Anyone who read yesterday’s blog on oil sands will know it’s a fuel with serious ecological and social problems. Well, Canadian oil sands producers should brace for further bad news – this time from south of the border.
David Pumphrey, a former official in the Department of Energy and now a senior fellow at the Centre for Strategic and International Studies, said that increasingly oil sands are seen as “threat No. 1” in North America’s growing battle against greenhouse gas emissions.
Pumphrey said there are more than a half-dozen bills before Congress that would introduce a national system to cap greenhouse gas emissions and establish a market for emissions credits. Several of those bills would “penalize” energy sources like Alberta’s oil sands, which produce far more carbon dioxide emissions than conventional, lighter crude, he said.
The climate change challenge is only one of several “above ground risks” facing the oil sands projects, which nonetheless represent a promising source of additional crude oil for North American markets, the conference heard. Matthew McManus, an energy official in the State Department, said the U.S. perceives the Canadian oil and gas sector as one of “near zero political risk” and enormous investment opportunity.
For an industry that is meant to specialize in the long-term this is a no-brainer. If near zero political risk equates to huge and potentially catastrophic ecological risk, then that in turn will lead to increased political risk. This stuff ain’t rocket science.