Too ugly to ignore? (Updated) -

Too ugly to ignore? (Updated)

Environment Minister Jim Prentice says the oil sands are hurting Canada’s efforts to be seen as a “clean energy superpower”


Too ugly to ignore

UPDATE (Feb. 1, 2010): Ottawa has sent a shot across the bow of the companies operating in Alberta’s oil sands by saying they must do their part to help Canada shed its dirty image when it comes to greenhouse gas emissions. Speaking before a group of business leaders in Calgary on Monday, Environment Minister Jim Prentice said the rapid development of the oil sands has contributed to a negative international perception of Canada and is at odds with the “clean energy superpower” image that it aspires to project to the world.

Many had expected the government to give the oil sands a break in any climate change program, but Prentice said that operators will be expected work with Ottawa and Alberta to help the country meet revised emissions targets that are part of the Copenhagen climate change accord. Canada’s new emissions targets, announced by Prentice over the weekend, are to reduce greenhouse gas emissions by 17 per cent below 2005 levels. That’s less than the previous target of 20 per cent below 2006 levels, but in line with targets set by the U.S. government. Prentice added, however, that the federal government still supports oil sands development and won’t adopt any specific measures unless the U.S. does first.


If Canadians learned anything from the bickering at the Copenhagen climate change summit, it’s that our outsized appetite for energy and the ugly image of the Alberta oil sands—sprawling open-pit mines, belching smokestacks, murky tailings ponds—has bestowed upon us the unfamiliar role of environmental villain. And, justified or not, the scrutiny is only going to get worse in a year when Canada will host G8 and G20 summits and the Olympics.

The federal government has so far dismissed the characterization as the work of a few fringe environmental groups, but make no mistake: the oil sands are fast becoming a political problem for Prime Minister Stephen Harper, and one that can’t be ignored indefinitely. “I think Canada is going to have to do something about the oil sands, not just because of the international pressure, but because the unconstrained growth will make it so difficult for us to reach the targets we’ve set for ourselves,” said a member of Ottawa’s climate change panel and Copenhagen conference attendee, who spoke on the condition of anonymity. (He was referring to the government’s stated target of reducing emissions by 20 per cent from 2006 levels by 2020, not previous Kyoto targets.)

Ottawa’s official strategy, and one that the industry supports, is to wait for Washington to figure out its own climate change legislation and then follow suit. But there’s no telling how long that could take. And while there’s a sound economic argument to be made for a coordinated approach—Canada is the largest exporter of oil to the U.S.—there may be a political price for a minority government. “The government is in a bind,” says Dale Marshall, a climate change analyst for the David Suzuki Foundation. “It probably wants to give a break to the oil sands, but it’s difficult politically to do so. And that’s because a Conservative majority doesn’t go through Alberta, it goes through Quebec and Ontario.” Indeed, a war of words has already broken out as Ontario and Quebec criticized Ottawa for taking a weak stance at Copenhagen while Alberta spent $120,000 to defend its environmental record in national newspaper ads. Going after the oil sands would require some deft manoeuvring—any crackdown risks causing serious harm to the Canadian economy and could open deep regional rifts.

So just how far might the government go to send a message? Much of the current discussion now centres on how big a break oil sands producers might get, mainly because proponents argue similar “trade-exposed” industries, like coal-fired electricity in the U.S., are likely to be let off the hook. But it’s looking increasingly likely that the oil sands industry will be asked to step up and contribute to any new climate change policy. That would likely come in the form of a national carbon tax or a cap and trade scheme, say observers. Both tools could be used to penalize oil sands firms that haven’t moved quickly enough to curb fast-growing emissions (the government estimates oil sands emissions will triple between 2006 and 2020). But even more direct taxes or regulations aimed squarely at the oil sands and firms that don’t hit emissions targets could still emerge as a viable option. Or the government could simply reach back to its 2007 “Turning the Corner” plan that advocated measures to limit the “intensity” of emissions in a given sector by requiring reductions on a per barrel of oil basis.

Marshall says the simplest approach would be to hash out our own climate legislation that’s based on the cap and trade system now before the U.S. Senate. A cap and trade scheme could zero in on the oil sands specifically by putting a higher dollar value per tonne on their carbon emissions, forcing the industry to pay a steeper price than others for emissions credits. Likewise, a carbon tax could penalize particularly dirty industries with a higher levy.

The industry, for its part, seems confident that the economic importance of the oil sands means that the current government is unlikely to make any rash moves. “The oil sands gets far more attention than it deserves in this discussion,” says David Collyer, the president of the Canadian Association of Petroleum Producers, noting that the oil sands produces just five per cent of Canada’s emissions and one-tenth of one per cent of global emissions. Others warn that a policy that singles out the oil sands would make little sense. “You could close down the oil sands tomorrow but the impact on overall emissions would be minimal,” says Jack Mintz, a professor of public policy at the University of Calgary. Picking on one industry doesn’t solve the problem, he adds. In fact, it would only fuel regional anger. “If you want to get Alberta separatism stoked, that would be the best way to do it.”

It’s true that the oil sands aren’t responsible for the country’s high per capita emissions—cars and trucks do far more damage in Canada, and coal-fired power plants are the biggest industrial emitter—but environmental groups are quick to point out that Fort McMurray is the epicentre of the fastest growing source of emissions in the country, with production expected to nearly quadruple by 2020 to four million barrels per day. This is a distinctly Canadian problem, they say, and there are ways to mitigate the regional divisions that dealing with it might arouse. Marlo Raynolds, executive director of the Pembina Institute, says Ottawa could still implement a polluter pays policy, aimed at a region or industry, so long as in return it does things like reduce income tax or pump revenue into technology funds.

One element all agree on is that if the oil sands are targeted, the revenue needs to stay in Alberta. “You can hit the production side as long as the money is used in some way to address the problem,” says Roger Gibbins, president and CEO of the Canada West Foundation. That’s the approach that Alberta has taken with its climate program, which sets emissions levels and then penalizes companies who exceed them. The money is then funnelled into a technology fund to explore things like carbon capture. But critics say the penalties need to be much higher to have a meaningful impact on companies that by all appearances have been dragging their feet on the climate front. None of the big producers in Fort McMurray have committed to using carbon capture systems, apparently because of the cost and an overall lack of necessary infrastructure, such as pipelines.

Most observers say that any kind of crackdown on the oil sands will ultimately need to be part of a broader plan. There’s “an expectation that a fair set of policies would target consumption as much as production,” says Gibbins. That’s why a carbon tax is often touted as an ideal policy tool. It could zero in on oil sands companies, but would also force everyone from motorists to other big industries to share the pain.

The industry claims it is not fundamentally opposed to cap and trade or carbon taxes (with the caveat that revenues are used to develop cleaner technologies). One oil sands industry executive, speaking on the condition of anonymity, suggested Ottawa could also choose to target the oil sands by stiffening environmental regulations and requiring that all new projects invest in carbon capture and storage technologies. One of the biggest complaints of many in the oil sands industry is simply the lack of a clear climate change plan from the government. Planning multi-decade, multi-billion-dollar projects without a clear sense of what the government has in mind has been a major challenge. “The general sentiment in the industry is optimistic in terms of global demand for what they’re doing,” says Gibbins. But they are hamstrung without “some relatively robust concrete framework” on climate change policy.

For the time being, however, the Copenhagen summit, for all the negative attention it heaped on the oil sands, isn’t necessarily being viewed as a negative by the industry. While the petroleum producers’ association maintains that the government’s stated emissions target—a 20 per cent reduction from 2006 levels by 2020—is “very ambitious,” it also says the industry is pleased that the Copenhagen agreement basically allows countries to set their own targets and that it reinforced the role of technological solutions. And the best news yet for the industry: the much tougher targets of the earlier Kyoto agreement have been all but cast aside in favour of more realistic—environmentalists say less effective—goals.


Too ugly to ignore? (Updated)

  1. None of this technology fund nonsense. Government should not be picking winners, and that includes picking winning technologies. A national carbon tax, with the revenues funneled into income and investment tax reductions. Far from hurting Alberta unduly, this would require the rest of the country to face a higher carbon price than they otherwise would in order for Canada to meet the same degree of emissions reductions. Of course, now that we facing huge deficits as far as the eye can see, perhaps we shouldn’t fully reduce income and investment taxes to offset carbon tax revenue.

    • One of the political, and economic, drawbacks of the Dion Green Shift plan was that it didn't plan on allocating every penny collected from the carbon tax into income and corporate tax reductions. Instead, the Liberals wanted to reinvest some of the funds into new program spending, some tax credits, and environmental initiatives. While the merits of investing into those three areas can be debated in any case, it would be inaccurate to say that such spending plans would constitute a "revenue-neutral" plan, which the Dion Grits borrowed from Campbell's more effective carbon tax .

      I'm not against the idea of a carbon tax that each province would adopt in concert with BC's approach (ie follow the same pricing schedule), which would put every province on the same page and keep regional politics and wealth-redistribution out of the equation.

      • That sounds fair, but is equivalent to Alberta stealing per-capita carbon emissions allowance if all of Canada has to work toward an aggregated emissions level. So, either we have a national carbon tax with offsetting tax reductions, pooling responsibility to reduce emissions, or we have provincial plans for equal per capita emissions targets, which would be achieved through varying carbon prices. What you’re asking is for Alberta to have its oil sands cake and ask the rest of the country to sacrifice for its exploitation.

        • Except that Canada working towards an aggregated emissions level is an artifical construct that no one cares about at the end of the day. All our trading partners are going to care about is that the price of carbon in the jurisidiction they are trading with is priced similarly to carbon in their jurisdiction and environmentalists will want carbon priced so that market forces start restraining their growth and ultimately reducing them.

          So, why should Alberta have to have a higher carbon tax than Ontario if it wants to keep their carbon tax revenue for tax cuts at the provincial level? There's no economic, environmental, or trade justification for it that I can think of. I'd argue that the only person trying to steal anything here is you in the form of federal income tax cuts funded largely by carbon tax revenue raised in the oil patch. I can't blame you because it would be a good deal for me as well but I don't live out West.

          • So no one cares about Canada’s total carbon emissions? I’m sure our international partners will be very sympathetic when we fall far short of our target reductions, even if we have a similar carbon price.

            And you’re spinning a carbon tax as a huge tax grab on the Alberta oil patch. I thought Alberta’s oil patch was a negligible source of carbon emissions? You guys can’t have it both ways. I suppose we should also kick Alberta out of our currency union, as they are causing Dutch Disease in the rest of the country. The least Alberta could do is start savings its oil royalties like Norway does, rather than spending them in an orgy of waste today. Then Alberta would have a durable advantage. Once the bloom comes off the oil rose, Alberta won’t have much to show for the incredible wealth it was endowed with.

            I would support an approach to carbon pricing that involved states agreeing to a given carbon tax applied equally throughout the world. But that is not the international construct we find ourselves with. I don’t think the EU or the US will be terribly sympathetic if we miss our targets by a mile. We’ve gotten away with being profligate, and they will likely expect us to sacrifice more for it now.

          • "I would support an approach to carbon pricing that involved states agreeing to a given carbon tax applied equally throughout the world. But that is not the international construct we find ourselves with."

            You're right. There's actually no international construct and at the end of the day the price of carbon is the only thing that matters in terms of environmental impact (the tax cuts are just good economics). Why should the price of carbon be higher in Alberta than Ontario. Does a ton of CO2 released in Alberta cause more global warming than a ton released in Ontario? Of course not. So why should they be charged differently? There is zero environmental justification for it and you know it.

          • A bit of a confusing discussion here, to be honest. A flat carbon tax, where a tonne of carbon is taxed the same regardless of location would both provide relatively equal incentives to reduce and wouldn't give Albertans any sort of a break. Yes, they have higher per capita emissions, but if those emissions are economically warranted to the point that making a cut in Ontario is cheaper than making a cut there, then that's exactly what a carbon tax is supposed to do. But Albertans, producing so much more CO2 pollution, would still have to pay the tax on all those emissions.

            sbt's right, aggregate emissions are what matter environmentally, not per capita emissions. If Alberta has a greater need to pollute for its economic well-being than Ontario, then the reaction to a carbon tax should reflect that, as cuts in emissions in Ontario would be more economically viable.

            Trying to achieve uniform per capita emissions region to region through differing emission taxation rates defeats the main economic reason to implement a carbon tax over other measures – that is, letting market forces determine where it is most efficient to make cuts.

          • I think the disagreement is over who gets to collect the revenue from the carbon tax, the federal government or the provincial government. Provinces with higher per-capita emissions have a strong incentive to insist that the carbon tax is a provincial revenue stream since they can then give it back to their taxpayers through provincial income tax cuts which would be larger than if the revenue was collected by the federal government and given back as federal income tax cut (or the provinces would have more money to spend if they chose such a route). It could lead to a very ugly fight.

          • Canada has negotiated a certain aggregate total emissions level with the rest of the world. That ’emission room’ is a resource like any other.

            When Alberta takes more than its per capita share, while keeping the revenues within the province, then the rest of the country is left with less than their per capita share for a given carbon price, so the rest of the country is forced to make even larger emissions reductions that Canada agreed to internationally. This is an equity argument. If Albertans get to buy the right to emit carbon from their provincial government (a carbon tax), why should that provincial government get a bigger share than other provinces? It would be fair to have a uniform carbon price if there were some compensation to the rest of the country for this effect.

            What you are calling for is for Alberta emissions to continue to grow, with other parts of the country having to make bigger than average emissions reductions and without being compensated for the extra burden they face due to the misfortune of being located in the same country as the oil sands. Either Alberta shares the carbon tax revenues and Canada’s pool of carbon emission resource, or it keeps its revenues, but only gets its per-capita share of emissions room. Of course it is not an environmental argument, total emissions are the same either way. It is an economic equity argument. Alberta is asking to get something for nothing: a chunk of Canada-ex-Alberta’s emissions room.

          • We haven’t agreed to a carbon price, but we have agreed to an emissions level target. Are you saying that we have not?

    • Here here.

      Cut the subsidies to oil and coal companies, straight carbon tax – fix the deficit problem and reduce carbon emissions in one stroke. No tech funds, no governmental picking of strategies, just set the rules of the game (i.e. no free polluting) and let the market figure it out. Cuts out the true waste from the system, where carbon emissions are being creating with minimal (or no) benefit to the economy or society – if that means the oil sands continue with vigor, great.

      If anything is funded by the extra revenue from the carbon tax (aside from the nations creditors, of course) to reduce our carbon footprint, it should be transportation infrastructure, incentives for industrial R&D, or academic research. Of course, we need more of all three (the last two especially) regardless of any climate change considerations…

  2. "lack of a clear climate change plan from the government"

    Isn't this the point. The government has started to wake up to the idea that this climate change bull crap isn't real! Its a tool used by socialists to gain access to money and power at the expense of the 'evil' big energy companies. This whole global warming thing is ridiculous.
    Now if someone would stand up and point out environmental problems with oil sands like water, ground, air pollution (carbon is not officially pollution yet) and its negative effects, then I would listen. I am also quite sure that the oil companies would invest to comply with any recommendation based on sound environmental impact studies on the area.

    Carbon Credits = excuse to tax more!

    Its time that environmentalists sit down and re-hash another strategy. Climate change has blown up in your face but there are still ongong international environmental challenges out there that are not being addressed. Who is speaking up for our oceans. Where has all the fish gone. Is Tuna the next caviar?

    There was a documentary done on sharks recently and how they are being fished to oblivion. What's been done. Where is the endless press on these issues. Maybe because the carbon Czars can't find any way to gain money and power from these very real issues?

    • Stupid me – listening to all these climate change scientists when I should have been listening to an anonymous poster on a blog comment feed. What was I thinking?

      • Yep, stupid you. Even if you accept the foolish assertion that anthropogenic CO2 causes global warming, the consequences of unchecked CO2 emissions are insignificant compared to a lot of other very real environmental problems. Overfishing is probably the biggest one, but the pollution of our water sources by pharmaceutical residue and other chemicals is a huge threat to human health as well.

        • There's a lot of very real environmental challenges. Climate change isn't the most immediate, but it is, by far, the most urgent.

  3. Too Ugly to Ignore,the title say's it all doesn't it,again we hear how the Alberta oil sand looks bad,ingoring what it means to Canada as a whole. We have the liberal left in Ont,Que and in Canada's liberal media point the finger west when the discussion turns to so called climate change while stating what we already know, oil sands produces just five per cent of Canada's emissions and one-tenth of one per cent of global emissions,the writer points out that the oil sands aren't the problem by this very statment.Even if all this climate change BS was fact which any thinking Canadian can see its not,oil sands production has very little impact one way or the other.Fact is Ont and Que with all its people and cars and coal fire electricity generation are a far bigger problem.The writer talks of regional rifts,it appears to this average Joe that it just might take Alberta leaving what is now Canada before the chattering classes of this country wake up to just what Alberta and its oil sands provide to Canada.I wonder if we would see the same type of reaction we saw when Que held a vote to leave if Alberta did the same,since Que only takes and Alberta only gives.

  4. The title raised an interesting perspective that is not really raised in the article. The oil sands are photogenic in the worst possible way. The internet is already full of images of the sort that filled the National Geographic spread. Those images (like the cute little baby seals with the big eyes) inspire a strongly negative emotional reaction. This emotional reaction will not go away with the introduction of technical fixes. Alberta recognized this early on and responded with an attempted PR campaign but given that at that point they had absolutely no interest in seriously addressing the technical side of the equation that PR likely did more harm than good.

    • Ever see the huge piles of sliced and diced birds at the base of any wind farms.

      Of course not. They are horrific and would make a few oil covered ducks look like they're in a spa by comparison.

      But our agenda media would never, ever dare show such pictures.

      • Can you link to some photos provided by the farmers on whose land the turbines whirl? I imagine someone must have photographed these horrifically mangled birds.

        I wonder if turbines really kill any more birds than our houses, condo towers, office towers. Lots of dead birds on Bay Street have to be cleaned up every day of the week. Maybe we should all live underground in caves.

  5. While the left leaning media continues attacking its favourite capitalistic target, "big oil"

    nary a peep about two major stories, one Canadian home grown. Each big enough to be climategate 2 and 3 respectively.

    1) The hymalayan "glacier melt", a "settled fact" accepted around the world, came from….a speculative thought over a telephone conversation. Remarkable what amounts to "science" when that "science" is telling an incestuous, corrupt institution what it desperately wants to hear. And..

    2) the dissappearing temperature stations in Canada.

    • BIFF! You're not allowed to tell people the truth!

  6. On the first point, here is the link to the Telegraph story, which of course didn't make any other coverage…wouldn't want to actually report startling news or anything:

    The media's shameless complicity in overhyping thin, exaggerated claims, while willfully surpressing contra stories that cry out for coverage, shows the depth of the problem with our leftist, groupthinking, agenda driven media.

  7. Sheesh! Maude Barlow was right. The place does indeed look like Tolkien's Mordor.

  8. Isn't it time that the media stopped turning to such organisations as The Pembina Institute and the David Suzuki Foundation as "authorities". These groups have a big problem. Climategate has (finally) exposed the fraud and corruption in academia and NGOs that have subscribed to that fraud should now admit "we cannot be sure about global warming" and focus on the very real issues of pollution such as the amount of raw sewage pumped into the St. Lawrence River or, if they want a global (and possibly more "exciting" project, look at cleaning up the oceans.

  9. The opinion of the global community is simply irrelevant. Its impact on trade relations with Canada, or any other tangible facet of Canadian life is negligible. Think about it. What political price does China pay for far worse environmental sins, or for running a brutal and oppressive dictatorship? What about Saudi Arabia? We have a resource that the world needs (this is why the oil sands are fundamentally different from the seal hunt). If people have a problem with it, they should stop consuming oil. Indeed, the notion that people do or will care is ludicrous. One of the advantages of being a middle power is that nobody does a fact-check on your rhetoric.

    I do think we need a strategy to tackle climate change. However, it must be one that does not put Canadian exports at a competitive disadvantage vis-a-vis the United States, China and India. Climate change is a long-term phenomena. It is worth taking the time necessary to get a politically and economically sustainable strategy in place.

    • How do you explain the success of environmental groups in Europe in changing the clearcut logging practices in BC by targeting the lumber companies customers? Lumber is, afterall, simply a commodity.

  10. When will Macleans shoulder its responsibility as a serious publication to embed in every enviromental harangue a reminder that there never has been any evidence that man-made climate change is real, and that the theory has been proven to have been based on scientific fraud on an epic scale? It is perplexing that Canadians, if their newspapers and magazines accurately reflect their beliefs, carry on believing this discredited theory to be true.

    • No such thing has been proven.

      • Yes it has, idiot.

        • No. It hasn't.

      • Yes it has. Galileo proved the that sun did not revolve around the earth too, in case you hadn't heard.

        • No, it hasn't.

          And Galileo put forth a theory, that, like AGW, had people with vested interests disputing it. Eventually, however, science came to accept that Galileo's version made more sense, and (although it needed some tweaking for elliptical orbits and the like) was more useful predictively than what came before it — which, incidentally, is exactly where AGW stands.

  11. Nuke Toronto and that will reduce emissions.

      • Wow. I've seen aerial perspectives of Brampton and Scarborough that were not pretty, however.

    • You’re an idiot.

      • I disagree.

        • Only an idiot would.

    • Why Toronto?

      • A better question is why would anyone suggest the mass slaughter of millions of people. If it's a joke, I'm not laughing.

  12. Classical example of Ontarians and Quebecors crying for more equalization payments while shooting left right and centre, at the goose that's still laying a few eggs. Humbug!

    • Alberta can keep their tax revenues, but then they have to tax at a high enough rate to hit their per-capita share of Canada's emissions target.

      • Good idea

        But dont foget Nanticoke (emits more than Oil sands) and all the drivers in this country which Ontario and Quebec have in abundance. Be carefull what you ask for buddy

        • Nanticoke is in the process of being shut down. I doubt your claim that Nanticoke emits as much as the oil sands, given the oil sands account for 5% of Canada's total. No doubt it is a significant source, however.

          Anyway, bring it on. I don't begrudge Alberta its desire to exploit its oil resources. I begrudge the fact that they want to make the rest of the country atone for their environmental sins.

  13. Interesting editorial shift – to actually deal with the tar sands and their development in a realistic manner. It seems to parallel a similar shift by industry which seems have been evolving in the last 6-8 months to 'creating a conversation' about the tar sands rather the previous strategy of stoking the embers of Western alienation, encouraging screaming matches between enviros and motor heads, maneuvering the two main federal political parties (both the Liberals and the Conservatives) into their corner and giving embedded media tours for Canadian journalists to breathlessly gee-whiz about the size of the trucks in the tar sands. It's too bad that this shift seems to be driven primarily by forces (dirty fuel legislation in California and similar initiatives in other states, Copenhagen, and eNGO activism in the US and Europe) outside of Canada, that we as Canadians couldn't show enough leadership to get there ourselves. It's encouraging that at least some elements within the industry seem to recognize they're in real trouble and might even, out of necessity, begin to demonstrate some leadership. How long will it be before our political parties do the same?

    In keeping with the title of the article another perspective that plays on ugly or beautiful:

  14. That's a very sad image considering we are now in a climate change.