Fossil fuels are the engine of the economy. In Canada the Alberta oilsands, depicted as tarsands by environmentalists, have provided much needed revenue to provide infrastructure and fund social programs, often in the form of transfer payments to "have not" provinces. Western provinces, particularly Alberta and Saskatchewan, have benefited from non-renewable resource revenue. The federal government has also benefited from royalty payments. The process has been politicized both in the United States and Canada.
Pipeline Politics - A method of getting Alberta bitumen to markets
A network of pipelines is the method of transporting fossil fuels from their extraction sites to markets in North America. As one of the major producers in North America, Alberta transports its bitumen-based oil to Texas, where it is refined. With the increased development of the oilsands TransCanada pipelines has been attempting to get approval for a pipeline from Hardisty, Alberta to Port Arthur, Texas. In order for the XL Keystone pipeline to cross the Canada-US border, a presidential permit is required for the project to proceed.
The XL Keystone Pipeline
was put on hold last year by President Obama claiming environmental concerns, specifically the Nebraska Sandhills. Congress attempted to force the President's hand by including the approval of the pipeline in various bills, which prompted the President to reject the pipeline outright.
Obama's rejection came after weeks of anti-oilsands protests in Washington, including high profile Hollywood celebrities. Hollywood was a major supporter of the Obama campaign, with George Clooney committing to raise $12 Million in a fundraiser.
Add to that the voice of Robert Redford, who claimed that the rejection was a spectacular blow against the oilsands and would change the world.
"The decision to shelve the proposal, gushed Hollywood activist Robert Redford, “represents a victory of historic proportions for people from throughout the pipeline path and all across America who have waged an uphill, years-long fight against one of the most nightmarish fossil fuel projects of our time.” Ethical Oil.org
While Republicans claimed that the president's rejection was politically motivated, other claimed that it was for concern of the environment, which required further study, especially in Nebraska. The governor of Nebraska gave the OK for a new route in January 2013. In a letter to President Obama and Secretary of State Hillary Clinton Governor Dave Heineman stated
that his Department of Environmental Quality found:
Construction and operation of Keystone XL, with builder TransCanada’s commitments to safety, “would have minimal environmental impacts in Nebraska.” NDEQ said the new Keystone XL route avoids the sensitive Sand Hills as well as fragile soils in the northern part of the state.
The pipeline’s construction would bring to the state more than $418 million in economic benefits and $16.5 million in use taxes from construction materials.
Annual local property taxes in the first full year of valuation would be between $11 million and $13 million.
The ball is clearly in President Obama's and John Kerry's court now. With his inauguration speech last week, the president made clear that the environment
is one of his top concerns.
We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries – we must claim its promise.
John Kerry has been a long time climate change advocate, who said he would study the environmental assessment closely. Will both the president and John Kerry put their words into action by rejecting the pipeline?
The other pipeline critical to Alberta oilsands development is the Northern Gateway pipeline,
which would carry oil from Alberta through pristine land, much of it claimed by aboriginals, to Kitimat, British Columbia (BC). With the passage of last year's omnibus budget bill, the federal government included environmental regulations, which speed the approval process. This has run into obstacles with environmentalists and natives and resulted in the "Idle no more movement."
BC's Premier Christy Clark has given notice that the pipeline is a non-starter unless BC gets a share of Alberta's oil royalty revenues. In the meantime Christy Clark and Alberta Premier Alison Redford have stopped talking to each other. The pipeline's approval, which will get the final go ahead by the end of 2014, is up in the air.
Redford in an appeal to her province said that reduced royalty revenues will cost the Alberta government $6 billion and the federal government $7 billion. Redford is banking on the pipelines to improve her royalties. That, however, may be unrealistic in view of the current political situation both north and south of the border. The issue, to be sure, is emotional to advocates on either side of the issue.
Is green energy ready for prime time?
While green energy, such as solar, wind and bio fuels is desirable, it is not ready for prime time and affordable alternate energy is still a few years away. Of course environmentalists will never discuss the real estate required for solar panel farms or wind turbines nor the fact that thousands of birds get killed by wind power. Solar power is very expensive and for now can not sufficiently provide the energy required to run a household. As an example, an Edmonton solar company is offering to rent solar panels to home owners. The panels, which require an initial investment of about $1000 can only provide 18-30% of actual power required. Home owners must remain on the grid. The savings in energy costs are minimal. The biggest elements of an electricity bill in Alberta are the riders and fees and not the actual energy used. The lease contract is long term.
To make a long story short, whether we like it or not, oil will still be around for decades. Sending oil to the United States and Asian markets will reduce our dependence on Middle East oil. Coal, which is currently used in power plants in China is a much larger emitter of carbons.
Global Warming and Climate Change
Scientists are divided on the cause of global warming or if there is global warming at all. Recent predictions by the British national weather service
indicate that global warming has stalled and that world temperatures will not rise over the next five years.
The updated computer model of the planet’s climate lowers by about 20% an earlier prediction of how much hotter the coming few years will be than the long-term average since 1971.
The new prediction “does not necessarily tell us anything about long-term predictions of climate change,” the Met Office said in a statement, and it is “actively researching potential causes of the recent slowdown in global warming, including natural variability.”
“I suspect a lot of modelling groups are going to have to start revising their forecasts down, because most of them are running too hot,” said Ross McKitrick, a University of Guelph economist who was instrumental in debunking the famous “hockey stick” graph of rising global temperatures. “There are so many models that are now so far off that it suggests a wider problem with the technique.”
While there should be an "all of the above" strategy and efforts should be made to develop alternative energy, we also need to get into touch with reality. Oil, coal and natural gas are still primarily used to produce energy and will for some time, especially in developing economies like China. Even the often touted green Germany has had to cut back on the tempo of green energy.
Instead of demonizing the oilsands, we should continue to move ahead with the development of green alternatives, improve the environmental standards for emissions, strictly enforce them and assist developing economies like China to clean up their act on coal.
It's time to cut back on the rhetoric and get real. This constant wrangling is counter-productive.