by Keith McLaughlin

22-03-08

In Alberta’s tar sands lies the equivalent of 175 bn barrels of oil. Canada is already the United States’ largest energy supplier; each day, more than a million barrels of oil from the tar sands flows south.
The tar sands have been developing rapidly; dozens of mostly foreign oil companies are currently stripping the landscape to get at the bitumen which saturates the soil. The current capital investments in Alberta’s tar sands total more than $ 100 bn. Grouped together, the tar sands encompass over 140,000 sq km, a mass larger than all of Greece.

Global reserves of conventional oil are declining; virtually the entire world reserve of unconventional oil lies in Canada. Overall, Canada has the world’s second-largest proven oil reserves.
The geopolitical implications of this fact cannot be understated; hungry eyes from Washington to Beijing are looking to Alberta to satisfy their energy cravings. Canada could supply the Unites States with all its energy needs and sustain them for a century but continued rapid development of the tar sands would be needed to accommodate such a lofty order. The foundations for such a future are already being laid.

Analysts suggest that by 2045, Alberta could produce more than 11 mm barrels of oil per day, more than enough to quench America’s oil thirst. America is naturally obsessed with oil security; after 9/11 this condition worsened as the US government realized its efforts to secure Middle East oil can be tumultuous, chaotic and costly. Alberta presents a friendly alternative to our Yankee brethren; we have both a generous tax regime and a charitable royalty rate in Alberta for American investors.
Plus, as the Asian market continues to demand more and more oil, Alberta will become very attractive to companies from across the Pacific. The tar sands are the world’s last great prize, the future of the world energy market.

The dawning of this golden age is a mixed blessing. The prosperity of Alberta’s oil industry comes at a price; the acute social, environmental and political ramifications of Alberta’s situation need to be considered. Alberta can develop this resource thoughtfully and responsibly or we can ravenously and aggressively pillage it. Alberta can reap the benefits of this economic bonanza sensibly and democratically or we can simply give away what is technically the people’s resource for bargain-basement prices.
There is a difference between becoming an energy superpower and becoming an energy colony. Alberta can use its newfound international political clout to better its society, province and country, or our political institutions can be manipulated and spoiled by the pressures of the global oil market and its nefarious players.

Personally, I feel that the leaders of this province have not thought this through so far, and that is not changing. We are moving full-speed ahead -- planning just for today, at the expense of future generations. Alberta should plan better; our environment, our democracy and our society’s interests need to be considered. Presently, it seems American and corporate interests drive Alberta’s tar sands policies.
Extracting oil from tar sands is a very dirty and environmentally costly exercise. Trees, which are precious resources in the battle against climate change, are ploughed down so the landscape can be scraped. Alberta’s boreal forests are being destroyed. Refining oil from tar sands also uses up much of Alberta’s water: it takes about 5 barrels of water to produce 1 barrel of crude oil.

The Alberta government has granted licenses for oil companies to divert 349 mm cm of water from the Athabasca River every year. Producing oil from tar sands creates five times as much greenhouse gases than does production of conventional oil. Due to its tar sands development, Alberta currently emits 40 % of Canada’s total greenhouse gases.
By 2011, tar sands plants are expected to emit double what they do now, going from the equivalent of 40 mm tons of CO2 to 80 mm tons of CO2 per year. The Stelmach government’s recent climate change plan has been criticized as a “sick joke” by environmental groups; earlier this year, Alberta announced that it will continue to allow emissions to rise until 2020, but by 2050 the province says it plans on reducing emission levels by 14 % below 2005 levels. This plan is by far the least ambitious in the country; Alberta will hold back the climate change efforts of this nation all by itself with its meagre plan. Alberta’s governing philosophy appears to have no room for environmental concern within its dictum and the recent climate change plan is indicative of this fact.

The Alberta government is most concerned with rapidly developing the tar sands, primarily for the purposes of American export; environmental responsibility is simply not something the government is cognitive of.
Sometimes I wonder, whose oil is it anyway? Supposedly, the resource belongs to you and me as citizens; we trust the government to do what’s best for us with the resource, again, supposedly. The provincial government currently has over 3,200 tar sands lease agreements, mostly with foreign oil companies. During the Klein years, lease agreements were practically given away to whoever wanted one. Still, as Albertans we have never had a public discussion about the rapid rate of tar sands development. In practice, this bounty of ours appears to be more of an American resource -- we just happen to sit on it. Seventy % of the oil extracted from the tar sands is directly exported to the United States by pipeline.

Curiously, no pipelines flow eastwards from Alberta, to the rest of Canada. Eastern Canada is thus forced to import 40 % of its oil from OPEC countries. The Alberta government prioritizes the energy security of Americans over Canadians.
This also makes me wonder, is Alberta a Canadian province or a de facto 51st state? Alberta gives lease agreements away willy-nilly, our generous tax and royalty regimes amount to a corporate subsidy; cognizant of these realities, it is a challenge to consider Alberta’s oil a public resource.

There is a different path Alberta can take that could realistically transform this province from an energy colony of the United States to a global energy superpower. Alberta could choose to charge the same royalties that foreign governments charge. Ironically, these same foreign entities have descended on our province, beckoned by our lax tax and royalty regimes; they develop our oil resources for cheap, yet within their own borders they wisely protect and manage their own resources.
Alberta could follow the lead of states such as Norway, which manages the economic benefits of its oil industry with the public interest in mind. Norway has stored away its resource revenue; it has a public trust that contains over $ 250 bn.

Alberta’s Heritage Fund, created in the 1970s, has amassed a paltry $ 16.6 bn. Alberta could choose to assert its ownership over the tar sands and manage the resource with the public interest in mind. To me, this appears to be an unrealistic expectation, given how much the influence of the international oil industry has already corrupted Alberta’s democracy.
It is hazardous to a democracy when one industrial sector dominates the economy; its influence becomes too vast and begins to interfere with the interests of the people. What is best for oil industry profits is not always best for Alberta, its environment and its society.

That is why the Alberta government needs to manage the tar sands with the public interest in mind. Thoughtful, forward-looking management policies need to replace the prevailing policies that are scarring our landscape and tainting our democracy. Otherwise, our province, our democracy and society will be dominated by the politics of oil and we will become nothing more than an energy colony of the United States.
We will become Saudi Alberta.

Source: www.themeliorist.ca