Q&A: Energy Independence, Obama and Canada's Oil Sands
By John LorincAndrew Nikiforuk, a journalist based in Calgary, has closely followed the development of northern Alberta's massive deposits of bitumen — a heavy black oil impregnating the sand and soil over hundreds of square miles northeast of Edmonton.
The oil sands, or tar sands, as they are sometimes known, must undergo rigorous processing to extract useable oil — an expensive and dirty undertaking that becomes more attractive to developers as oil prices climb, and less so as they fall.
The province saw unprecedented growth at the oil sands over the last decade, but low global oil prices have now stalled Alberta's bitumen boom.
In his 2008 book, "Tar Sands: Dirty Oil and the Future of a Continent," Nikiforuk offers a scathing critique of what he calls the corporate greed and regulatory indifference that have attended development of Canada's vast oil patch. Mr. Nikiforuk spoke with Green Inc. recently about how President Barack Obama, who has promised to pursue energy independence for the United States and who is expected to make a state visit to Canada later this month, might regard the tar sands.
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Do you expect the Obama administration to change in the way the oil sands are regarded as a continental resource?
It's not clear. George Bush and Dick Cheney saw the resource as a pillar of economic activity and energy security for the United States. But the tar sands have delivered neither security nor sustainability. How [President Obama] deals with the rapid development of the tar sands will pretty much indicate how serious he is about a switch to alternative and renewable energies.
You talk about the oil sands as being a transitional resource to a low-carbon economy. Do you think there's any recognition of this notion in the new administration?
There is among people like Henry Waxman, chairman of the energy committee in the U.S. Congress. But, again there's no indication the Obama administration gets this point. There are two perspectives on the oil sands. You have companies that want to make it the next Saudi Arabia. The other is that it's a transitional resource to a low-carbon economy and to regard it as anything else is to drain the continent's financial resources.
What's the impact of the current economy on the future development of the oil sands?
The slowdown is quite phenomenal. We're already looking at a withdrawal of anywhere from $50 to $100 billion in capital at the moment. It's a fantastic opportunity for both the United States and Canada to reassess the world's largest energy project. There's been virtually no clear thinking about the project in Canada. It gives the United States also an opportunity to say, O.K., we're already addicted to this resource to some degree. Much of the U.S. Midwest is already running on bitumen. Do we want to extend this addiction and at what cost? Or should we set other goals and say, one to two million barrels of oil a day from the tar sands is all we really need to make the transition?
Do you think the move towards national and possibly continental cap-and-trade systems will further that goal?
I'm not quite sure. Cap-and-trade has had a checkered career in Europe and it takes us away from the real focus, which is that maybe we shouldn't be making these emissions in the first place. Maybe we should really be focusing on smart grids, electric cars and a whole new approach to doing things. The problem with cap-and-trade and programs such as carbon capture and storage is that they all assume that business as usual can continue. The financial meltdown and peak oil has pretty much demonstrated that business as usual's not going to work.
