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Canadian Dirty Oil Is In Political Spotlight

 

The World Energy Congress 2010 is underway in Montreal this week. It was the target on Sunday of a protest by about 400 demonstrators who covered themselves in dark molasses, which was intended to give the appearance of crude oil. The protestors were trying to draw attention to the environmental damage caused by using carbon-rich energy and especially the heavy bitumen extracted from Canada’s oil sands. 
 
Last week, Speaker of the U.S. House of Representatives Nancy Pelosi (D-CA) and her handpicked attacker of conventional oil and gas, Rep. Ed Markey (D-MA), visited Ottawa, Canada. While there, they met with a group of Canadian energy executives along with Alberta Premier Ed Stelmach and Brad Wall, Saskatchewan’s top politician. Pelosi and Markey are leading the Democrat Party’s green energy push, so they see the Canadian oil sands as a target to be attacked for its high carbon content. The meeting with energy executives was described by Canada’s media as a “two-way” exchange of views about the future development of the oil sands and the need to build a proposed new pipeline to bring more bitumen from the oil sands to the U.S. energy market.
 
Another topic explored was oil sands production methods that are shifting from mining to steam-assisted gravity-drainage (SAGD). While SAGD eliminates ugly open-pit mines and toxic tailings ponds, a recent site of dead geese, it has its own problems because it consumes large volumes of water and produces more greenhouse gases than mining. One of the industry attendees said the discussion about the improvements in SAGD performance over the past decade was well received by the U.S. political leaders. The oil industry leaders also pointed out that there were many U.S. energy jobs and investments tied to the Canadian oil and gas industry, arguing that the U.S. should not take actions that would hurt these activities.
 
Mr. Stelmach also commented favorably on the exchange of views in his meeting with Ms. Pelosi. He stated that she acknowledged that the U.S. is looking to end its dependence on foreign oil but that did not include Canadian crude oil and petroleum from the oil sands. The Alberta Premier went on to say, “She didn’t consider Canada to be foreign oil.” 
 
Canadians are right to be confused by U.S. government policies and statements. On the one hand, the government is on a campaign to reduce greenhouse gases, meaning reducing our dependence on petroleum and coal for energy, yet we are restricting drilling on federal leases for domestic energy resources. At the same time the Obama administration touts a goal of reducing our foreign oil dependency, one of its most influential government leaders doesn’t know that Canada is not our 51st state. Or maybe Ms. Pelosi’s comment is actually a statement that the U.S. it is confident it can take for granted Canada’s energy resources. That would be a huge mistake as the Chinese have been investing in Canada’s petroleum industry, including its oil sands properties. If the U.S. is going to count on more Canadian oil in the future, then our federal government and Congress need to get behind increasing the capacity to bring more oil into the U.S. from Canada and that includes more oil sands output.