Obama's fight against 'dirty oil' could hurt oil sands
Sheldon Alberts, Washington Correspondent, Canwest News Service
Published: Tuesday, June 24, 2008
WASHINGTON -- Barack Obama on Tuesday vowed he would break America's addiction to "dirty, dwindling, and dangerously expensive" oil if he is elected U.S. president -- and one of his first targets might well be Canada's oil sands.
A senior adviser to Mr. Obama's campaign told reporters it's an "open question" whether oil produced from northern Alberta's oilsands fits with the Democratic candidate's plan to shift the U.S. sharply away from consumption of carbon-intensive fossil fuels.
"If it turns out that those technologies don't advance . . . and the only way to produce those resources would be at a significant penalty to climate change, then we don't believe that those resources are going to be part of the long-term, are going to play a growing role in the long-term future," said Jason Grumet, Mr. Obama's senior energy adviser.
The remarks amount to a shot across the bow of Alberta's oil sands industry, which is planning to boost production from 1.3 million barrels a day to 3.5 million barrels over the next decade.
The industry has come under sustained attack from U.S. environmentalists over the past year because the production of its heavy oil emits an estimated three times more greenhouse gases than conventional oil.
Mr. Obama has cast himself as a champion of green energy during his White House campaign, proposing a national low-carbon fuel standard that would reduce greenhouse gas emissions by 180 million metric tons by 2020. He has also promised to invest $150-billion in developing alternative energy, and to reduce American dependence on foreign oil by 35% by 2030.
"The possibilities of renewable energy are limitless," Mr. Obama said in an energy policy speech Tuesday in Las Vegas. "We've heard promises about it in every State of the Union [speech] for the last three decades. But each and every year, we become more, not less, addicted to oil -- a 19th-century fossil fuel that is dirty, dwindling, and dangerously expensive."
In a campaign conference call held Monday in advance of Mr. Obama's speech, the Illinois senator's top advisers were asked what impact his energy plan might have on U.S. imports from Canada's oil sands.
There is "a lot of technological development underway" to reduce the carbon footprint of oil sands production, Mr. Grumet said, but there continues to be "unacceptably high carbon emissions" associated with production of the fuel.
"The amount of energy that you have to use to get that oil out of the ground is such that it actually creates a much greater impact on climate change, as well as using much more energy than even traditional petroleum," he said.
Mr. Obama is committed to supporting energy sources that help slow climate change if elected -- and he will reward industries that meet tough new greenhouse gas standards, Mr. Grumet said.
"It's a meritocracy. We are going to support resources that diversify petroleum supplies, that bring more production to this hemisphere, and that meet our long-term obligations to reduce greenhouse gas emissions," he said. "And I think it's an open question as to whether or not the Canadian resources are going to meet those tests."
Senator John McCain, the Republican presidential candidate, has also vowed to support alternative energy and reduce U.S. dependence on foreign oil. Mr. McCain has placed more emphasis, however, on the need to lower American reliance on oil from the Middle East and countries like Nigeria and Venezuela. "America imports about one-third of its oil from Canada and Mexico and no one need worry about a reliance on friendly, stable neighbours, and partners in NAFTA," Mr. McCain said in a speech Monday in Fresno, Calif.
Christopher Sands, a Canada-U.S. relations expert at the Washington-based Hudson Institute, said Mr. Obama's energy policy could pose as big a challenge to the Canadian economy as his vow to renegotiate the North American Free Trade Agreement.
"What he wants to do, clearly, is to eliminate oil sources like the oil sands. He is very aware of them and the process that's generating them," Mr. Sands said.
"That is a threat to the oilsands and [Canada] has to take this much more seriously."
Canada is the largest supplier of oil and gas to the U.S. and Ottawa has spent several years -- particularly since the 9-11 terrorist attacks -- promoting the country as a safe and secure source of energy for the American market.
But the greater awareness of Canada's importance as a U.S. energy supplier has brought added scrutiny and criticism.
Canada's oil industry was already targeted this week at a convention of big-city U.S. mayors, who singled out Alberta's oilsands in a resolution calling for national guidelines to track the life-cycle impact of different types of fossil fuels.
The mayors' attack drew a sharp response from Alberta Premier Ed Stelmach, who questioned the logic of attacking North American energy sources like the Alberta oilsands when the United States imports a great deal of its oil from much further away.
"How are you going to convince me that the carbon footprint is less by developing the oil in Iraq . . . and shipping it to the coast and refining it there?" he said.
Calgary Mayor Dave Bronconnier also blasted his U.S. counterparts, saying they need to visit Alberta in person to "get the facts on oil-sands production."
"This resolution suggests a lack of understanding," he said, adding the U.S. mayors should focus more on promoting energy efficiency, conservation and the adoption of new "green" technologies.
Some in Canada's energy industry are also alarmed about the potential impact to the oil sands of recent legislation -- championed by Democratic Rep. Henry Waxman -- that bans the U.S. government from buying alternative fuel that generate more emissions than conventional oil.
"I don't think Canadians realize what's at stake in this election is a real fight," Mr. Sands said. In addition to Obama's emphasis on lower-carbon fuels, "you have a Congress champing at the bit to interfere with the glide path we all thought we all thought we are on" with Canadian oil exports to the U.S.
Alberta's oilsands industry this week embarked on a new public relations offensive aimed at highlighting its environmental advances, and has touted a marked reduction in the intensity of greenhouse gas emissions from production over the past decade. Research is also underway to reduce the amount of water used in oil-sands production.
"If it turns out that the technology moves forward and it's possible to develop those resources in ways that are energy efficient and that don't have other attendant unacceptable impacts on water use, land use, etc., then those resources will continue to play a significant and growing role in the global economy," said Mr. Grumet, Mr. Obama's adviser.
