Of Pipelines, Tar Sands and Climate Change

Publié le jeudi 10 mars 2016

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One of the issues that has been raised on the fraught question of whether we should build more pipelines to transport Alberta oil to places where it can be refined and/or exported is climate change. As important as climate change may be, there are many other complex factors that also need to be considered.

Let us nevertheless start with climate change. From this perspective one response might be: if we build a new pipeline we will want to utilize it to its full potential and in the context of Alberta this will inevitably lead to greater exploitation of the tar sands. As was argued in a recent Globe and Mail article, a new pipeline will inevitably lead to more production. This will bring in more revenue for the government even if the price of a barrel of oil does not increase – an understandably powerful argument.

However, unless we are able to reduce the amount of greenhouse gases associated with a barrel of oil from tar sands production, our national greenhouse gas emissions are, according to the National Energy Board, predicted to increase and will make it more difficult to meet our emission reduction targets. This will be true even if we reduce the up-stream emissions to the extent that the product is equivalent to that produced elsewhere.

There is another consideration imposed by climate change. The amount of warming depends on the cumulative emissions of greenhouse gases; that is the sum total of all the emissions since the beginning of the industrial revolution. Thus if we choose to keep the temperature increase below 2oC we have a budget for the amount of greenhouse gases we can emit. The problem is that we have already emitted much of that budget and at current business as usual rates we will exhaust the remainder in the next decade or so.

The stark implication of this is that we cannot burn all of today’s known reserves of fossil fuels and stay within the 2oC limit. We will have to leave most of it in the ground. If we now bring in a price of carbon emissions there will be economic arguments to use the cleanest fuels first leaving some of the tar sands deposits as potential stranded assets. These stranded assets would include any pipeline intended to bring the tar sands to market.

The environmentalists may seek support from the above climate change arguments but their concerns are somewhat simpler and are shared by local governments and indigenous peoples. These groups are concerned about the environmental degradation and health impacts caused by the extraction of the tar sands exemplified by the huge settling ponds which can be seen from space; they are concerned about the likely probability that there will be a pipeline leak threatening land and water resources; and they are concerned that the tar sands are simply a dirty energy source and would prefer to see more renewable energy sources such as wind and solar.

These concerns are now being taken up in strengthened environmental reviews to which has now been added a “climate test” by, for example, the National Energy Board. These reviews will significantly help build the social licence needed to move ahead with any new pipeline. Ultimately, there will have to be a risk assessment that should take into account all these factors and in the context of the extensive pipeline networks that already criss-cross the country.

While the scientific arguments cannot be ignored it is more the political concerns that will eventually dominate any decisions taken by governments. This includes not only public opinion discussed above but also matters of economics and employment. Alberta has seen a dramatic decrease in its oil and gas revenues and employment as a result of the drop in the price of a barrel of oil. Without a pipeline to transport the tar sands oil much of the resource is essentially locked-in and suffers from a significant discount. It is understandable that Alberta would like to see a new pipeline built.

Furthermore, although we may be seeing the beginning of the end of the fossil fuel era, we will nevertheless continue to extract oil from the tar sands, albeit at a reduced rate, for there are physical limits to the rate at which we can engineer a transformation to a sustainable energy economy. With reduced revenues and employment from the oil industry Alberta will need assistance (federal transfers and job training) to successfully manage a transition to an economy that is not based so heavily on fossil fuel extraction.

Does such federal assistance also include facilitating the building of a new pipeline? According to the statements of our Prime Minster and others the answer is probably “Yes”. However, this does not necessarily mean it would be built for it is certain to come up against strong opposition from local governments who believe the benefits to them are incommensurate with the risks involved and from First Nations who argue that, because of their traditional claims, have what amounts to a veto power over any development on their lands. This recalls the aphorism that it takes several reasons for a “yes” but only one for a “no”.

- John Stone

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