Choking the oil sands - Macleans.ca

Choking the oil sands

Environmentalists are opening a new front in their war on Alberta oil—attacking pipeline projects vital to the industry’s future

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Choking the oil sands

Jiri Rezac/WWF/Polaris

Over the next few weeks, as many as 2,000 climate change protesters are expected to descend on Washington in an effort to draw more Americans into the debate over Alberta’s oil sands—one of the most carbon-intensive sources of fossil fuel on the planet. But this time, anti-oil sands groups aren’t focusing on the vast open pit mines near Fort McMurray, which one activist memorably compared to J. R. R. Tolkien’s fire-spewing and charcoal-covered realm of Mordor, but on a major pipeline project that the industry needs to move forward with its expansion plans.

Supported by such high-profile environmentalists and left-leaning luminaries as David Suzuki and Naomi Klein, the protesters, who will risk arrest during their White House sit-in, hope to stop President Barack Obama’s administration from approving the proposed 2,673-km Keystone XL pipeline that is being built by TransCanada Corp. and would move crude oil from northern Alberta to refineries in the Gulf of Mexico. Meanwhile, north of the border, anti-pipeline rallies are scheduled to take place over the next few months in Vancouver and Ottawa. In addition to the Keystone XL project, the Canadian rallies will also focus on a proposed 1,170-km pipeline, built by Enbridge Inc., that would connect northern Alberta to an oil-shipping terminal in Kitimat, B.C., running through an area that opponents claim is pristine wilderness and the habitat of a sacred species of bear.

It all amounts to a new front in the war environmentalists are waging against the oil sands. “I really think this should be seen as part of a global campaign that’s been gaining steam against the tar sands, which has used various pressure points,” Klein told Maclean’s. “Some are demonstrations, others are consumer-based strategies to put pressure on companies not to use oil from the tar sands, while others have employed shareholder activism against companies like Shell and BP. This is just another piece of the puzzle.”

While pipelines carrying potentially dangerous liquids are nothing new in North America (there’s already enough pipeline in Canada alone to wrap around the globe 2½ times), anti-oil sands groups have found a receptive audience in local communities along proposed pipeline routes. (Although it’s questionable whether farmers in the American Midwest and First Nations in B.C.’s Interior are as worried about planetary catastrophe as they are about a potential leak in their backyard.)

The industry, meanwhile, is critical of the activists’ strategy. Oil sands proponents point out that, pipelines or not, as long as the world has an unquenchable thirst for cheap energy, Alberta’s vast reserves will continue to be extracted from the sandy soil, whether through open pit mines or in situ technologies, and sent to refineries for processing. And it’s not as if moving three million barrels of crude every day on diesel-swilling trucks or trains is much better for the environment.

Even so, it’s becoming increasingly apparent that the challenge of tapping the world’s second-largest reserves is no longer limited to the enormous costs associated with getting the oil out of the ground. It now also includes the long, drawn-out, and increasingly politically charged process of trying to deliver it to paying customers.

Opposition to TransCanada’s Keystone XL has been heating up in the U.S. all summer. The planned 36-inch pipeline would stretch from Hardisty, Alta., to refineries around Port Arthur, Texas. It’s an expansion of TransCanada’s existing Keystone pipeline that terminates in Illinois, and would more than triple the existing pipeline’s capacity to 1.3 million barrels per day.

While environmentalists have posed a variety of concerns about the pipeline’s safety along the route, the Keystone XL has emerged as a national environmental cause due to concerns over the greenhouse gas emissions produced in Alberta—and more generally as a symbol of entrenching America’s dependence on fossil fuels. “It just makes it easier to prolong that addiction if we come up with a new dealer—and that is what Canada is,” says Bill McKibben, a leading U.S. environmentalist who organized the Washington rally. He explains the oil sands to Americans as “the world’s second-largest pool of carbon on Earth after Saudi Arabia,” and accuses Canada of losing its integrity by heavily promoting the projects in the U.S. “Being a junkie is not a very dignified position, and being a dealer is not a very honourable position either,” he says.

The activists, with their White House protest, want to spotlight the fact that the Obama administration has the exclusive power to approve or deny a permit for the pipeline. “The administration has used Congress as an excuse to not get much done on energy and climate. But this is a unique chance for President Obama to say ‘yes’ or ‘no’ on a fossil fuel project that we think would take the country in the wrong direction,” said Jamie Henn, a spokesperson for the organizers.

Keystone XL is heading down the final stretch of what has been an unprecedentedly long approval process by the U.S. government, having received intense scrutiny from the Environmental Protection Agency, which has twice criticized draft impact statements prepared by the U.S. State Department. State, which says it has been working closely with the EPA to answer concerns, has been conducting an environmental impact review that is expected to conclude this month. Then it will determine whether the pipeline is in the “national interest.” That process will include a series of public meetings this September in all of the states along the pipeline route, as well as in Washington.

In all of those places, anti-oil sands activists will find plenty of useful allies who oppose the pipeline out of safety fears and the potential for local environmental damage. Critics have pointed to a spate of recent pipeline spills in the U.S., including in May when the first phase of the Keystone system spilled 79,500 litres of crude in North Dakota, and in July, when an ExxonMobil pipeline ruptured, spilling some 3,800 litres of crude oil into the Yellowstone River.

Opposition is particularly strong in Nebraska, where opponents are concerned that the pipeline will cross an aquifer that provides a large portion of the state’s drinking water and agricultural irrigation. “We think it’s ridiculous people even think that the pipeline could go through the aquifer and it would be okay,” says Jane Kleeb, president of Bold Nebraska, an activist group that is fighting the pipeline. Her group is considering launching a push for a ballot initiative to ban pipelines from sensitive areas if Keystone XL is approved. Earlier this month, the group surrounded the governor’s mansion with flashlights to “spotlight” his complacency in the face of the threat.

Meanwhile, on Capitol Hill, supporters of the pipeline complain that the process has been taking too long, and that increasing imports from Canada at a time of upheaval in the Middle East is a “no-brainer” that will enhance America’s energy security. Among the supporters of the pipeline are the oil industry and leading business groups of both countries. In addition, five labour unions wrote to Secretary of State Hillary Clinton in support of the project, claiming that it would spur the creation of 118,000 jobs and generate more than US$585 million in state and local taxes for the states along the pipeline route. At a congressional hearing in May, Stephen Kelly, assistant general president of the United Association of Plumbers and Pipefitters, told lawmakers, “This project would provide a tremendous and needed boost to the U.S. construction industry, generating thousands of high-quality jobs at a time when the industry is wrestling with nearly 20 per cent unemployment.”

The local battle over the pipeline has become in part a PR battle over the image of the oil sands in America. Liz Barratt-Brown, a senior attorney for the National Resources Defense Council, says the debate over this single project has introduced the existence of the oil sands to many Americans. “A few years ago, very few people in America knew much about the tar sands,” she says. “Keystone XL has galvanized the concern about the impact of tar sands oil on our clean energy future.”

The permit process has also resulted in American pressure on the Canadian and Alberta governments to do more to regulate the oil sands. “I think [the provincial and federal governments] are in a process of trying to figure out how much they need to do,” says Barratt-Brown. “The customer is always right, right? If your customer says we have issues with how you are mining this oil, then Alberta has to answer for that.”

The deadline for a decision is Dec. 30. But environmentalists say even if they’re unsuccessful in preventing a permit from being issued, the battle will not be over. Barratt-Brown says that if necessary her group will join with others in challenging it in U.S. courts. “There will certainly be litigation—a lot more litigation,” she says. “I don’t expect this to be concluded for a long period of time.”

The high-profile debate over the cross-border Keystone XL project has also made life difficult for Canada’s Enbridge and its proposed Northern Gateway project. In the planning stages for over a decade, the $5.5-billion twin pipeline would pump oil from the town of Bruderheim, Alta., near Edmonton, to a shipping terminal in Kitimat, B.C. (condensate used to thin the oil would be pumped in the opposite direction). From there, it would be loaded on giant tankers that would then navigate some 290 km of inland waterways until they reach the rugged B.C. coast, where many would continue on to China. The rationale for the Northern Gateway project is to open up a new market in Asia for oil sands crude, which could become critical if rising American opposition to oil sands crude actually puts a dent in demand.

Of course, that assumes mounting opposition to the Northern Gateway can also be overcome. The project has already encountered stiff resistance from local communities, fishermen, and more than 80 First Nations. But Paul Stanway, a spokesperson for Enbridge Northern Gateway, says that what makes the opposition to this particular project different from other pipelines built by Enbridge is the involvement of high-profile environmental organizations hoping to stunt oil sands development. “I’ve heard it referred to as the octopus theory: you cut off the tentacles and the octopus dies,” he says.

As a result, Enbridge has found itself waging a battle that is as much about emotion as it is about regulatory approvals and community engagement. The Northern Gateway was recently featured in an issue of National Geographic, which two years ago created a “baby seal moment” for the oil sands by publishing a 20-page spread, complete with glossy pictures of vast open-pit mines, murky tailings ponds and discoloured fish. The more recent article was titled “Pipeline through paradise” and focused heavily on the region’s pristine beauty, including the Kermode, or “spirit bears” (black bears that are coloured white), that roam the soggy temperate rainforest. It also highlighted a B.C. ferry that sank in the area in 2006, and which continues to seep fuel 1,400 feet below the surface, leaving the impression that the Northern Gateway is an environmental catastrophe waiting to happen.

Stanway wasn’t thrilled. “What a B.C. government ferry accident has to do with us running tankers in and out of Kitimat, I have no idea,” he says, adding that the article ignored key information. He touts the pipeline industry’s safety record, which boasts that 99.99 per cent of the liquids transported in pipes make it to their destination safely. Stanway also noted numerous precautions being taken with the terminal side of the operation, including a requirement that all tankers calling at the port have a double-walled hull, the installation of a navigation system along B.C.’s north coast, where none currently exists, and plans to use B.C. pilots to navigate the tankers through the tight inland waterways.

He also questions whether anti-oil sands groups are acting in the best interest of communities along the proposed route. “These are outside groups that are bringing in outside resources and a lot of money to campaign against the building of the pipelines,” Stanway says. “Now, they’re perfectly entitled to do that, but they need to be upfront about their agenda and where their funding comes from.” Enbridge estimates that the pipeline would contribute about $270 billion to Canada’s GDP over the next three decades, as well as create some 1,150 long-term jobs. And, despite the widely publicized opposition of several First Nations, Stanway says Enbridge has signed memorandums of understanding regarding an equity stake in the project with about 30 affected First Nations.

It’s not clear what will happen if the remaining First Nations groups dig in their heels. “A lot depends on the willpower of the parties involved,” says Gordon Christie, an associate law professor at the University of British Columbia. He says that because B.C. has relatively few treaties, unlike other parts of Canada, any serious dispute is likely headed toward a lengthy court battle. “Ultimately, I don’t think [First Nations] could stop a pipeline from being built, but they could throw up so many roadblocks that it would take a really long time.”

Early next year, a federally appointed joint review panel will begin conducting oral hearings with affected communities, followed by a more formal process. While some First Nations leaders say recent comments by federal Minister of Natural Resources Joe Oliver in favour of opening up oil sands exports to China suggest the outcome of the process has already been determined, Stanway says Canadians should have faith that a fair decision, balancing economic and environmental interests, will ultimately be reached. “Canada probably has the best and most rigorous regulatory process in the world,” he says.

Klein, for one, is not so sure. She argues that the potential riches represented by the oil sands has blinded many Canadian policy-makers to the big picture. And she says the mounting protests over projects like Keystone XL and Northern Gateway suggest that both Canadians and Americans are beginning to take a long, hard look at the true costs of cheap energy. “Personally, I think a lot of this has to do with the lessons learned from the BP disaster,” she says, referring to last year’s massive spill in the Gulf of Mexico. “It just keeps happening again and again, and people are saying, ‘We don’t want to gamble our communities based on the word of an oil company who says they’re using the best technology so there’s no risk.’ People don’t buy it.”