Will Canada's oil sands make us choose between energy security and climate disaster?

News and commentary about environmental issues.
June 19 2009 10:55 AM

Living on Canada's Oil

Must we really choose between energy security and a climate disaster?

Oil fields. Click image to expand.
Canadian oil sands

Deep in northern Alberta, under the cover of 50,000 square miles of boreal forest, lie spectacular reserves of what the Canadians call "oil sands"—a mixture of sand, clay, and a viscous tarlike form of petroleum that can be transformed into synthetic oil. With oil-sands production at more than 1.2 million barrels per day, Canada, which also produces conventional oil, has quietly passed Saudi Arabia to become the top supplier to the United States. U.S. government analysts expect that production could triple again by 2030, lessening our reliance on Middle Eastern sources. One very bullish scenario sees the oil sands eventually delivering as much as 37 percent of our imported crude.

No matter how useful the oil sands might be to our energy supplies, tapping into them remains the most controversial petroleum project on Earth. The local environmental fallout—in terms of deforestation, water demand, and toxic waste—varies among the dozens of ongoing extraction projects but is often immense. And taken as a whole, the oil-sands industry emits so much greenhouse gas that Greenpeace has called it "the biggest global warming crime ever seen."

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In other words, U.S. policymakers are now faced with an awkward problem: How do you balance improvements in energy security with worsening climate change, especially when dealing with a resource that isn't yours? It's a live issue for the administration and Congress. President Obama was forced to address the matter when he visited with his Canadian counterpart in February. Energy Secretary Steven Chu brought it up in a meeting with Alberta premier Ed Stelmach this week. Meanwhile, lawmakers must decide what to do with several laws that could end up restricting oil-sands consumption in the United States. This is an issue that isn't going away soon.

Several months ago I decided to take a careful look at the oil sands (sometimes called "tar sands") to see how the security benefits of extracting oil there might be reconciled with the risks posed to the climate. After interviewing scientists, policymakers, industry insiders, and environmentalists, scouring reams of studies, and doing some of my own calculations, I concluded that both the security upsides and climate downsides of oil-sands exploitation have been overblown. Ramping up oil-sands production would indeed make it easier to live with our addiction to oil, even as we work to break ourselves of it. It would also be worse for the climate than exploiting most other sources of crude. But there's no need to make this a stark choice between the safety of the United States and the salvation of the planet.

In the first place, the most common strategic argument in favor of the oil sands rests on a flawed assumption. Middle Eastern evildoers aren't about to cut off our oil. World oil markets, backed up by Strategic Petroleum Reserves, make it all but impossible for anyone to cut off U.S. oil supplies—if the United States were all of a sudden unable to buy oil from one country, we could contract for it elsewhere (albeit at a higher price).  In that sense, shifting to more Canadian oil would solve a largely nonexistent problem.

Still, expansion of oil-sands production would have some benefits for national security. Greater access to oil tends to push down world crude prices; as a result, adversaries like Iran, Russia, and Venezuela would make less money. If oil prices remained stable in the face of Canadian expansion, it would be because states like Saudi Arabia had compensated by curtailing their production—and shrinking their revenues. The security benefit here is limited and indirect, but it's real.