It was 2011.
In the late-autumn sun, several thousand demonstrators linked arms and formed a human chain around the White House. Others hoisted a giant inflatable black tube over their shoulders.
Protesters had shown up in full force on the White House lawn, pushing back against the Keystone XL project, a planned 1,200-mile extension of the Keystone pipeline that would carry oil sands crude from Alberta’s vast reserves through the U.S. heartland to refineries in Texas. Women and men, young and old, celebrities and farmers, all climate warriors united in fierce opposition. This was the start of a trend—protesting pipelines as a proxy for climate action. The idea was simple: If you could stop oil—particularly oil sands—from getting to market then the transition to a low carbon energy future would be hastened.
Six years later, from Standing Rock to Vancouver, pipeline protests are still happening. Now, in 2017, the way we understand oil as a resource has changed. For example, Cenovus—an oil sands producer—has set the audacious goal of zero-emissions oil. And, more importantly, people in the industry increasingly believe that zero-emissions oil will happen. In this context, pipeline opposition makes little sense from a greenhouse-gas perspective.
So what’s the way forward? The best way to know may be to look backward.
After all, these protests are sights that M. King Hubbert could not have predicted—though, in many ways, he was responsible for the thinking behind them. Hubbert was an American geophysicist who created a method of modelling oil production which came to be known as “Hubbert’s peak,” or perhaps more commonly, peak oil theory.
Back in 1956, long before the link between greenhouse gases and climate change was well established, oil depletion was a major worry. The energy-hungry world had a big concern: What happens if the oil runs out? Hubbert warned that U.S. oil supply would peak in the 1970s at 13 billion barrels per year and then decline until the oil runs out. The theory continues to make sense given the finite nature of oil resources.
But what Hubbert got wrong—very wrong—was the timing. He didn’t account for innovation, and timely technological development unlocked the capacity of unconventional oil; by 2015, U.S. production had surged to 32 billion barrels per year.
Meanwhile, in the 1970s, when the world was concerned about running out of oil, Alberta was dreaming big. The province and the nascent oil sands sector were dreaming up ways to innovate a solution.
The world was aware of the enormous oil sands deposits in northern Alberta. Yet, despite significant public and private investment in the oil sands, most people thought it was impossible to separate the oil from the sands at a price the world would pay.
But the Alberta government and the oil sands sector kept pushing and innovating. Eventually, technological advancement, efficiency gains and higher oil prices turned the oil sands into an economic engine.
The result was historic. Oil sands put Alberta on the global energy map. The province is now ranked among the biggest players, with the third-largest oil reserves in the world behind only Saudi Arabia and Venezuela. Then-Prime Minister Stephen Harper took to calling Canada an energy superpower as new investment and workers flocked to the province.
It was clear that the energy sector’s ability to innovate had pushed peak oil farther into the future. But the sector’s ability to innovate also set the innovators on a collision course with the global environmental movement.
Which takes us to a warm morning in June 1992, the United Nations Conference on Environment and Development (UNCED) convened in Rio de Janeiro, Brazil. This tropical conference was historic for one major reason: The concept of climate change was officially introduced to the world.
Five years earlier, the 1987 Montreal Protocol on chlorofluorocarbons (CFCs) had effectively addressed a different emissions problem. Countries agreed to phase out CFCs to protect the ozone layer. Given these results, one might have been optimistic that the Rio Conference would achieve similar results.
But consumer attachment to greenhouse gases proved much stronger than the attachment to CFCs. Limiting greenhouse gas consumption would mean limiting the consumption of the fossil fuels that were driving economic growth. There was no quick way to stop production without seriously harming global standards of living and quality of life for billions of people.
The Rio Conference was a wake-up call. But it amounted to little more than that.
The 1997 Kyoto Protocol and other attempts to curb emissions could not solve the core problem: how should we divide the global emission reduction pie? Developing countries—led by China—argued that developed nations had created this mess so they should bear the burden of fixing the problem. Developed countries argued that developing nations were the problem—with GHGs increasing at an alarming rate—so they must drive the solution. This impasse, which persisted until 2015, ensured that no realistic plan emerged about how to “get off” fossil fuels.
Failed talks and a lack of cooperative action bred discontent within communities that were concerned about climate change. Many climate activists had long since grown weary of the slow pace of change as fossil-fuel consumption was actually increasing. Time was running out.
Then, in 2006, as global climate leaders worked to set a new, more effective strategy, a strange sight appeared on the National Mall in Washington, D.C. A massive yellow truck, complete with a 15-foot staircase to reach the driver’s seat, was parked behind a slight chainlink fence at the Smithsonian Folklife Festival. It was a shocking sight—half the height of the White House and big enough that a mid-sized car could fit inside the wheel well. The monstrous truck was not left there by mistake; it was a deliberate ploy by the Alberta government to get Washington’s attention.
Former Alberta Premier Ralph Klein was leading a 16-day campaign in D.C. to promote oil sands exports, and the truck was meant to show the scale of the reserves. It was meant to showcase Alberta’s capacity to innovate. And it worked: It gained the attention of Washington, D.C. and many investors. But, it also garnered the attention of global climate leaders. For frustrated environmental leaders—some of whom subscribed to anti-technology and anti-development worldviews—the giant 777 Mining Truck represented an existential threat.
A new directive emerged: Climate action should target the oil sands.
Pipelines weren’t the immediate target in this fight. Instead, oil sands mega-projects and the scale of development in Canada’s boreal forest—huge trucks, mines and tailings ponds were the initial focus, designed to amplify awareness of the scale of Alberta’s “dirty tar sands.”
The campaign successfully back-footed government and industry north of the border, but it did not stop investment. Development not only continued, it expanded.
The battle was on.
In 2009, as the GHG battle heated up, a young Barack Obama took office as the 44th President of the United States. In the early days of the Obama administration, there was enormous hope that the U.S. would lead on climate issues. Democrats controlled the Presidency, the House of Representatives and the Senate; they could impose their agenda. But, since control of both houses was likely to be short-lived, Obama had to make difficult choices about where to spend his political capital.
He chose to focus on health care, not climate leadership. In 2010, the U.S. cap-and-trade bill—known as Waxman-Markey—was laid to rest.
The environmental movement was devastated. It appeared the Obama administration would not pick up the mantle of global climate leadership.
In the aftermath of this loss, with no pending legislation to curtail emissions, the movement grasped onto the Keystone XL pipeline expansion as a proxy for U.S. climate action. If Obama would kill Keystone XL, the thinking went, all would not be lost: If oil sands supply was choked off, then the transition to renewable energy would be expedited.
It was an easy call for Obama. He punted the ball, refusing to approve the pipeline during his time in office. He gained credibility on the environmental file even as oil production in the United States grew by an astonishing 1.6 billion barrels per year, or 4.4 million barrels per day—an increase that took Alberta 70 years to achieve. And, perhaps more astonishingly, while Keystone XL was denied, more than 8,000 miles of new pipelines were built within the United States. Stacked end-to-end, these new pipelines would reach nearly one-third of the way around the earth. Production was so vast that, despite these pipelines, oil began finding its way to market via tankers and trains—even down the Mississippi River on barges.
This should have been a clear signal that, with or without pipelines, production would continue as long as demand existed for such a valuable commodity. It should have been a clear signal that unconventional discoveries continued to push peak oil farther into the future. If the goal was reducing global GHG emissions, then it should have been a clear signal to change tactics.
Nevertheless, pipeline opposition had gained traction and momentum. The movement had successfully leveraged local concerns about pipeline and marine safety, Indigenous rights, local economic benefit, and energy decision-making processes to delay and kill proposed projects. This leverage was used to push Canada to develop ambitious national climate goals while encouraging Alberta to impose stringent climate policies.
So where does this leave us? And what does all this history teach?
If the goal of pipeline opposition was to force Canada to take a leadership role on climate change, then that goal has now been achieved. Canada’s federal government has now forced provinces to price carbon. The Alberta government has put a 100 MT cap on GHG emissions from the oil sands in addition to regular carbon pricing in the province.
If the goal was to reduce global GHG emissions, then continued opposition is now misguided. It once made sense—specifically, when oil sands product was substantially more carbon-intensive than competing crude oils. In 2014, on a well-to-wheel basis, the average oil sands barrel emitted between 6 and 9 per cent more GHGs than the average crude barrel refined (consumed) in the United States. This number has come down in recent production, and newer projects are proving that oil sands can compete on a low-carbon basis. Paraffinic Froth Treatment (PFT), for example, brings oil-sands GHG emissions close to the average crude consumed in the U.S. by using a lower boiling point that requires less heat and steam. PFT also eliminates the need to build upgraders—which, in turn, eliminates substantial GHG emissions. And Canada’s Oil Sands Innovation Alliance (COSIA), Evok Innovations and the Energy Futures Lab are just three examples of where innovation is being applied to environmental challenges in Alberta’s oil and gas sector.
But if oil sands are displaced by other heavy crudes, these are likely to be crudes with similar—if not higher—GHG intensity. And, since Alberta has priced carbon and put in place a cap on emissions from the oil sands, its carbon content is expected to fall over time. It is not clear that production in Venezuela and Mexico will do the same.
As a result, if oil-sands carbon intensity continues to fall, then keeping oil sands in the ground and stopping new pipelines may actually increase global GHG emissions.
The harsh reality is that global demand for oil is widely expected to increase through 2040—even with aggressive adoption of electric vehicles and renewable energy technologies. And since there is no shortage of oil in the world, it won’t disappear on its own any time soon.
If the goal is to reduce global GHGs to keep global temperature increases below 2 degrees C above pre-industrial levels, then the answer is to reduce global demand for oil—not the supply. The pipeline debate has fuelled a fierce competition between the traditional energy sector and environmental groups. The time is right to rethink that approach.
Imagine how far we would get if we all embraced the stubborn innovation of the oil and gas sector and directed it toward solving climate change. Canada and Alberta could, once again, solve big global problems. It is time to put the pipeline battles aside and rethink the role of oil in the transition to a low-carbon economy.
Jordan Flagel is a policy analyst and Trevor McLeod is the director of the Natural Resources Centre at the Canada West Foundation.