Canada-US oil sands deal alarms environmentalists

By James Stairs

Montreal (dpa)- Negotiations between the United States and Canada to launch a major expansion of the huge Canadian oil sands reserves have environmentalists concerned and the Canadian government scrambling to fit the plan into its new “green” agenda.

Politicians and industry representatives were scrambling Tuesday after Radio Canada, the French language arm of the Canadian Broadcasting Corporation (CBC), broadcast the minutes of a January 2006 meeting, where Canadian and American government officials and oil executives met in Houston, Texas to plan a five-fold increase in production.

The report also revealed that at the meeting, organized by the Canadian Department of Natural Resources and the US Department of Energy, industry representatives argued that Canada would have to “streamline” its environmental regulations in order to facilitate the plan.

Canadian Prime Minister Stephen Harper responded to the report quickly, saying that there would be no changing of environmental rules to accommodate any expansion of Canadian natural resources, including the oil sands.

Oil industry representatives also downplayed the report.

“There is no promise. It’s up to the market whether this thing goes slow or fast,” said Greg Stringham of the Canadian Association of Petroleum Producers.

The Canadian oil sands sit below approximately 150,000 square kilometres of land located in the north of the province of Alberta, and hold an estimated 1.7 to 2.5 trillion barrels of petroleum.

Canada has the world’s second largest oil reserves, after Saudi Arabia, and is the largest provider of petroleum to the US. Projects in the oil sands alone send an estimated 1 million barrels a day to American markets.

US president George W Bush has advocated reducing US dependence on Middle Eastern oil and building up domestic reserves. Canadian resources are seen as central to the plan.

Raising exports from the tar sands to approximately 5 million barrels a day would comprise almost a quarter of US consumption and place Canada as the source of almost half of total US oil imports.

But environmentalists argue that the proposed expansion would triple the amount of greenhouse gas released into the atmosphere during extraction and refining from the tar sands, contaminate water and destroy huge swathes of forest and wetlands, endangering wildlife.

The oil industry should reduce its dependence on fossil fuels to fight climate change, not increase production, groups like the Sierra Club argue.

The issue of US needs arose at a time when the Canadian government is frantically attempting to convince Canadians of its environmental credibility.

Since Harper entered office, he has argued that the environment was not a priority at the expense of a healthy economy.

The government’s Clean Air Act, released in October, and its reluctance to comply with the Kyoto Protocol on climate change were criticized by the opposition and environmentalists as being soft on polluters and subservient to business interests.

But Harper has been forced to change direction in recent months. Opinion polls show the environment as the predominant political issue in Canada.

The combination of climate change awareness brought on by unpredictable weather and the emergence of Stephane Dion, whose surprise win of the leadership of the opposition Liberals in December was credited to his strong environmental platform, has pushed the issue to the fore.

Resignations and defections between political parties have also shifted the balance of power in the Canadian parliament, leaving Harper, who holds a fragile minority, dependent on the left-leaning New Democratic Party (NDP), who have made their support contingent on improving his environmental record.

Harper has bowed to the pressure, replacing his environment minister and embarking on a new “green”agenda, earmarking 2 billion dollars for clean-air initiatives.

But the oil sands industry remains a question because of its reliance on fossil fuels – a reality that appears to diverge from the government’s revamped course.

The oil in the sands is encased in bitumen, a tar-like substance which is extracted, then refined.

An estimated ten per cent of bitumen can be accessed through strip-mining. The rest has to be drilled out.

To extract the bitumen, steam is injected into the ground, softening the compound and allowing the oil to be pumped to the surface.

Millions of tonnes of greenhouse gas are sent into the atmosphere because the process, from extraction to refining, is powered by natural gas.

This has companies with projects in the region considering their options.

Husky Energy Inc and Total SA, companies with tar sands projects, recently announced that they are considering powering the extraction and refining processes with nuclear energy.

Officials in Harper’s cabinet have publicly thrown their support behind the idea because of the zero-emissions quality of nuclear power. But environmental groups have vowed to fight the plan, arguing nuclear waste is no better for the environment than greenhouse gases.

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