Alberta's Tar Sands are a Burden, Not a Blessing | HuffPost

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Stephane Dion, the former Liberal leader, once said that "there is no environmental minister on Earth who can stop the oil from coming out of the sands, because the money is too big." But that was a long time ago and he probably hadn't considered that numerous countries would take action to curb fossil fuel demand.

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Writer at russellblinch.com

Writer at russellblinch.com

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Exxon Mobil, which makes billions of dollars in profits as the world's largest oil company, will soon make it clear to shareholders that its assets are at risk in a carbon-constrained world.

Alberta, owner of one of the world's largest oil resources but saddled with billions of dollars in debt, is unlikely to fess up anytime soon that its economic future is in peril in a carbon-constrained world.

So what is Exxon up to and why won't Alberta acknowledge that the tar sands are a potential burden rather than an endless piggy bank, as it is now portrayed? It's all about leadership.

After being pestered for years by shareholder activists, Exxon has agreed to produce a public document on its "carbon asset risk." This means it is willing to admit that some of its fossil fuel assets -- possibly including the spanking $13 billion Kearl tar sands project in Northern Alberta -- could be wiped off its books if governments start taking action on climate change.

This is a big breakthrough and it's all part of a fight by groups such as Ceres, which last year announced that a coalition of 70 investors managing $3 trillion in assets was working to get the world's top oil producers to face up to their carbon-based risks. Many of these companies have big stakes in the Alberta oil patch.

"Who better than Exxon Mobil to start answering the tough questions about the inevitable transition to a low-carbon global economy?" Mindy Lubber, president of the green investor network Ceres, said in a report in the Guardian.

"Market forces such as carbon-reducing regulations, weakening demand for oil and coal in many parts of the world and rapid growth of renewables clearly show that energy leaders of tomorrow will be those that address carbon asset risks today."

Read that last line again because it's important: "Energy leaders of tomorrow will be those that address carbon risks of today."

We know the Harper government won't give us the leadership on energy Canada needs and in fact its policies are speeding up the demise of other engines of growth in the country, such as its once strong manufacturing base.

But in Alberta there is a chance for change because the province's latest premier, Alison Redford, has left the building. Whatever the mistakes she made or didn't make in her short, Sarah Palin like tenure, it seems the government is in need of brave new ideas.

Despite the heady boom of the tar sands, Alberta has been borrowing from the future to fund burgeoning infrastructure needs. But with the sweetheart deal oil companies get in Alberta, it is increasingly clear the province can ill afford the tar sands the way things are structured now.

Don't believe the rosy forecasts that Alberta's oil production will double and triple in the coming years. This will only happen if high demand and high prices continue unabated, a risky proposition.

Stephane Dion, the former Liberal leader, once said that "there is no environmental minister on Earth who can stop the oil from coming out of the sands, because the money is too big."

But that was a long time ago and he probably hadn't considered that numerous countries would take action to curb fossil fuel demand. China is crucial in all this as they are embracing renewable fuels in a big way. Throw in the long expected slowdown in China and you can expect oil prices to fall off a cliff. How may tar sands projects are viable at $75 a barrel and lower?

It is clear Alberta needs to pick a new leader in the race expected later this year who can grasp what is at risk and deal with the changes sweeping the globe. Let us not forget Alberta produced such a remarkable leader -- Peter Lougheed, who ruled over the province from 1971 to 1985. He advised Albertans years ago to not be doormats to the oil industry and to remember to squirrel away for the future.

"Lougheed advised Albertans to behave like an owner, collect their fair share, save for the rainy day, go slow, add value and govern wisely," Andrew Nikiforuk, one of the country's sharpest tar sands critics wrote in the Tyee recently. "This remains a radical agenda for an ailing province."

Alberta needs new direction, even radical change -- for its own sake and for the sake of the rest of the country, if not for the world.

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The Oil Sands and Canada's Environment

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Syncrude's Mildred Lake Upgrader, part of The Syncrude Project complex for oil sands processing, is pictured Monday, March 8, 2006 in Fort McMurray, Alberta, Canada. (credit:Getty)

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The Syncrude oil sands extraction facility is reflected in a lake reclaimed from an old mine near the town of Fort McMurray in Alberta, Canada on October 22, 2009. (credit:Getty)

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A disused mining machine on display in front of the Syncrude oil sands extraction facility near the town of Fort McMurray in Alberta on October 22, 2009. (credit:Getty)

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The Suncor oilsands operation uses trucks that are 3 stories tall, weigh one million pounds, and cost 7 million dollars each. (credit:Getty)

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Oil sits on the surface at a Suncor Energy Inc. oilsands mining operation near Fort McMurray, Alberta, Canada, on Tuesday, Aug. 13, 2013. Photographer: (credit:Getty)

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A large oil refinery along the Athabasca River in Alberta's Oilsands. Fort McMurray, Alberta. (credit:Getty)

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Oils mixes with water at a tailings pond at a Suncor Energy Inc. oilsands mining operation near Fort McMurray, Alberta, Canada, on Tuesday, Aug. 13, 2013. (credit:Getty)

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Fort McMurray is in the heart of the world's biggest single oil deposit - the Athabasca Oil Sands, and the oil is extracted by surface mining and refined in the region. The oil production is at the heart of the economy. (credit:Getty)

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In this Aug. 5, 2005 file photo, the Syncrude upgrader spreads out towards the horizon at the company's oil sands project in Ft. McMurray, Alberta, Canada. (credit:AP)

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This Tuesday, July 10, 2012 aerial photo shows a Nexen oil sands facility near Fort McMurray, Alberta, Canada. (credit:AP)

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This Sept. 19, 2011 aerial photo shows an oilsands facility near Fort McMurray, in Alberta, Canada. (credit:AP)

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This Sept. 19, 2011 aerial photo shows an oilsands tailings pond at a mine facility near Fort McMurray, in Alberta, Canada. (credit:AP)

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This Sept. 19, 2011 aerial photo shows an oilsands tailings pond at a mine facility near Fort McMurray, in Alberta, Canada. (credit:AP)

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The Syncrude extraction facility in the northern Alberta oil sand fields is reflected in the pool of water being recycled for re-use. (credit:Getty Images)

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A night view of the Syncrude oil sands extraction facility near the town of Fort McMurray in Alberta Province, Canada on October 22, 2009. (credit:Getty)

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Aerial view of a lake and forests in the vicinity of oil sands extraction facilities near the town of Fort McMurray in Alberta, Canada on October 23, 2009. (credit:Getty)

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Workers use heavy machinery in the tailings pond at the Syncrude oil sands extraction facility near the town of Fort McMurray in Alberta , Canada on October 25, 2009. (credit:Getty)

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Fort McMurray is in the heart of the world's biggest single oil deposit - the Athabasca Oil Sands, and the oil is extracted by surface mining and refined in the region. The oil production is at the heart of the economy. (credit:Getty)

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A large oil refinery in Alberta's Oilsands project. Fort McMurray, Alberta. (credit:Getty)

CFB Cold Lake, CNRL(20 of44)

A bitumen leak was reported at a Canadian Natural Resources oilsands operation in the weapons range part of the RCAF base in June 2013. (credit:WikiMedia:)

CFB Cold Lake, CNRL(21 of44)

Company officials said the leak - at what it calls its Primrose operation - was caused by faulty machinery at one of the wells, affected an area of approximately 13.5 hectares and released as much as 3,200 litres of bitumen each day. (credit:Getty)

CFB Cold Lake, CNRL(22 of44)

Preliminary tallies put the death toll from the leak at 16 birds, seven small mammals and 38 amphibians. Dozen were rescued and taken to an Edmonton centre for rehabilitation. (credit:Shutterstock)

CFB Cold Lake(23 of44)

As of early August 2013, more than 1.1 million litres of bitumen had been pulled from marshlands, bushes and waterways. (credit:Getty)

CFB Cold Lake, CNRL(24 of44)

Although CNRL could not say when the leak may finally be stopped, it estimates it will likely cost more than $40 million to clean up. (credit:Getty)

Plains Midstream(25 of44)

Little Buffalo band member Melina Laboucan-Massimo scoops up July 13, 2012 what appears to oil from the pond shoreline near the site of a 4.5 million-litre Plains Midstream pipeline leak detected April 29, 2011. Photos taken at the site and released by Greenpeace of Alberta's second-worst pipeline spill suggest at least part of the site remains heavily contaminated despite company suggestions that the cleanup is complete. (credit:THE CANADIAN PRESS/HO-Greenpeace-Joe Whittle)

Plains Midstream Canada(26 of44)

A boat passes by a boom stretching out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(27 of44)

Debris pushes up against a boom as it stretches out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(28 of44)

A boom stretches out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream(29 of44)

A boom stretches out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(30 of44)

A photographer snaps a boom stretching out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(31 of44)

A boom stretches out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(32 of44)

A worker slows traffic while a boom stretches out to contain a pipeline leak on the Gleniffer reservoir near Innisfail, Alta., Tuesday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(33 of44)

A no swimming sign along the banks of the Gleniffer reservoir while a boom stretches out to contain a pipeline leak on the lake near Innisfail, Alta., Friday, June 12, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of sour crude near Sundre, Alberta, on June 7 and flowed downstream in the Red Deer river to the reservoir. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(34 of44)

Oil from a pipeline leak coats a pond near Sundre, Alta., Friday, June 8, 2012. Plains Midstream Canada says one of their non-functioning pipeline leaked between 1,000-3,000 barrels of oil. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(35 of44)

Oil from a pipeline leak coats a pond near Sundre, Alta., Friday, June 8, 2012. Plains Midstream Canada says one of their non-functioning pipeline leaked between 1,000-3,000 barrels of oil. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(36 of44)

Oil from a pipeline leak coats a pond near Sundre, Alta., Friday, June 8, 2012. Plains Midstream Canada says one of their non-functioning pipeline leaked between 1,000-3,000 barrels of oil. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Plains Midstream Canada(37 of44)

Tracks pass through oil on the banks of the Gleniffer reservoir after a pipeline leak near Sundre, Alta., on Friday, June 8, 2012. Plains Midstream Canada says one of their non-functioning pipelines leaked between 1,000-3,000 barrels of oil. (credit:THE CANADIAN PRESS/Jeff McIntosh)

Enbrige's Athabasca pipeline(38 of44)

Approximately 1,450 barrels of oil spilled from a pumping station along Enbridge’s Athabasca pipeline in June 2012.The spill occurred approximately 24 kilometres from Elk Point, Alta., a village located 200 kilometres northeast of Edmonton. (credit:(THE CANADIAN PRESS/Larry MacDougal))

Lake Wabamun(39 of44)

Wreckage from the August 3rd train derailment and subsequent oil spill is seen lining the shore of Lake Wabamun on Monday, August 8, 2005, as clean-up continues. (credit:(CP PHOTO - Tim Smith))

Lake Wabamun(40 of44)

Wreckage and black oil from the August 3rd train derailment and subsequent oil spill are seen lining the shore and waters of Lake Wabamun on Monday, August 8, 2005, as clean-up continues. (credit:(CP PHOTO - Tim Smith))

Lake Wabamun(41 of44)

White absorbent boom is seen lining the shores of Lake Wabamun, Alberta, as the clean-up effort from the August 3rd train derailment and subsequent oil spill continues on Monday, August 8, 2005. (credit:(CP PHOTO - Tim Smith))

Lake Wabamun(42 of44)

Wreckage and black oil from the August 3rd train derailment and subsequent oil spill are seen lining the shore and waters of Lake Wabamun on Monday, August 8, 2005, as clean-up continues. (credit:(CP PHOTO - Tim Smith))

Lake Wabamun(43 of44)

Wreckage and black oil from the August 3rd train derailment and subsequent oil spill are seen lining the shore and waters of Lake Wabamun on Monday, August 8, 2005, as clean-up continues. Lake Wabamun was severely polluted when a train carrying heavy oil derailed on August 3, 2005, spilling much of it's load into the lake. (credit:(CP PHOTO - Tim Smith))

Lake Wabamun(44 of44)

Rail cars leak bunker fuel oil, meters from summer homes bordering Lake Wabamun, after a freight train derailed, in this August 3, 2005 file photo, near the town of Wabamun, Alta. Canadian National Railway faces an environmental charge stemming from the train derailment and oil spill at a popular Alberta lake last summer. (credit:(CP PICTURE ARCHIVE/ John Ulan))

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