Canada, the world and the tar sands 2011

Written by  //  December 9, 2011  //  Canada, David Kilgour, Oil & gas  //  2 Comments

NASA images of Athabasca 1984 and 2011
Keystone Pipeline Project
(TransCanada Pipeline) The U.S. $13 billion Keystone pipeline system will play an important role in linking a secure and growing supply of Canadian crude oil with the largest refining markets in the United States, significantly improving North American security supply.
In June 2010 TransCanada commenced commercial operation of the first phase of the Keystone Pipeline System. Keystone’s first phase was highlighted by the conversion of natural gas pipeline to crude oil pipeline and construction of an innovative bullet line that brings the crude oil non-stop from Canada to market hubs in the U.S. Midwest.
Keystone Cushing (Phase II), an extension of the Keystone Pipeline from Steele City, Nebraska to Cushing, Oklahoma went into service in February 2011. The 36-inch pipeline connects to storage and distribution facilities at Cushing, a major crude oil marketing/refining and pipeline hub.
The proposed Keystone Gulf Coast Expansion Project is an approximate 2,673-kilometre (1,661-mile), 36-inch crude oil pipeline that would begin at Hardisty, Alberta and extend southeast through Saskatchewan, Montana, South Dakota and Nebraska. It would incorporate a portion of the Keystone Pipeline (Phase II) through Nebraska and Kansas to serve markets at Cushing, Oklahoma before continuing through Oklahoma to a delivery point near existing terminals in Nederland, Texas to serve the Port Arthur, Texas marketplace.
This October 2007 article from the WSJ Where Has All The Oil Gone? — After Sitting on Crude, Speculators Unload It. The World’s Eyes Fall on Cushing, Oklahoma explains the importance of Cushing “Investing in oil is more complicated than buying stocks or bonds or bars of gold. Most institutional investors don’t want to actually own crude. To bet on it, they invest in oil futures — agreements to buy or sell oil at a set date in the future. They usually unwind the contracts before the oil-delivery date arrives, eventually taking their profits or losses without actually handling the oil. If they leave the contracts in place, oil must be delivered to an officially designated delivery point. Cushing is the main such point in the U.S.”
See also Wednesday-Night.com
NRDC November 29 2011 — Pipeline and Tanker Trouble: The Impact to British Columbia’s Communities, Rivers, and Pacific Coastline from Tar Sands Oil Transport (pdf)

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Christopher Sands: Calling Harper’s Bluff on Keystone
(Hudson Institute) On balance, while there are plenty of threats and bluffs coming out of the U.S. where Keystone is concerned, it’s Canada and Stephen Harper whose bluffs are being called. It’s certainly true that there are other suitors for Canadian oil, but until there is a way to get it to the Pacific, Harper’s attempt to fashion a “third option” foreign policy for Canadian oil exports is no more convincing a threat to Washington, D.C. than Pierre Trudeau’s “third option” response to the Nixon administration’s economic nationalism was.
The country that gave the world heavyweight champions Joe Louis and Mohammed Ali, not to mention costumed wrestlers, is accustomed to bluff and bluster. Empty threats are not effective with most Americans and project Canada’s weakness and frustration in the midst of negotiations.
No ‘credible information’ to support claims oilsands are green, says Environment Canada
(Canada.com) Canada lacks “credible scientific information” to support its claims that oilsands development is environmentally responsible, putting the industry’s economic future in jeopardy, says newly-released briefing material prepared for Environment Minister Peter Kent and senior management in his department.
“National and international concern over the environmental footprint of oilsands production represents a growing threat to the economic future of the industry,” said the briefing material, sent on June 4 by Assistant Deputy Minister Michael Keenan and released to Postmedia News on Thursday evening through access to information legislation.
6 December
Tar Sands and Resource Development on Indigenous Land – the Historical Context
by Daniel T’seleie
(Canadian Youth Delegation) The government’s goals, although not explicitly written out in any policy or legislation, remain the same; to profit from resource extraction by taking away our ability to live off the land, forcing us to participate in the wage economy, and destroying our cultural and spiritual links with our land through assimilation.
Despite the token actions of the government towards reconciliation – like the Truth and Reconciliation Commission, federal apologies for Inuit relocation and Indian residential schools, and RCMP inquiries into slaughter of Inuit sled dogs and participation in Indian residential schools – their unwritten mandate remains the same.
29 November
Canadian tar sands project carries huge risks, warn environmental activists
Environmentalists say plan to pipe crude across Alberta and load it onto supertankers bound for Asia could lead to ‘catastrophe’
(The Guardian) A new report from environmental groups in the US and Canada warns that plans to pipe the crude across the Rocky Mountains to the Pacific coast in British Columbia, and then load it onto supertankers bound for Asia, carries enormous risks.
13 November
Canada Eyes Asia After U.S. Delays Keystone Project
(Reuters/Planet Ark) Canada will try to sell more of its energy products to Asia after Washington delayed a decision on whether to approve the Keystone XL Canada-to-Texas oil pipeline project, Prime Minister Stephen Harper said.
“This does underscore the necessity of Canada making sure that we are able to access Asia markets for our energy products,” Harper told reporters on Sunday at the Asia-Pacific Economic Cooperation leaders’ meeting in Hawaii.
“That will be an important priority of our government going forward and I indicated that yesterday to the president of China.”
11 November
Keystone delay could kill project, Flaherty says
(CBC) Finance Minister Jim Flaherty says the decision to delay approval of the Keystone XL pipeline may kill the project and could add momentum to efforts to open up the Asian market for Canadian oil.
Flaherty was referring to another pipeline, the Northern Gateway project proposed by Calgary-based Enbridge, to carry oilsands crude from near Edmonton through the Rocky Mountains to a terminal at Kitimat, B.C., where it would be loaded aboard tankers.
17 October
Would Slowing Oil Sands Development Make us Richer, Cleaner and More Powerful?
By Taylor Owen, Senior Editor of opencanada.org
The development and management challenges of the Canadian oil sands strikes at the heart of some of Canada’s most vexing policy challenges: interprovincial relations, climate change policy, global environmental responsibility, US relations, Asian trade expansion.
At the root of this policy quagmire is a perceived conflict between being an energy superpower and living up to our climate responsibility. But is this a false choice? What if we could both gain international power and assist the world in meeting its carbon reduction goals. And get richer by doing it.
14 October
Oil Sands: Canada’s 10 Ethical Challenges
ENERGY & EQUITY: How we turned a blessing into a curse, and ways to atone. Part one.
By Andrew Nikiforuk,
4 October
Oil sands imports could be banned under EU directive
Fuel from oil sands projects may be banned under EU proposals, though UK among member states who may oppose the plan
(The Guardian) Oil from controversial and environmentally destructive tar sands is likely to be all but banned from Europe after a decision on Tuesday. The move also casts doubt on the future of other controversial energy sources such as shale gas.
28 September
Nobel laureates press Harper to oppose Alberta oil-sands expansion
(Globe&Mail) Archbishop Desmond Tutu is one of eight Nobel Peace Prize winners who have signed a letter asking Prime Minister Stephen Harper to do what he can to stop the growth of Alberta’s oilsands.
The letter comes three weeks after several peace prize laureates wrote a letter to United States President Barack Obama asking him to block the proposed Keystone XL Pipeline, which would increase oil sands exports to the United States.
Sinopec, the oil sands and justice delayed
(Globe & Mail) Workers on Canadian Natural Resources Ltd.’s large Horizon project in Alberta’s oil sands knew something was wrong with the way a crew of Chinese workers flown in by a unit of China’s state-owned oil giant Sinopec was building a massive storage tank on the site back in 2007. Later that day, the support structure holding up the metal tank’s roof collapsed, killing two Chinese workers, injuring two others, and launching a tangled saga that would see an arm of Sinopec, formally known as China Petroleum and Chemical Corp. and one of the largest companies in the world, wage a legal battle to avoid facing health-and-safety charges in a Canadian court. Next week, that issue goes before Alberta’s Court of Appeal. A trial on the charges that came after the workers’ deaths has now been delayed another year, until the fall of 2012.
23 September
The Keystone debate: Forget the pipeline, this is about the oilsands
Leave aside the fierce debate over the pipeline itself, there is another issue at stake here: the future of the northern Alberta oilsands that need an outlet for their heavy bitumen-laced oil that those refineries on the Gulf Coast can provide.
(CBC) When supporters of the Keystone XL pipeline tout the benefits of TransCanada’s $7-billion plan to ship crude oil from Alberta to Texas, they have a long list.
The extended artery will provide energy security within North America, they say. It would be the safest pipeline ever built and will take crude that Canada doesn’t have the capacity to refine to Texas refineries looking for it.
And then there are the jobs the pipeline could spawn: thousands and thousands of them. In a time of economic downturn, it would be a bright light.
Much opposition toward TransCanada’s Keystone XL project focuses on the routing of the proposed pipeline extension over the Ogallala aquifer and the Sandhills in Nebraska. The aquifer supplies water for drinking and agricultural irrigation to parts of eight U.S. states.
22 September
Oil Sands Controversy: U.S. Groups Use Obscure Trade Law To Push For Sanctions Against Canada
(HuffPost) Conservationists on both sides of the border are using an obscure American trade law normally used against whalers to pressure Canada over its management of the entire industry.
The push comes as protesters continue to fight a pipeline that would bring more oilsands crude from Alberta into the United States.
A coalition of American and Canadian environmental groups has filed an application under what’s known as the Pelly amendment, which empowers the U.S. president to impose trade sanctions against any country weakening international efforts to conserve endangered species — in this case woodland caribou, whooping cranes and dozens of other species of migratory birds.
29 August
PBS Newshour: Tar Sands Pipeline Plan Renews Energy vs. Environment Debate
The proposed Keystone X.L. pipeline would run 1,700 miles through Montana, South Dakota, Nebraska, Kansas and Oklahoma on its way to refineries in Texas. It’s projected to cost $7 billion and carry an estimated 800,000 barrels of oil a day. The plan has galvanized a growing opposition from those who fear it would increase greenhouse gas emissions, as well as the prospects of leaks and spills in environmentally sensitive areas.
BILL MCKIBBEN, environmental activist/writer: this tar sands in Alberta is a big deal. It’s the second largest pool of carbon on Earth, after the oil fields of Saudi Arabia. Jim Hansen of NASA, who was arrested today, really the world’s foremost climate scientist, said — as he was speaking this morning, said, if we go ahead and begin tapping these unconventional energy sources, of which the tar sands are the biggest example, it is — and here I quote – “essentially game over for the climate.”
Since, for once, Obama can stop a project without having Congress in the way, this has become the focal point. And these arrests have — actually now over 500 people. The numbers are just growing and growing day after day.
26 August
Keystone pipeline clears major hurdle
(CBC) The U.S. State Department’s environmental analysis of TransCanada’s proposed Keystone XL pipeline has given the project a thumbs up.
The assessment moves the administration of President Barack Obama a step closer to a final decision on the pipeline. It now has 90 days to determine whether the controversial project is in the national interest of the United States. (Boston Globe) Obama officials back oil pipeline from Canada Groups warn of danger to environment
Tar sands activists stand strong as State Department announces support for Keystone XL pipeline
22 August
Tar Sands and the Carbon Numbers
(NYT Editorial) This page opposes the building of a 1,700-mile pipeline called the Keystone XL, which would carry diluted bitumen — an acidic crude oil — from Canada’s Alberta tar sands to the Texas Gulf Coast. We have two main concerns: the risk of oil spills along the pipeline, which would traverse highly sensitive terrain, and the fact that the extraction of petroleum from the tar sands creates far more greenhouse emissions than conventional production does.
The Canadian government insists that it has found ways to reduce those emissions. But a new report from Canada’s environmental ministry shows how great the impact of the tar sands will be in the coming years, even with cleaner production methods.
It projects that Canada will double its current tar sands production over the next decade to more than 1.8 million barrels a day. That rate will mean cutting down some 740,000 acres of boreal forest — a natural carbon reservoir. Extracting oil from tar sands is also much more complicated than pumping conventional crude oil out of the ground. It requires steam-heating the sands to produce a petroleum slurry, then further dilution.
19 August
Is Canadian Oil Bound for China Via Pipeline to Texas?  (See Judy Geologist Comment)
(National Geographic News) The proposed Keystone XL pipeline that would ship oil from Northwest Canada south through Mid-America to the Texas Gulf Coast has drawn sharp opposition from environmentalists worried about Canadian forests, greenhouse gases, and potential leaks.
But one line of attack is more about economics and geopolitics than land and water. And it strikes at pipeline proponents’ central argument that Keystone XL would buttress U.S. energy security. Opponents contend instead that the pipeline’s petroleum could largely bypass the American markets and be shipped to Asia.
10 August
Welcome to Bizarro World
Analysis by Stephen Leahy
(IPS) – Canada and the United States are now the centre of Bizarro World. This is where leaders promise to reduce carbon emissions but ensure a new, supersized oil pipeline called Keystone XL is built, guaranteeing further expansion of the Alberta tar sands that produce the world’s most carbon-laden oil. “It’s imperative that we move quickly to alternate forms of energy – and that we leave the tar sands in the ground,” the U.S.’s leading climate scientists urged President Barack Obama in an open letter Aug. 3.
8 August
Oil Sands to Raise Emissions, Canadian Report Says
(NYT | Green Blog) The Canadian government has long fought efforts by politicians and environmentalists in other countries, including the United States, to characterize oil sands production as “dirty oil.” But an analysis quietly released late last month by its environmental agency indicates that the tar-like deposits will become an increasingly significant source of the country’s greenhouse gas emissions by the end of the decade.
Canada’s Emissions Trends,” a peer-reviewed report by the agency, Environment Canada, forecasts that greenhouse gas emissions from the oil sands will triple to 92 million metric tons, or 101 million short tons, by 2020 from a base level of 30 million metric tons, or 33 million short tons, in 2005.
26 July
Natural resources minister tries to sway U.S. on controversial Keystone pipeline
The Republican-controlled House of Representatives has passed a bill to force a decision on the Keystone XL pipeline by Nov. 1. But the legislation is now in the hands of the U.S. Senate which is controlled by Democrats, many of whom are vehemently opposed to the project.
26 July
David Kilgour: Alberta Doing Business with China
China is not the oil sands largest foreign investor, but the superpower is accumulating stakes in Canada’s energy sector faster than any other nation. The most recent Chinese purchase – the $2 billion acquisition of struggling oil sands firm Opti Canada. It has critics sounding the alarm about losing control of our own resources, and dealing with a country known for human rights violations and poor environmental practices. Should businesses and government consider more than money in energy deals with China? What are the implications of saying “no”? Does too much Chinese investment really threaten our control of our own resources? Joining us for this discussion is Gordon Houlden, Director of the China Institute at the University of Alberta; and David Kilgour, a former Alberta MP and Canada’s former Secretary of State for Asia-Pacific.
20 July
Cnooc Agrees to Buy Opti Canada for $2.1 Billion to Expand Oil-Sand Assets
Cnooc Ltd, China’s biggest offshore oil producer, agreed to acquire Opti Canada Inc. (OPC) for $2.1 billion in cash and debt to increase its oil-sands reserves, and pledged to buy more energy assets globally.
Cnooc will pay $34 million in cash for the Canadian company’s shares, $1.18 billion for some notes and assume $825 million of debt, Opti said in a statement today. A shortage of cash to fund the extraction of heavy oil embedded in sand forced the Calgary-based producer to seek bankruptcy protection on July 13. … China Petrochemical Corp. and Cnooc are among companies that have invested more than $200 billion in ventures in Alberta to tap the world’s third-largest oil deposits after Saudi Arabia and Venezuela. Chinese companies have bid more than $88 billion for oil, natural gas and power assets overseas in the last five years to meet demand in the world’s biggest energy-consuming nation.
28 June
Oilsands wealth grew 23-fold since 1990
(CBC) The value of Canada’s oilsands grew 23-fold to $441 billion from $19 billion between 1990 and 2009, Statistics Canada reports.
That put the value of crude bitumen from the oilsands higher than the value of coal, crude oil and natural gas combined, according to a report on the economy and the environment released Tuesday. The oilsands only became Canada’s highest value energy resource in 2006, when they surpassed natural gas.
The value of the oilsands has grown faster than their development.
24 June
Junk Science Letters: I will be very hard to satisfy on oil sands – David Schindler
(National Post) Ms. Kraus is absolutely correct on her final point. I will be very hard to satisfy when it comes to the environmental performance of the oil sands. I have worked in the area for 40 years, and I have witnessed many serious environmental issues propagandized or hidden, rather than studied and corrected. This must change, if we are to make balanced decisions on expansion of the oil sands.
22 June
Witness: To the Last Drop
(Al Jazeera) Residents of one Canadian town are engaged in a David and Goliath-style battle over the dirtiest oil project ever known.
The small town of Fort Chipewyan in northern Alberta is facing the consequences of being the first to witness the impact of the Tar Sands project, which may be the tipping point for oil development in Canada.
The local community has experienced a spike in cancer cases and dire studies have revealed the true consequences of “dirty oil”.
Gripped in a Faustian pact with the American energy consumer, the Canadian government is doing everything it can to protect the dirtiest oil project ever known.
8 June
Without Keystone XL, oil sands face choke point
(Globe & Mail) If the $7-billion (U.S.) project is not built, the energy sector faces the prospect of being “landlocked in bitumen,” with no way to get mounting crude production to market. Without the massive new line, whose environmental impact has become the subject of heated debate in the U.S., existing pipelines could be constrained in as little as four years.
31 May
TransCanada’s Keystone pipeline has new leak
(CBC) Kansas spill comes 2 weeks after Oklahoma’s
7 April
U.S. mayors want ‘dirty’ oil discussion in Canadian election campaign

(The Tyee/The Hook) They don’t want our “dirty” oil — and they want to kill the Canadian-built pipeline that would pump it across their fertile plains.
An outspoken coalition of American mayors is urging Canadian voters to grill federal election candidates on clean-energy alternatives to Alberta’s oilsands. They oppose a plan that would see Alberta’s “tar sands” oil pumped across their country to the Texas Gulf Coast through the $13-billion Keystone XL pipeline.
12 April
Sinopec to pay $4.65 billion in oil sands deal
(Reuters) – China’s state-owned Sinopec plans to buy ConocoPhillips’ stake in the huge Syncrude project in Canada’s oil sands for $4.65 billion, marking one of the Asian country’s largest investments ever in North America.
7 April
Oilsands more than a PR problem: Ignatieff
Concerns raised this week by U.S. President Barack Obama regarding the oilsands need to be addressed with federal action to protect the environment and not to boost the industry’s image, Liberal leader Michael Ignatieff said Thursday.
“It’s not going to be fixed by better public relations,” Ignatieff said, after touring a seniors home in this suburb north of Montreal. “It’s a problem of substance.”
Obama hinted Wednesday that his government might be having second thoughts about approving a controversial 3,200-kilometre pipeline project linking the oilsands to the American market.
5 April
Alberta conservation plan stuns oil patch
The Alberta government has proposed new environmental rules that would revoke a number of oil sands leases – including those which already have active projects – in an effort to protect sensitive habitat, wildlife and forest land in the most industrialized area of the province.
Alberta is under harsh international scrutiny for the way it manages the development of the oil sands, but Tuesday’s announcement sent shock waves rippling across an industry that has spent vast sums of money to acquire land in the region.
2 April
No to a New Tar Sands Pipeline
Later this year, the State Department will decide whether to approve construction of a 1,700-mile oil pipeline from Canada to the Texas Gulf Coast called Keystone XL. The underground 36-inch pipeline, built by TransCanada, would link the tar sands fields of northern Alberta to Texas refineries and begin operating in 2013. The department should say no.
State is involved because the pipeline would cross an international boundary. Secretary Hillary Rodham Clinton first said she was “inclined” to support it, but has lately sounded more neutral. An environmental assessment carried out by her department last year was sharply criticized by the Environmental Protection Agency for understating the project’s many risks.
25 March
We don’t suppose this announcement had anything to do with the up-coming election?
INCREASE IN OILSANDS ANTI-POLLUTION EFFORTS ANNOUNCED
(RCI) Canada’s federal government has announced a stepped-up effort to protect against pollution from Alberta’s oilsands industry. Environment Minister Peter Kent says new monitoring stations will be set up along the Athabasca River from Fort McMurray to Wood Buffalo National Park. Mr. Kent says the increased monitoring will cost about $20 million a year. He said industry will pay most of the costs. He says the new system will combine air and water monitoring data in response to concerns that some pollutants are falling from smokestacks. The announcement is in response to recommendations from a federally appointed panel of scientists. The panel was created last fall after several scientific reports found oilsands contaminants in the Athabasca river at levels toxic to fish.
11 March
Water Checks Deficient At Canada Oil Sands: Report
(Reuters/Planet Ark) A government-sponsored scientific committee studying water monitoring in Canada’s oil sands has backed assertions that multibillion-dollar energy developments are polluting waterways and it urges more stringent oversight.
The report by the independent scientists, appointed by Alberta Premier Ed Stelmach, said an incendiary study by water ecologists last year appeared to be right in its contention that toxic substances downstream from the developments do not occur naturally.
7 February
Felix von Geyer: Tar sands are a blot on Canadian politics – as well as the landscape
The money to be made from Canada’s tar sands has blinded its government to the risks to water, climate and the biosphere
(The Guardian) … the US also has its eyes on Canada’s relatively vast freshwater resources as it rapidly depletes its own aquifers.
But, as Harper seeks to sell tar sands crude and further contribute to anthropogenic climate change, Canadians should bear in mind as they count the cost of their carbon footprint that there are alternatives to fossil fuels but really no alternatives to fresh water.

27 January
Oil sands doc alerts the world to Canada’s Tipping Point
(Straight.com) There are many wrinkles, but the doc left one major question: Is the pricetag associated with Canada’s economic prosperity costing us the total value of the planet?
8 January
Stop-work order issued after explosion rocks oilsands plant

7 January 2011
Harper defends oilsands as ‘ethical’
Prime Minister Stephen Harper has backed his new environment minister with a strong defence of the Canadian oilsands, saying they are an important source of job creation and the world should know this country is an “ethical society” which will reliably provide the resource.
Workers run for lives after CNRL upgrader explodes near Fort McMurray

2 Comments on "Canada, the world and the tar sands 2011"

  1. Professor Judith Patterson September 6, 2011 at 12:08 pm · Reply

    UPDATE: I just did a search – on dial up internet this is no quick task – and I was wrong! The Ogallala aquifer is quite shallow. So I suppose contamination would be possible. However, in ranking what to worry about, I would put the greenhouse gas emissions of production and combustion of tar sands oil way above the potential for contamination of the aquifer.
    5 September
    I am still not convinced of the threat that the Keystone pipeline poses for the Ogalala aquifer. There is certainly a threat to surficial waters, but this aquifer is deep. Given that oil floats on water, I am not convinced that a spill on the surface could get down and contaminate the aquifer.
    I am also not convinced of the Texas-China link for Athasbasca tar sands. Tankers would have to go to China either around South Africa or South American from the Gulf of Mexico. Has a feasibility study been done on this?
    What there is a genuine concern about is the proposed Northern Gateway pipeline from Alberta to the British Columbia coast, and hence to China. I was out there this summer and there is a big environmental movement against this See Tankers No Thankers. I think this proposed pipeline is a far greater threat. That is a far more likely transport route for Alberta tar sands syncrude to get to China, with abundant environmental risks, not to mention the burning of the oil ultimately.
    And if the pipelines don’t get built, both CN and CPR are looking at getting into the oil shipment business with tanker trains.
    Atmospheric CO2 is now up to 395 ppmv. It was 280 ppmv at the beginning of the Industrial Revolution.

  2. Professor Judith Patterson November 23, 2011 at 11:35 am · Reply

    What … I still find missing from this pipeline discussion – all pipelines – is that enlarging the petroleum infrastructure means more oil, either conventional or synthetic, all of which gets burned and makes CO2. More infrastructure = more petroleum = more CO2.

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