Bingaman: energy law not meant to block US from purchasing Canadian oil sands

In a boost for the oil industry, the Senate's top energy lawmaker said in the week ended June 13 that he supports House-passed legislation that would make it easier for the federal government to buy high-emissions fuels made from Canadian tar sands.

Senator Jeff Bingaman of New Mexico, the Democratic chairman of the Energy and Natural Resources Committee, said he would back a provision in the House's emergency war-funding bill that could allow the military and other agencies to buy fuel made from unconventional sources of petroleum.

These include tar sands, oil shale and coal-to-liquids, which have been criticized by environmental groups for their large carbon footprints and contributions to global warming.

Those criticisms were addressed in part by a provision of the Energy Independence and Security Act of 2007, which President Bush signed into law in December.

Section 526 of the act prohibits the US government from purchasing unconventional fuels that have higher lifecycle greenhouse gas emissions than conventional fuels.

With current technology, mining and processing tar sands fall under that category.

But Democrats and Republican alike have said that section 526 should not apply to Canadian oil sands, and they have tried to clarify the provision by adding language to an emergency spending bill to fund the wars in Iraq and Afghanistan.

The House passed the war-funding bill last month, and the Senate may take up the legislation soon.

An amendment to the House bill, sponsored by Representative Dan Boren of Oklahoma, effectively allows the federal government to purchase Canadian oil sands, as long as the contracts are not specifically or exclusively for that type of oil.

Bingaman entered the fray over these fuels last week, telling a gathering of the Canadian-American Business Council that he would support a similar measure as the Senate considers the war-funding bill.

Bingaman said he agreed with Boren, a Democrat, that oil derived from Canadian tar sands should not be subject to the US law.

"It is hard to see how section 526 can be enforced against oil sands," Bingaman said.

Bingaman said the mining of tar sands is not a new technology, and that banning oil derived from tar sands was not the intent of the law.

The Canadian-American Business Council meeting this year focused on the Canadian contribution to US energy demands, largely through the use of oil from tar sands.

Coming mostly from the province of Alberta, this oil could increasingly supply the US.

According to the Energy Information Administration, the statistical arm of the energy Department, Canada is the largest exporter of crude oil to the US.

And oil from tar sands is expected to be a large part of Canada's forecasted 74% jump in crude oil production between 2006 and 2030, according to EIA.

But environmental groups say it is tremendously damaging to the environment, emitting three times as much greenhouse gases over its lifecycle as conventional oil, which is simply pumped out of the ground and refined.

Separating oil from tars sands, on the other hand, requires not only large-scale mining - using dump trucks that weigh more than a million pounds - but several processing steps as well, which together means much higher emissions of greenhouse gases.

When it comes to tar sands, environmental concerns also compete with calls for increased energy security.

The second-largest supplier of crude oil to the US, Saudi Arabia, is a member of OPEC, and some in the debate over tar sands have argued that increasing the use of Canadian crude will make the US less susceptible to potential OPEC supply disruptions.

Therefore, it is argued, sources of energy for the US will be more secure.

Some environmental groups, including the Natural Resources Defense Council, take a longer view, however. Elizabeth Martin Perera, a climate policy specialist at NRDC, said the way to energy security is by cutting dependence on fossil fuels altogether and transition to a "non-oil world."

To support that transition, Perera said, there needs to be regulations like section 526, which push the market toward for fuels, such as cellulosic ethanol, with a low carbon footprint.

The meeting comes as energy tops the agenda in Washington. Republicans in the House and Senate have waged a campaign in recent weeks that includes efforts to promote the use of tar sands and oil shale.

New Mexico Senator Pete Domenici, the ranking Republican on the Energy and Natural Resources Committee, tried unsuccessfully last month to attach an amendment that would have repealed section 526 to a flood-insurance bill.

Meanwhile, the Canadian government is making a concerted effort to promote its tar sands.

In the next several months, according to Gary Mar, the official representative of Albert to the United States, the province will host US lawmakers and some of their staff in touring the tar sands area.

Created: June 18, 2008