Do Canada's Oil Sands Deserve World's Dirtiest Commodity Label?
Commodities / Crude Oil Jan 05, 2010 - 02:42 AM GMTBy: Lorimer_Wilson
“When you think of Canada, which qualities come to mind: the world's peacekeeper, the friendly nation, a liberal counterweight to the harsher pieties of its southern neighbour, decent, civilised, fair, well-governed? Think again. This country's government is now behaving with all the sophistication of a chimpanzee's tea party.
From Dudley Do-Right to Corrupt Petro-State?
So amazingly destructive has Canada become ... I am watching the astonishing spectacle of a beautiful, cultured nation turning itself into a corrupt petro-state. Canada is slipping down the development ladder, retreating from a complex, diverse economy towards dependence on a single primary resource, which happens to be the dirtiest commodity known to man. The price of this transition is the brutalisation of the country ... Until now I believed that the nation that has done most to sabotage a new climate change agreement was the United States. I was wrong. The real villain is Canada." The Guardian, United Kingdom.
Canada, the Dudley Do-Right of the international community, insists on exploiting its vast and dirty oil reserves in the so-called "tar sands" under Alberta. The intro to an article by British eco-scold George Monbiot declared: "Canada's image lies in tatters. It is now to climate what Japan is to whaling." The South Florida Sun Sentinel, United States
Is Canada's Sullied Image Deserved?
Says Eric Reguly of Canada's Globe and Mail: "Canada has had a rough ride at the Copenhagen climate-change summit. It is unloved, even despised, by the scientists, the environmental groups and most developing countries. It will leave the summit with a sullied image - the arrogant, rich country that is part of the problem, not part of the solution.
This image is both deserved and undeserved. It is undeserved in the sense that Canada's new emissions output target - 20 per cent less than 2006's level by 2020 - is actually slightly more than the [17%] U.S. pledge. And get this: When you dig into the numbers, the drop between 2006 (to use Canada's arbitrary base-year number) and 2020 is roughly the same as the European Union's [20% - 30%]. Canada is also pumping small fortunes into clean-energy technology but the Americans and the Europeans will emerge from the summit as good guys, if not heroes. Not the Canadians."
The Pros and Cons of Canada's Actions
Julius Melnitzer of Canada's Financial Post reports that [from the get-go] Canada was not prepared to act independently of the U.S. on climate change legislation. "Rather, our policy will always closely parallel U.S. law [because] when push comes to shove, we have little choice."
"It's hard to imagine Canada not following on the U.S. lead because we desperately need to get inside their carbon market and we desperately need to ensure that their laws don't work against the interests of our exporters,' said Gray Taylor of [the law firm] Bennett Jones in Toronto. "Harmonization will be critical not so much from the perspective of regulatory ease but from the perspective of financial necessity," said Elizabeth DeMarco, who leads Macleod Dixon's energy practice in Toronto.
"Whatever and whenever the U.S. decides what it is going to do, Prime Minister Harper will follow suit," said Jean Piette, chair of Ogilvy Renault's environmental practice in Montreal.
Be that as it may Reguly goes on to say (with Nathan Vanderklippe) in an edited excerpt from another article: "Of the almost 200 countries who attended the recent Copenhagen conference few of them had [and still have] a more blackened image [than Canada]... What shocks some countries is Canada's response to Kyoto. When it ratified the treaty in 2002, then Prime Minister Jean Chrétien vowed that Canada would reduce emissions by 6 per cent by 2012 over the 1990 base year [yet] they are up 26 per cent or more instead as a result of the turbo-charged expansion of the Alberta oil sands, one of the single biggest sources of planet-warming carbon dioxide emissions."
"Canada did not take its Kyoto obligations seriously, particularly under Stephen Harper, and that goes against Canada's image," said Saleemul Huq, a lead author of the reports of the Intergovernmental Panel of Climate Change, the United Nations scientific body that assesses climate change. "Prime Minister Stephen Harper has committed to a 20 per cent reduction by 2020, but from a new base year - 2006 - when the Canadian economy was on fire. [To emphasize its position] in late 2007 Canada blocked a Commonwealth resolution to support binding emissions targets for industrialized countries."
Sarah Powell of Davies Ward Phillips & Vineberg also believes Ottawa could have done more. "The government originally said it was going to establish a Canadian regime and then harmonize it instead of just being a follower. They haven't gone about it that way and that's not acceptable because the government's stumble means that Canadian business, which could have had the advantage of domestic experience with GHG regulation and a carbon market, will be left behind once the Americans gear up."
Shabby Image Not Entirely Justified
Not everyone thinks Canada's shabby image is justified, however. Matthew Bateson, director of energy and climate for the World Business Council for Sustainable Development (whose members include B.C. Hydro and Canadian oil sands giant Suncor) says "It's unfair to paint Canada with a black brush." He notes that, in spite of the fact that Canada only generates 2% of the world's greenhouse gases, "Canada is one of the world leaders in developing carbon capture and storage (CCS), a new technology that strips carbon dioxide from the flue gases of coal-burning plants or refineries and buries it underground. CCS is one of the technologies needed to transition to a new, low-carbon economy and Canada is putting its money where its mouth is" [and the oil sands are just 4% of Canada's total emissions with transportation accounting for the highest GHG percentage right across the country].
Reguly concludes that "much of Canada's task lies in trying to dab green onto the grubby oil sands - or at least convincing others that some green exists but its efforts have been decidedly low-key and ineffectual. To the public, the image of the oil sands has been shaped by Greenpeace campaigners. Indeed, even some of Canada's respected business leaders acknowledge that they have fallen behind in the image campaign." [Even the Premier of Ontario, Canada's largest and most populous province, has chimed in recently suggesting that Canada's moral authority in the world has been damaged by the lack of leadership on the climate file and that "when it comes to the climate change debate we've been punching below our weight."]
"The industry has to accept some responsibility," said Murray Edwards, vice-chairman of oil sands miner Canadian Natural Resources Ltd. of Calgary "It has not been as pro-active as it should have been or could have been over the last decade in making sure the public understands the balance in the oil sands between the economy and the environment." One company, Cenovus Energy Inc., has bought TV spots aimed to show the benefits of its products. The Canadian Association of Petroleum Producers delivers representatives to various debates to help shape the "conversation" and works to correct inaccuracies in anything written about the oil sands but even strong voices aren't getting much attention.
1606 Dead Ducks and Counting
"This clearly has the hallmarks of being a situation in which the reputation is under siege and it needs to be managed," said Niraj Dawar, a professor of marketing communications at the Richard Ivey School of Business.
"A picture of a dead duck [1,606 died in an oil sands tailings pond] is far more powerful than the data or information that they can provide. What they need to come up with are pictures of their own."
Lorimer Wilson is Editor of www.FinancialArticleSummariesToday.com (F.A.S.T.) and www.MunKnee.com (Money, Monnee, Munknee!) and an economic analyst and financial writer. He is also a frequent contributor to this site and can be reached at editor@munknee.com."
© 2009 Copyright Lorimer Wilson- All Rights Reserved
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