic crude remains a very profitable venture and as long as oil prices remain in three-digit territory producers in Northern Alberta and Saskatchewan will continue to develop fields and seek channels to market for the output.

There are only two inhibitors to stop them. The first is the price of oil. If it drops into the low 90s profits will diminish and the producers will mothball future expansion plans. Second, the development of stringent pollution controls regulated by a government watchdog will further inhibit oil sands producers who today, by all accounts, continue to get away with murder. If you don’t believe this last statement then read my posting of July 20, 2013 or my recent headline of July 26, 2013, “Are We the Victims of an Oil Sands Cover Up?”

As a Canadian I strongly believe that development of better extraction technologies that reduce water used in processing and eliminate settling ponds would make oil sands a viable energy source. But to-date the industry has been slow to develop such technologies largely because government has provided no carrot and stick to push producers to innovate. That’s what putting a price on carbon would do but once again, good government policy making and oil tend not to mix.