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Alberta Clipper – Betamax Of Energy World

September 25th, 2009 by Fereidoon Sioshansi, EEnergy Informer

Even former President George Bush had to admit that the US economy – like many others but even more so – is addicted to oil, which increasingly means imported oil. The question is do we continue to feed the addict no matter what the costs and consequences, or do we encourage the addict to kick the habit?

The Bush Administration’s energy policy, to the extent that there was any policy, was the former. When petrol prices hit new highs, the administration would send emissaries to Saudi Arabia asking for increased OPEC production. There was little attention paid to increasing fuel efficiency of cars – or better yet – allowing higher prices to do the job by encouraging gas sipping rather than gas guzzling cars. And as far as the Bush Administration was concerned, climate change could wait for the next President.

Candidate Obama’s promise was that he would reverse Bush era policies. But President Obama has discovered that it was one thing to promise as a candidate and an entirely different thing to deliver given a skeptical Congress, powerful special interest groups and pressure from strategic partners.

A case in point was a proposal by Enbridge Energy to build Alberta Clipper, a 1,000 mile pipeline to transport 800,000 barrels of oil extracted from tar sands of Alberta to the US. Environmentalists on both side of the border opposed the pipeline since extracting oil from tar sands is energy-intensive and causes significant water and land degradation. Estimates vary depending on who you ask, but most experts say extracting a barrel of oil from tar sands releases at least 5 times more greenhouse gas emissions as that associated with conventional oil.

A similar pipeline proposed by TransCanada received Bush administration’s blessing in 2008. Environmentalists, hoping that things would be different under the Obama administration, were disappointed when the US state department granted a permit for the project to proceed in mid August.

The project’s opponents point out that allowing the pipeline to be built would be the wrong decision at the wrong time, just months before the Copenhagen conference in December. The critics ask how can the US – or Canada – seriously talk about averting climate change in Copenhagen if one country is willing to ruin its landscape and the other is willing to buy the dirty oil so Joe Plumber can drive his gas guzzling SUV on $3 per gallon oil?

Keith Stewart, director of climate change at World Wildlife Fund Canada was quoted in The Financial Times (11 Aug 09) saying, “Approving new mega projects like Alberta Clipper pipeline would lock North America into the old, high-carbon energy economy,” adding, “We need to invest in the green economy of the future, not pour billions into the Betamax of the energy world.”

By allowing the project to proceed, Obama’s green credentials are tarnished.

F.P. Shioshansi

This post is extracted from EEnergy Informer, September 2009 issue.

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2 Responses to “Alberta Clipper – Betamax Of Energy World”

  1. Clean Future Energy Says:

    Let’s put things into perspective.

    800.000 bbl/day is about 1/30th of the USA’s daily consumption. So the comment that it would lock North America into the old, high-carbon energy economy, is way off the mark.

    Tar Sands are a problem environmentally speaking, but in my opinion the land degradation / water issue is far more important than the small impact on CO2 emissions.

    As long as both countries are committed to cutting emissions, it should not matter where they come from. I know campaigners love figureheads of hate, butthe whole point of carbon trading or taxation, is that the most efficient solutions are found, not the ones that make campaigners the most happy.

  2. Jean-Edouard Ferrier Says:

    As suggested by Fereldoon Shioshansi, Alberta Clipper pipeline project raises two main issues, it underlines the persistent US oil imports dependency, and raises concerns about the consistency of the environmental policy of the current administration.

    Indeed, as 70 % of the American oil consumption is related to transportation, promoting fuel-efficiency improvements, enacting tax incentives for economic vehicles, or reinvesting in public transportation systems would help alleviating the burden of oil dependency, while reducing GES emissions. Still, many experts underline the fact that such measures may be solutions on the long run only, as behavioral changes require time, and as the post-2008 drop on oil prices has reduced the relative competitiveness of alternative fuel sources (biofuels, coal-to-liquids and gas-to-liquids) on the short run.

    Besides, it should not be forgotten that oil imports account for roughly 60 % of the US consumption (a continuous 20-year increase before the crisis: 1985-2006). Among the main crude suppliers: Saudi Arabia, Nigeria, Venezuela and Iraq. As suggested in recent reports by the RAND (see A. Goldthau’s post) or the American think tank CFR (Council on Foreign Relations), oil supplies diversification’s impact on international relationships could be noticeable, reducing (modestly, yet) the threats of political tensions on the security of supply and the tensions on the oil markets (due to certain increase of oil production). Thus, the RAND assesses that the tensions in Middle East cost 90-110$ billion a year (20 to 35 times the cost of Alberta Clipper project).

    Furthermore, the expected volume (800.000 bbl a day, equal to the daily import from Nigeria) might contribute in enhancing the exploitation of Alberta tar sands resources, thanks to the settlement of transport infrastructures (as for the current project, already built along an existing pipeline). Without mentioning the fact that the workforce needed on the project (expected to reach 3.000) may let hope positive side effects on local employment (North Dakota and Minnesota).

    It would have seemed difficult for the Obama Administration not to grant the project its approval, given the conjuncture and the political signal already provided by the stimulus package (61,3$ billion for energy, only): the pipeline is expected to be running by mid-2010. Which suggests the difficulty to compare the project (at least in terms of oil dependency) with environmental and sustainable measures, given their difference of time scale.

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