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The federal agency investigating the Lac-Megantic oil train derailment and explosion that killed forty-seven people released recommendations last week to improve the safety of shipping crude oil by rail. If the recommendations are implemented by the federal government they will serve as a strong step forward in protecting communities living along railway lines.
“The federal transport minister has a clear choice: protect public safety or secure profits of oil companies,” says Keith Stewart, a climate and energy campaigner with Greenpeace Canada.
One of the country’s most active lobby groups – the Canadian Association of Petroleum Producers (CAPP) – responded to the recommendations earlier this week. CAPP asked the federal government “to ensure their implementation does not interrupt service and respects the competitiveness of transporting our products by rail.” In other words, new regulations should not interfere with business as usual for the oil industry.
“Companies have to pay the price for safety. Their profits cannot come before communities, the environment and general safety,” John Bennett, director of the Sierra Club Canada told DeSmog Canada.
The Transport Safety Board (TSB) made three recommendations to Transport Canada improve safety of oil-by-rail shipments: tougher standards for the susceptible-to-rupturing DOT 111 tank cars, strategic routing of oil trains that considers the environment and communities, and emergency response plans for rail lines transporting large volumes of oil.
Greenpeace and the Sierra Club welcome the recommendations. Both organizations have been pushing for stricter oil by rail transport rules since before disaster struck Lac-Megantic, Quebec on July 6th of last year. Rail company CN also supports the TSB’s recommendations. Rail tank cars are owned either by shipping companies or oil producers. Rail companies on the other hand own the rails, and are liable for derailments.
The recommendations focus on tank cars, not the rails themselves, which is one of the shortcomings of the recommendations. Improvements on both are needed.
Recommendations cannot protect the public if they are not implemented. Bennett is not very optimistic the recommendations will be applied by the federal government. Many TSB recommendations in the past, he says, have “just sat there” and were not adopted, like rail line improvement recommendations made after the Lake Wabamun derailment in Alberta in 2005.
Stewart speculates the federal government will wait to see what the U.S. does, something he thinks is very problematic.
“Lives are at risk. Canada should be taking a leadership role,” Stewart told DeSmog from Toronto.
The TSB and the U.S. National Transport Safety Board announced their safety recommendations for oil-by-rail intentionally at the same time. Transport Canada has ninety days to reply to the TSB’s findings. Upon release of the recommendations in Ottawa on January 23rd, TSB chair Wendy Tadros insisted “change must come and it must come now.”
If adopted, applying the recommendations may prove to be difficult. Rerouting oil tank cars away from densely populated or environmentally sensitive areas is difficult due to Canada’s limited rail options.
Emergency response plans also require greater communication between shippers in the public, especially regarding large oil shipments. Shippers have been reluctant to do this in the past.
“Canadians need to ask themselves why are we doing this? Transporting oil more – whether by rail or pipeline – is a risk with little to no benefits for communities because it is going for export,” says Bennett, who is based in Ottawa.
“We already have enough infrastructure to meet our own oil consumption needs,” Bennett told DeSmog Canada.
Oil tank car shipments in Canada have dramatically jumped from five hundred carloads in 2009 to 160,000 last year, but Canada’s consumption of oil has declined during the same period. All of the recent pipeline proposals in Canada are destined to export oil out of the country with the exception of the Line 9 pipeline in Ontario and Quebec.
“The federal government would be more than happy for this debate to be rail versus pipeline oil shipments,” says Stewart.
“The debate should really be between dirty energy and clean energy and why we continue to invest billions in infrastructure for the fossil fuel industry when that money should be used to fight climate change and reduce our dependence on oil,” Stewart told DeSmog Canada.
The oilsands boom in Alberta and the Bakken shale oil boom in North Dakota coupled with stiff opposition to new pipeline approvals have been blamed for the massive increase in oil-by-rail transport in North America. In the US, oil tank carloads went from 10,800 in 2009 to 400,000 in 2013.
Image Credit: Transportation Safety Board
Andrew Nikiforuk: Canada’s Petrostate Has “Dramatically Diminished Our International Reputation” | DeSmog Canada
“Alberta is very much a petrostate,” says journalist and author Andrew Nikiforuk. “It gets about 30 per cent of its income from the oil and gas industry. So as a consequence, the government over time has tended more to represent this resource and the industry that produces it, than its citizens. This is very typical of a petrostate.”
The flow of money, he says, is at the heart of the issue. “When governments run on petro dollars or petro revenue instead of taxes then they kind of sever the link between taxation and representation, and if you’re not being taxed then you’re not being represented. And that’s what happens in petrostates and as a consequence they come to represent the oil and gas industry. Albert is a classic example of this kind of relationship.”
In this interview with DeSmog, Nikiforuk explains the basics of his petrostate thesis and asks why Canada, unlike any other democratic nation, hasn’t had a meaningful public debate about the Alberta oilsands and how they’ve come to shape the Canadian landscape, physically as much as politically.
The southern portion of TransCanada’s Keystone XL pipeline officially opened on Wednesday, pumping oil from the distribution hub of Cushing, Okla., to refineries on the American Gulf Coast.
Calgary-based TransCanada announced the news on its website Wednesday. At about 10:45 a.m. central time, the Gulf Coast Project began delivering crude oil to the pipeline company’s refining customers.
“This is a very important milestone for TransCanada, our shippers and Gulf Coast refiners who have been waiting for a pipeline to supply oil directly from Cushing,” TransCanada CEO Russ Girling said.
The 783-kilometre stretch of pipeline in the American South cost $2.3 billion to develop and construct. The 36-inch pipeline that can transport as much as 830,000 barrels of oil per day.
The shorter leg will begin transporting on average about 300,000 barrels of oil daily and should end the year at an average of about 520,000 barrels, TransCanada’s Alex Pourbaix said.
TransCanada was trumpeting the opening of the pipeline as a watershed moment on Wednesday, but the company still faces numerous hurdles getting the rest of the Keystone XL pipeline approved.
The remaining portion of the pipeline is still seeking final approval from the U.S. government. When and if it’s completed, it will ship Canadian oil more than 1,800 kilometres from Hardisty, Alta., through six U.S. states to the Gulf of Mexico for refining and export.
Environmentalists have rallied against the project, urging U.S. President Barack Obama to stop its construction. But it’s backers say it will be an economic boom for both countries and reduce North America’s dependence on foreign oil from more hostile parts of the globe.
Jane Kleeb, of Bold Nebraska, a group that has opposed the Keystone pipeline, said the Gulf Coast segment presented a “huge risk” to people along the route noting problems flagged by the federal pipeline regulator during construction.
“Citizens are watching this pipeline like a hawk,” Kleeb vowed.
Oil prices rose
Oil prices were boosted by the opening of the southern leg of the Keystone pipeline.
Benchmark West Texas Intermediate crude for March delivery rose $1.76, or 1.9 per cent, to close at $96.73 US a barrel on the New York Mercantile Exchange. Oil last closed above $96 a barrel on Dec. 31.
Brent crude, used to set prices for international varieties of crude, gained $1.54, or 1.4 per cent, to US$108.27 on the ICE Futures exchange in London. Meanwhile, natural gas futures shot up almost six per cent as temperatures in many parts of the U.S. Northeast dropped well below freezing and strong demand tapped the region’s supplies of natural gas.
A coalition of environment groups has filed a lawsuit in Federal Court alleging serious flaws with the Joint Review Panel’s final report that recommended the pipeline be approved because “Canadians will be better off with this project than without it.”
The group is seeking a court order to prevent the federal cabinet from acting on the panel’s report to approve the proposed pipeline.
Ecojustice lawyers representing ForestEthics Advocacy, the Living Oceans Society and the Raincoast Conservation Foundation allege the Joint Review Panel’s 419-page report contains legal errors and that its approval is based on insufficient evidence.
“The JRP did not have enough evidence to support its conclusion that the Northern Gateway pipeline would not have significant adverse effects on certain aspects of the environment,” said Ecojustice staff lawyer Karen Campbell, in a statement released on Friday.
“The panel made its recommendation despite known gaps in the evidence, particularly missing information about the risk of geohazards along the pipeline route and what happens to diluted bitumen when it is spilled in the marine environment.”
Serious flaws alleged
In its lawsuit, the environmental coalition says the panel concluded that diluted bitumen is unlikely to sink in an ocean environment even though it says a federal study released earlier this week suggests otherwise.
- Northern Gateway pipeline recommended for approval with conditions
- Northern Gateway project: 6 things to know
- Northern Gateway pipeline by the numbers
The lawyers say the review panel did not consider the federal recovery strategy for Pacific humpback whales, whose critical habitat overlaps with the proposed tanker route, or identify mitigation measures for caribou populations.
The lawsuit also alleges the panel refused to consider the environmental impacts of upstream oilsands development and permits Enbridge to assess landslide risks during instead of before construction.
Ecojustice says the battle over Northern Gateway is about more than just one pipeline project. Campbell says it’s the epicentre of the debate over Canada’s energy future and Canada needs to get it right.
“There is simply too much at stake. Any decision about Northern Gateway must be based on the best available science. That’s why the panel’s incomplete and flawed report cannot stand as the final word on whether Northern Gateway is in the national interest,” says Campbell in the release.
A cabinet decision on whether to accept the panel’s recommendation and approve the pipeline is expected sometime in the next six months.
Under the new environmental assessment framework contained in the 2012 spring omnibus budget bill, cabinet has final decision-making power over Northern Gateway but is bound by the 209 conditions laid out in the Joint Review Panel report.
Nanos Number: pipeline politics 6:52
In an attempt to press the Obama administration on its own turf, Foreign Affairs Minister John Baird used the first day of a Washington visit to repeatedly call for a prompt decision on the Keystone XL pipeline.
He buttressed his case by making public appearances Wednesday with two pro-Keystone Democratic senators, who both expressed frustration with how long the administration has dragged out the decision.
Baird offered a snappy reply when asked if there’s anything pro-Keystone politicians on either side of the border could still say or do to influence a debate that has been going on for years.
“One politician — the president of the United States — can say yes to a great project to create jobs on both sides of the border, help with energy independence and energy security,” Baird replied, drawing a chuckle from the lawmaker next to him, Democratic Sen. Heidi Heitkamp of North Dakota.
“Decision time is upon us.”
He repeated the “decision time” phrase on three separate occasions at two public appearances Wednesday, making increasingly clear the Canadian government’s frustration over the prolonged approval process.
Baird held a half-dozen meetings on Capitol Hill and several other get-togethers throughout the day.
His two media appearances — both with pro-Keystone lawmakers from the president’s party — allowed them to air their own feelings.
— Sen. Heidi Heitkamp (@SenatorHeitkamp) January 15, 2014
“I will tell you the frustration that many of us have,” said Heitkamp.
“It has taken us longer to make a decision than it took us to defeat Hitler in the Second World War.”
‘Weeks’ until environmental review
Prime Minister Stephen Harper said Canada would not take “no for an answer” until the Alberta-to-Texas pipeline is approved, last fall in New York. More recently, he suggested the U.S. president had “punted” a politically uncomfortable dilemma by adding additional steps to the regulatory process.
When asked how soon he expected a decision, Baird said the ongoing environmental review by the State Department could be completed and released “in the coming weeks,” soon after this month’s state of the union address.
After that, he said, a decision could be announced quickly.
He delivered a similar message during a meeting with Louisiana’s Mary Landrieu, touted as the likely next chair of the Senate energy committee.
— Senator Landrieu (@SenLandrieu) January 15, 2014
With media invited into the meeting, she sympathetically placed a hand on Baird’s as she shared her regrets about how long the process had taken.
Landrieu, who faces a difficult re-election fight, said the project was popular in her state.
They used that public meeting to inform U.S. reporters that Canada has the same greenhouse-gas standards as the U.S., the same vehicle-emissions standards, and has done more to phase out coal.
Baird also met with U.S. Senator Bob Corker who posted a picture of his meeting with the foreign affairs minister after his approval of the controversial Keystone XL pipeline.
#KeystoneXL will create jobs, expand access to North American energy and strengthen ties with Canada, our largest trading partner. -BC
— Senator Bob Corker (@SenBobCorker) January 15, 2014
During his three-day trip, Baird also has meetings with Secretary of State John Kerry, National Security Advisor Susan Rice and several think-tanks.
He’s also scheduled to speak Thursday to business leaders.
The Canadian government says Young should remember that oil extraction drives economic growth [Reuters]
|Musician Neil Young kicked off his Honor the Treaties tour Sunday in Canada to raise money for a First Nations’ legal battle against a tar sands project activists say would violate treaty and constitutional rights of indigenous communities.
“We are killing these people,” Young told a crowd gathered at Toronto’s Massey Hall. “The blood of these people are on modern Canada’s hands.”
The tour began in Toronto, where Young spoke at a news conference along with Athabasca Chipewyan First Nation (ACFN) Chief Allen Adam and environmentalist David Suzuki before performing in front of a sold-out crowd.
The week-long tour will visit Winnipeg, Regina and Calgary. Proceeds from the shows will be donated to the legal-defense fund of the northern Alberta-based Athabasca tribal government challenging new tar sands projects.
During a news conference, Young, who visited a tar sands site near Fort McMurray, Alberta, called the industry “the greediest, most destructive and most disrespectful demonstration of something just run amok.” The rock legend said what he saw was a “devastating environmental catastrophe” that could only be compared to Hiroshima.
“We went to the homes of First Nations people and I met them,” Young told concert attendees at Massey Hall. “While I was there, I drove around the tar sands in my electric car and experienced this unbelievable smell and toxicity. My throat and eyes were burning, and this was about 25 miles away from the actual site at Fort (McMurray).”
‘Rigorous’ environmental laws
Calls by Al Jazeera to Alberta’s government representatives were not returned in time for publication. According to the Oil Sands Division of the Alberta Department of Energy website, the tar sands industry provides significant economic benefits to Albertans. The energy sector accounted for over 22 percent of Alberta’s GDP in 2012, according to the Alberta Department of Energy.
Alberta, furthermore, can expect $350bn in royalties and $122bn in total tax revenue from work at the tar sands over the next 25 years, according to the Canadian Energy Research Institute (CERI).
Development of tar sands involves the extraction of heavy crude oil called bitumen from underneath the wilderness. Critics have warned of potentially catastrophic environmental consequences.
Fort McMurray lies on the outskirts of Jackpine Mine, which was approved for expansion by the government in July, 2013. That order convinced the Athabasca they had no choice but to fight the move in court for violating treaty agreements, which prohibit any activity that interferes with Athabasca’s ability to survive by hunting, fishing and trapping on their territory.
Jason MacDonald, a spokesman for Prime Minister Stephen Harper, told CBC Canada Monday that the natural resource sector is a fundamental part of the country’s economy.
“Even the lifestyle of a rock star relies, to some degree, on the resources developed by thousands of hard-working Canadians,” MacDonald said in a statement. He added the government would “continue to ensure that Canada’s environmental laws and regulations are rigorous.”
Suzuki, who introduced Young in Toronto, said that the First Nation is simply asking the government to respect an agreement that it signed.
“These are some of the poorest people in Canada, and they’re telling us there’s more important things than money — like the air, the water and all the other living organisms on the planet,” Suzuki said.
‘David and Goliath’
The 1,200-member Athabasca tribe has asked Canada’s federal court to review Ottawa’s decision to allow the expansion, which would encroach on Athabasca land.
“It’s a David and Goliath story,” Eriel Deranger, communications coordinator for the Athabasca First Nation, told Al Jazeera. The expansion could also violate federal laws covering fisheries and species at risk, Deranger said.
Deranger, an Athabasca tribe member, said the Jackpine Mine expansion would contribute to cumulative impacts that would break the treaty. She added that the government knew that when it was approved.
“The decision released in July made major admissions,” she said. “The panel admitted that the project would have significant adverse effects on the environment and in some cases even cause irreversible damage.”
David Schindler, professor emeritus at the University of Alberta, testified at the Jackpine Mine hearings. He said the area had already seen severe environmental impacts by previous mines in the area.
“They’re talking about destroying 20 kilometers of the Athabasca River – that’s a fairly big body of water,” Schindler told Al Jazeera. “There are about 10,000 or more fish that go up and down that river, and it’s being treated as if it was a sewer.”
Deranger said the project would impact species like wood bison, caribou and other at-risk species as well as fisheries and waterways – with no proven method of reclamation afterward.
Schindler, a member of the US National Academy of Sciences, said no real assessment process can be done by “a few government appointees known to favor the oil and gas industry.”
He said his 2008 study on the environmental impact of industry pollutants was at first discounted by the government, but was later confirmed by their own studies. In the end, tougher monitoring standards were recommended, but Schindler said the monitoring program is still controlled by the government.
“There has never been a mine turned down, despite thousands of pages of risks being presented to these panels,” Schindler said. “It makes you feel creepy having your government make a treaty and then violate it at every turn.”
The Athabasca First Nation says Shell, which operates the Jackpine Mine, breached its duties to “meaningfully consult” with the tribal council – a First Nation right across Canada in cases where energy industry activities could impact their territory.
A spokesman from Shell Canada told CBC Canada that company staff and senior leaders meet regularly to deal with aboriginal communities to discuss projects, training, business opportunities and cultural activities.
However, Deranger contested the seriousness of those meetings.
“We found our concerns are largely unaddressed … our rights left at the wayside in the development of these projects are either negated or ignored,” she said.
TORONTO – Canadian rock icon Neil Young launched a blistering attack on the Harper government and Alberta’s oilsands at a news conference on Sunday, saying that he was “shattered” after visiting a Fort McMurray industrial site he compared to the atomic bomb-devastated wreckage of Hiroshima, Japan.
Joined on the Massey Hall stage by representatives from the Athabasca Chipewyan First Nation, Young was especially scathing in his criticism of Prime Minister Stephen Harper’s “hypocritical” administration, which Young said was ignoring science to irresponsibly drive corporate profits.
“Canada is trading integrity for money,” said the environmentally engaged 68-year-old rocker. “That’s what’s happening under the current leadership in Canada, which is a very poor imitation of the George Bush administration in the United States and is lagging behind on the world stage. It’s an embarrassment to any Canadians.”
“I want my grandchildren to grow up and look up and see a blue sky and have dreams that their grandchildren are going to do great things,” he added later. “And I don’t see that today in Canada. I see a government just completely out of control.
“Money is number one. Integrity isn’t even on the map.”
Young was speaking hours before he was set to take the same stage for a concert, the proceeds of which were to be directed to the Athabasca Chipeyan First Nation Legal Fund. The tour, which also features Canuck jazz chanteuse Diana Krall, was set to roll through Winnipeg and Regina before wrapping in Calgary on Jan. 19.
The stage was already dressed for Young’s show: a colourfully paint-smeared piano, a half-dozen guitars arranged in a circle, a majestic organ, a wooden First Nations figure and, behind it all as a massive backdrop, a red banner reading “Honor the Treaties.”
The Athabasca Chipewyan First Nation represents a community living roughly 200 kilometres downstream of current oilsands development. The group is embroiled in a legal battle to protect their traditional territory from further industrialization.
Young, who was born in Toronto before launching his storied music career in Winnipeg, was ferocious in his condemnation of what he sees as a violation of treaty rights.
“The name Canada’s based on a First Nations word. The word Ottawa’s based on a First Nations word, Ontario’s based on a First Nations word, Manitoba, Saskatchewan, Quebec — these are all First Nations word. This is where Canada came from,” said Young.
“We made a deal with these people. We are breaking our promise. We are killing these people. The blood of these people will be on modern Canada’s hands.”
Young said that “a while ago” he decided to drive his electric car from San Francisco to northern Alberta. Along the way, he stopped to meet Athabasca Chipewyan First Nation Chief Allan Adam — who sat next to Young onstage on Sunday — and visit others in the community.
It was on this trip that Young also decided to see the oilsands first-hand. The visit certainly left a mark.
“(I) drove around the tarsands in my electric car viewing and experiencing this unbelievable smell and toxicity in my throat — my eyes were burning,” he recalled. “That started 25 miles away from the tarsands. When I was in Fort Mac, it got more intense. My son, who has cerebral palsy, has lung damage, (so) he was wearing a mask to keep the toxic things in the air out of his lungs and make it easy for him to have lungs after he left.”
They soon came upon a “huge industrial site.”
“It looked very big and very impressive. Extremely well-organized. A lot of people were working — hard-working people, who I respect,” Young remembered. “That was one of 50 sites. The one we saw was the cleanest one. It’s the best-looking one. It’s the poster child.
“And it’s one of the ugliest things I’ve ever seen.”
During the week’s concerts, Young said he planned on screening the 12-minute Greenpeace film “Petropolis,” which he said was “probably the most devastating thing you will ever see.”
“It’s the greediest, most destructive and disrespectful demonstration of just something run amok that you could ever see,” he said. “There’s no way to describe it, so I described it as Hiroshima, which was basically pretty mellow compared to what’s going on out there.
“I still stand by what I said about Fort Mac and the way it looks. Not because the houses in Fort Mac look like Hiroshima, but because Fort Mac stands for 50 sites, the name Fort Mac stands for diseases that these First Nations people are getting, pollution, everything that’s happening there.”
He soon segued into another attack on the Harper government.
“This oil is all going to China. It’s not for Canada, it’s not for the United States, it’s not ours. It belongs to the oil companies. And Canada’s government is making this happen. It’s truly a disaster to anyone with an environmental conscience.”
Jason MacDonald, a spokesman for Harper, countered that “projects are approved only when they are deemed safe for Canadians and (the) environment” and stressing that the resource sector creates “economic opportunities” and “high-wage jobs” for thousands of Canadians.
“Canada’s natural resources sector is and has always been a fundamental part of our country’s economy,” MacDonald wrote in an email to The Canadian Press.
“Even the lifestyle of a rock star relies, to some degree, on the resources developed by thousands of hard-working Canadians every day. Our government recognizes the importance of developing resources responsibly and sustainably and we will continue to ensure that Canada’s environmental laws and regluations are rigorous. We will ensure that companies abide by conditions set by independent, scientific and expert panels.”
At one point during the hour-plus media session, Young was asked what he would say if granted a private consultation with Harper. Initially he demurred, muttering that the query “blew (his) mind.”
Later, however, he said he’d be open to such a meeting.
“I don’t think I’m going to get to see him anyway, but if he does want to see me, I’m ready to go see him. I would welcome the opportunity,” said Young, noting that he invited government representatives to attend the news conference and provide their side of the story, but the invitations were declined.
Environmental activist David Suzuki, who moderated the session, pointed out that he had personally tried to meet with Harper three times but had been rebuffed on all occasions.
“Well, you got a bad reputation,” Young replied with a smirk.
Young has been politically active on other matters recently as well. On his website, he’s posted messages questioning the pollution level in Shanghai and shaming Harper for competing “with Australia’s pro-coal government for the worst climate record in the industrialized world.”
The restlessly prolific guitar wizard hasn’t released new music since issuing “Americana” and “Psychedelic Pill” within a few months of each other in 2012. In 2009, he released an album about fossil fuels called “Fork in the Road.” He was asked Sunday whether this new campaign might similarly inspire new music.
“I don’t plan it. If I write something, it’ll come to me,” said Young, clad in a tassled light brown jacket, his face shaded by a black hat. “I think it will happen, but I don’t know.”
Long Live Peak Oil!
Among the big energy stories of 2013, “peak oil” — the once-popular notion that worldwide oil production would soon reach a maximum level and begin an irreversible decline — was thoroughly discredited. The explosive development of shale oil and other unconventional fuels in the United States helped put it in its grave.
As the year went on, the eulogies came in fast and furious. “Today, it is probably safe to say we have slayed ‘peak oil’ once and for all, thanks to the combination of new shale oil and gas production techniques,” declared Rob Wile, an energy and economics reporter for Business Insider. Similar comments from energy experts were commonplace, prompting an R.I.P. headline at Time.com announcing, “Peak Oil is Dead.”
Not so fast, though. The present round of eulogies brings to mind the Mark Twain’s famous line: “The reports of my death have been greatly exaggerated.” Before obits for peak oil theory pile up too high, let’s take a careful look at these assertions. Fortunately, theInternational Energy Agency (IEA), the Paris-based research arm of the major industrialized powers, recently did just that — and the results were unexpected. While not exactly reinstalling peak oil on its throne, it did make clear that much of the talk of a perpetual gusher of American shale oil is greatly exaggerated. The exploitation of those shale reserves may delay the onset of peak oil for a year or so, the agency’s experts noted, but the long-term picture “has not changed much with the arrival of [shale oil].”
The IEA’s take on this subject is especially noteworthy because its assertion only a year earlier that the U.S. would overtake Saudi Arabia as the world’s number one oil producer sparked the “peak oil is dead” deluge in the first place. Writing in the 2012 edition of itsWorld Energy Outlook, the agency claimed not only that “the United States is projected to become the largest global oil producer” by around 2020, but also that with U.S. shale production and Canadian tar sands coming online, “North America becomes a net oil exporter around 2030.”
That November 2012 report highlighted the use of advanced production technologies — notably horizontal drilling and hydraulic fracturing (“fracking”) — to extract oil and natural gas from once inaccessible rock, especially shale. It also covered the accelerating exploitation of Canada’s bitumen (tar sands or oil sands), another resource previously considered too forbidding to be economical to develop. With the output of these and other“unconventional” fuels set to explode in the years ahead, the report then suggested, the long awaited peak of world oil production could be pushed far into the future.
The release of the 2012 edition of World Energy Outlook triggered a global frenzy of speculative reporting, much of it announcing a new era of American energy abundance. “Saudi America” was the headline over one such hosanna in the Wall Street Journal. Citing the new IEA study, that paper heralded a coming “U.S. energy boom” driven by “technological innovation and risk-taking funded by private capital.” From then on, American energy analysts spoke rapturously of the capabilities of a set of new extractive technologies, especially fracking, to unlock oil and natural gas from hitherto inaccessible shale formations. “This is a real energy revolution,” the Journal crowed.
But that was then. The most recent edition of World Energy Outlook, published this past November, was a lot more circumspect. Yes, shale oil, tar sands, and other unconventional fuels will add to global supplies in the years ahead, and, yes, technology will help prolong the life of petroleum. Nonetheless, it’s easy to forget that we are also witnessing the wholesale depletion of the world’s existing oil fields and so all these increases in shale output must be balanced against declines in conventional production. Under ideal circumstances — high levels of investment, continuing technological progress, adequate demand and prices — it might be possible to avert an imminent peak in worldwide production, but as the latest IEA report makes clear, there is no guarantee whatsoever that this will occur.
Inching Toward the Peak
Before plunging deeper into the IEA’s assessment, let’s take a quick look at peak oil theory itself.
As developed in the 1950s by petroleum geologist M. King Hubbert, peak oil theory holdsthat any individual oil field (or oil-producing country) will experience a high rate of production growth during initial development, when drills are first inserted into a oil-bearing reservoir. Later, growth will slow, as the most readily accessible resources have been drained and a greater reliance has to be placed on less productive deposits. At this point — usually when about half the resources in the reservoir (or country) have been extracted — daily output reaches a maximum, or “peak,” level and then begins to subside. Of course, the field or fields will continue to produce even after peaking, but ever more effort and expense will be required to extract what remains. Eventually, the cost of production will exceed the proceeds from sales, and extraction will be terminated.
For Hubbert and his followers, the rise and decline of oil fields is an inevitable consequence of natural forces: oil exists in pressurized underground reservoirs and so will be forced up to the surface when a drill is inserted into the ground. However, once a significant share of the resources in that reservoir has been extracted, the field’s pressure will drop and artificial means — water, gas, or chemical insertion — will be needed to restore pressure and sustain production. Sooner or later, such means become prohibitively expensive.
Peak oil theory also holds that what is true of an individual field or set of fields is true of the world as a whole. Until about 2005, it did indeed appear that the globe was edging ever closer to a peak in daily oil output, as Hubbert’s followers had long predicted. (He died in 1989.) Several recent developments have, however, raised questions about the accuracy of the theory. In particular, major private oil companies have taken to employing advanced technologies to increase the output of the reservoirs under their control, extending the lifetime of existing fields through the use of what’s called “enhanced oil recovery,” or EOR. They’ve also used new methods to exploit fields once considered inaccessible in places like the Arctic and deep oceanic waters, thereby opening up the possibility of a most un-Hubbertian future.
In developing these new technologies, the privately owned “international oil companies” (IOCs) were seeking to overcome their principal handicap: most of the world’s “easy oil” — the stuff Hubbert focused on that comes gushing out of the ground whenever a drill is inserted — has already been consumed or is controlled by state-owned “national oil companies” (NOCs), including Saudi Aramco, the National Iranian Oil Company, and the Kuwait National Petroleum Company, among others. According to the IEA, such state companies control about 80 percent of the world’s known petroleum reserves, leaving relatively little for the IOCs to exploit.
To increase output from the limited reserves still under their control — mostly located in North America, the Arctic, and adjacent waters — the private firms have been working hard to develop techniques to exploit “tough oil.” In this, they have largely succeeded: they are now bringing new petroleum streams into the marketplace and, in doing so, have shaken the foundations of peak oil theory.
Those who say that “peak oil is dead” cite just this combination of factors. By extending the lifetime of existing fields through EOR and adding entire new sources of oil, the global supply can be expanded indefinitely. As a result, they claim, the world possesses a “relatively boundless supply” of oil (and natural gas). This, for instance, was the way Barry Smitherman of the Texas Railroad Commission (which regulates that state’s oil industry)described the global situation at a recent meeting of the Society of Exploration Geophysicists.
In place of peak oil, then, we have a new theory that as yet has no name but might be called techno-dynamism. There is, this theory holds, no physical limit to the global supply of oil so long as the energy industry is prepared to, and allowed to, apply its technological wizardry to the task of finding and producing more of it. Daniel Yergin, author of the industry classics, The Prize and The Quest, is a key proponent of this theory. He recently summed upthe situation this way: “Advances in technology take resources that were not physically accessible and turn them into recoverable reserves.” As a result, he added, “estimates of the total global stock of oil keep growing.”
From this perspective, the world supply of petroleum is essentially boundless. In addition to “conventional” oil — the sort that comes gushing out of the ground — the IEA identifies six other potential streams of petroleum liquids: natural gas liquids; tar sands and extra-heavy oil; kerogen oil (petroleum solids derived from shale that must be melted to become usable); shale oil; coal-to-liquids (CTL); and gas-to-liquids (GTL). Together, these “unconventional” streams could theoretically add several trillion barrels of potentially recoverable petroleum to the global supply, conceivably extending the Oil Age hundreds of years into the future (and in the process, via climate change, turning the planet into an uninhabitable desert).
But just as peak oil had serious limitations, so, too, does techno-dynamism. At its core is a belief that rising world oil demand will continue to drive the increasingly costly investments in new technologies required to exploit the remaining hard-to-get petroleum resources. As suggested in the 2013 edition of the IEA’s World Energy Outlook, however, this belief should be treated with considerable skepticism.
Among the principal challenges to the theory are these:
1. Increasing Technology Costs: While the costs of developing a resource normally decline over time as industry gains experience with the technologies involved, Hubbert’s law of depletion doesn’t go away. In other words, oil firms invariably develop the easiest “tough oil” resources first, leaving the toughest (and most costly) for later. For example, the exploitation of Canada’s tar sands began with the strip-mining of deposits close to the surface. Because those are becoming exhausted, however, energy firms are now going after deep-underground reserves using far costlier technologies. Likewise, many of the most abundant shale oil deposits in North Dakota have now been depleted, requiring anincreasing pace of drilling to maintain production levels. As a result, the IEA reports, the cost of developing new petroleum resources will continually increase: up to $80 per barrel for oil obtained using advanced EOR techniques, $90 per barrel for tar sands and extra-heavy oil, $100 or more for kerogen and Arctic oil, and $110 for CTL and GTL. The market may not, however, be able to sustain levels this high, putting such investments in doubt.
2. Growing Political and Environmental Risk: By definition, tough oil reserves are located in problematic areas. For example, an estimated 13 percent of the world’s undiscovered oil lies in the Arctic, along with 30 percent of its untapped natural gas. The environmental risks associated with their exploitation under the worst of weather conditions imaginable will quickly become more evident — and so, faced with the rising potential for catastrophic spills in a melting Arctic, expect a commensurate increase in political opposition to such drilling. In fact, a recent increase has sparked protests in both Alaska and Russia, including the much-publicized September 2013 attempt by activists from Greenpeace toscale a Russian offshore oil platform — an action that led to their seizure and arrest by Russian commandos. Similarly, expanded fracking operations have provoked a steady increase in anti-fracking activism. In response to such protests and other factors, oil firms are being forced to adopt increasingly stringent environmental protections, pumping up the cost of production further.
3. Climate-Related Demand Reduction: The techno-optimist outlook assumes that oil demand will keep rising, prompting investors to provide the added funds needed to develop the technologies required. However, as the effects of rampant climate change accelerate, more and more polities are likely to try to impose curbs of one sort or another on oil consumption, suppressing demand — and so discouraging investment. This is already happening in the United States, where mandated increases in vehicle fuel-efficiency standards are expected to significantly reduce oil consumption. Future “demand destruction” of this sort is bound to impose a downward pressure on oil prices, diminishing the inclination of investors to finance costly new development projects.
Combine these three factors, and it is possible to conceive of a “technology peak” not unlike the peak in oil output originally envisioned by M. King Hubbert. Such a techno-peak is likely to occur when the “easy” sources of “tough” oil have been depleted, opponents of fracking and other objectionable forms of production have imposed strict (and costly) environmental regulations on drilling operations, and global demand has dropped below a level sufficient to justify investment in costly extractive operations. At that point, global oil production will decline even if supplies are “boundless” and technology is still capable of unlocking more oil every year.
Peak Oil Reconsidered
Peak oil theory, as originally conceived by Hubbert and his followers, was largely governed by natural forces. As we have seen, however, these can be overpowered by the application of increasingly sophisticated technology. Reservoirs of energy once considered inaccessible can be brought into production, and others once deemed exhausted can be returned to production; rather than being finite, the world’s petroleum base now appears virtually inexhaustible.
Does this mean that global oil output will continue rising, year after year, without ever reaching a peak? That appears unlikely. What seems far more probable is that we will see a slow tapering of output over the next decade or two as costs of production rise and climate change — along with opposition to the path chosen by the energy giants — gains momentum. Eventually, the forces tending to reduce supply will overpower those favoring higher output, and a peak in production will indeed result, even if not due to natural forces alone.
Such an outcome is, in fact, envisioned in one of three possible energy scenarios the IEA’s mainstream experts lay out in the latest edition of World Energy Outlook. The first assumes no change in government policies over the next 25 years and sees world oil supply rising from 87 to 110 million barrels per day by 2035; the second assumes some effort to curb carbon emissions and so projects output reaching “only” 101 million barrels per day by the end of the survey period.
It’s the third trajectory, the “450 Scenario,” that should raise eyebrows. It assumes that momentum develops for a global drive to keep greenhouse gas emissions below 450 parts per million — the maximum level at which it might be possible to prevent global average temperatures from rising above 2 degrees Celsius (and so cause catastrophic climate effects). As a result, it foresees a peak in global oil output occurring around 2020 at about 91 million barrels per day, with a decline to 78 million barrels by 2035.
It would be premature to suggest that the “450 Scenario” will be the immediate roadmap for humanity, since it’s clear enough that, for the moment, we are on a highway to hell that combines the IEA’s first two scenarios. Bear in mind, moreover, that many scientists believea global temperature increase of even 2 degrees Celsius would be enough to produce catastrophic climate effects. But as the effects of climate change become more pronounced in our lives, count on one thing: the clamor for government action will grow more intense, and so eventually we’re likely to see some variation of the 450 Scenario take shape. In the process, the world’s demand for oil will be sharply constricted, eliminating the incentive to invest in costly new production schemes.
The bottom line: Global peak oil remains in our future, even if not purely for the reasons given by Hubbert and his followers. With the gradual disappearance of “easy” oil, the major private firms are being forced to exploit increasingly tough, hard-to-reach reserves, thereby driving up the cost of production and potentially discouraging new investment at a time when climate change and environmental activism are on the rise.
Peak oil is dead! Long live peak oil!
Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation.
Canada’s pipeline projects have been the focus of a series of mass demonstrations [Reuters]
|Two decades ago, deep within British Columbia’s coastal old-growth forests, a fierce battle was waged and won to preserve Clayoquot Sound from large-scale clearcutting.
The legendary clash between environmentalists and industry in Canada’s westernmost province sparked a new kind of eco-activism – and the biggest fight since is poised to play out in the months ahead, as the country moves closer towards approving a controversial oil pipeline to the Pacific coast.
Last month, project proponent Enbridge Inc received a substantial boost through a federally commissioned report, which recommended approval of the Northern Gateway pipeline – subject to a host of environmental and administrative conditions. Advocates say the pipeline, which would whisk more than 500,000 barrels of oil daily from the Albertan tar sands to supertankers in Kitimat, BC, would benefit the country by opening Canada’s oil industry to growing Asian and Pacific Rim markets. But environmental and aboriginal groups, whose lands the pipeline would cross, maintain it would threaten some of the country’s most precious natural resources.
While the federal Conservatives – who have vowed no project will be approved unless it is “safe for Canadians and safe for the environment” – have until July to consider the report and come to a final decision, it is widely expected the government will green-light the Northern Gateway. And once that happens, Chief Martin Louie of the Nadleh Whut’en First Nation says aboriginal groups will swiftly launch court action.
“That’s the only avenue that we have to try to protect our rights,” Louie told Al Jazeera, speaking on behalf of a group of aboriginal bands known as the Yinka Dene Alliance, who have banned Enbridge’s pipeline from their territories under indigenous law. “Beautiful British Columbia – that’s what it should be for our kids too. The way I grew up enjoying the land and everything, I want my children and grandchildren to do too.”
Stamp of approval
The Northern Gateway twin pipeline would stretch 1,177km between Bruderheim in northern Alberta and the deep-water port of Kitimat, BC. The westward line would have the capacity to transport 525,000 barrels per day of oil for export, while the eastward line would carry up to 193,000 barrels per day of condensate, a product used to thin oil for pipeline transport.
The $8bn project has been years in the making; in 2009, Enbridge announced it was seeking regulatory approval, setting off a public and governmental review process that will culminate with this summer’s final decision.
A major part of that process was the independent joint review panel, mandated by the Environment Ministry and the National Energy Board, which delivered its final report last month.
Tasked with assessing the environmental, social and economic impacts of the pipeline, along with the effects of tanker traffic within Canadian territorial waters, the panel ultimately recommended approval of the project subject to 209 separate conditions. “We have concluded that the project would be in the public interest,” the panel noted in its final report. “We find that the project’s potential benefits for Canada and Canadians outweigh the potential burdens and risks.”
Enbridge has said it will work to meet all of the panel’s 209 conditions – which range from developing a marine mammal protection plan to researching the behaviour and cleanup of heavy oils – along with a broader set of five criteria, including addressing aboriginal land rights, for heavy oil pipeline development set out by the BC government.
“We remain hopeful that we can work to address all concerns that our opponents have in a mutual spirit of cooperation and collaboration,” Enbridge spokesperson Ivan Giesbrecht told Al Jazeera, calling the December report “just one important step in a long process”.
The company contends the Northern Gateway will deliver more than $270bn in GDP to Canada over 30 years, along with $300m in employment and contracts for aboriginal communities and billions more in tax revenue and labour-related income during construction. Enbridge and other advocates, including the Alberta government, have described the pipeline as key to diversifying Canadian crude oil exports to markets beyond the United States.
“Access to ocean ports for Alberta’s abundant resources is important to not just Alberta’s but Canada’s economic future,” Alberta Energy Minister Diana McQueen said, noting resource developers get a lower price in the North American market than they could globally. The situation is compounded by the stalled Canada-US Keystone XL pipeline proposal, which has been awaiting US government approval amid years of debate over its route and environmental impacts.
Opponents, meanwhile, question Enbridge’s employment numbers and suggest the pipeline’s economic benefits have been overstated. The Northern Gateway has generated a wall of opposition from aboriginals and environmental activists who cite the risk of an Exxon-Valdez-level oil spill in BC’s pristine coastal waters. Dozens of aboriginal bands have signed a declaration against the project, pledging to refuse Enbridge access to their lands and watersheds, including the salmon-stocked Fraser River.
In addition to the risk of spillage from the pipeline itself, Greenpeace Canada – which has criticised Enbridge’s history of spills and leaks – points out that the oil-loaded, Asia-bound supertankers would have to navigate “one of the trickiest marine routes in Canada”, passing by a series of small islands in the Douglas Channel. More than a year ago, Enbridge came under fire for releasing promotional materials in which the islands had apparently been erased from a rendering of the channel, in what critics called an effort to downplay the risks.
“Enbridge’s Northern Gateway pipeline would stream the world’s dirtiest oil from northern Alberta to the BC coast and would be the catalyst for unbridled exploitation and potentially calamitous disturbance of our land, air, freshwater and marine environment,” said Chris Genovali, executive director of the Raincoast Conservation Foundation in Sidney, BC. Industrial activities accompanying the transportation of oil could destroy habitats for caribou, wolves, whales and wild salmon, he added.
Opposition House Leader Nathan Cullen, the federal New Democratic MP for BC’s Skeena-Bulkley Valley, believes a major spill from either the pipeline or tankers over the 50-plus-year lifespan of the project is a certainty. “The ability to clean up bitumen in the water is virtually nil,” Cullen told Al Jazeera.
The Northern Gateway proposal faces an additional hurdle from BC’s provincial government, which has refused to lend support to the pipeline until Enbridge proves it will employ “world-leading practices” on oil-spill prevention and response, respect aboriginal rights and ensure the province gets a fair slice of the economic pie. “Enbridge hasn’t met any of the conditions yet,” government spokesperson Sam Oliphant said.
Legal fight ahead
Enbridge points out that it has already incorporated input from British Columbians and aboriginal communities, resulting in almost two dozen changes to the pipeline route and other alterations, such as thicker-walled pipes and an increased capability to respond to marine spills. In addition, the federal panel found Enbridge had taken steps to minimise the chances of a large spill “through its precautionary design approach and its commitments to use innovative and redundant safety systems”.
None of this is enough for the project’s opponents, who maintain the Northern Gateway will be a pivotal issue in the 2015 federal election – and set the stage for a landmark court fight.
The expected avalanche of legal cases upon the pipeline’s approval will tie it up for years, said Keith Stewart, climate and energy coordinator for Greenpeace Canada. And if the government tries to proceed regardless, he said, thousands of people have pledged to engage in peaceful civil disobedience, just as protesters did decades ago in Clayoquot Sound – using blockades and peaceful demonstrations to achieve their environmental goals.
The question of land ownership, meanwhile, is a complex one. Aboriginal rights are protected under section 35 of Canada’s constitution, but proving aboriginal title requires proof of use and occupation, said lawyer Drew Mildon, who works for a BC-based firm planning to represent aboriginals in the anticipated Northern Gateway court battle. While many aboriginal groups living along the pipeline route assert title and rights, they have not yet gone to court to prove them, Mildon told Al Jazeera.
“I have no doubt the governments will try to ram through the pipeline regardless of First Nations objections,” he said. “As a lawyer working for First Nations in BC, and given the overwhelming First Nations and public opposition here, I believe the pipeline will likely never happen.”
Stewart agreed, citing a failure on the part of Enbridge and the federal government to shore up public support for the pipeline.
“Without that support,” he said, “it won’t be built.”
Lawsuit filed against Canadian government over endangered wildlife and Northern Gateway : thegreenpages.ca
Vancouver — Environmental groups are taking the federal government to court over its continued failure to meet its legal responsibilities under the Species at Risk Act.
The groups argue that a number of industrial projects, including the proposed Northern Gateway pipeline and tanker route, are putting threatened and endangered wildlife at risk. The case will be heard by the Federal Court in Vancouver January 8 and 9.
“The federal government’s chronic delays in producing recovery strategies for Canada’s endangered wildlife are forcing species already struggling to survive to wait even longer for the protection they desperately need,” said Devon Page, Ecojustice executive director. “Worse, not having these recovery strategies in place makes it impossible for regulators to consider the full environmental impact of major projects like the Northern Gateway pipeline.”
The lawsuit challenges the federal government’s multi-year delays in producing recovery strategies for four species: the Pacific Humpback Whale, Nechako White Sturgeon, Marbled Murrelet and Southern Mountain Caribou. The habitat for all four species would be impacted by the construction and operation of the Northern Gateway pipeline, among other proposed developments.
By delaying the recovery strategies, and therefore delaying identification of the critical habitat it must then protect, the federal government is making it easier for projects like Northern Gateway pipeline to speed through regulatory review without a full understanding of their long-term impacts on these wildlife species and their habitat.
The government delayed its final recovery strategy for the Pacific Humpback Whale until this past October, more than four and a half years past its due date, and far too late to be considered by the Joint Review Panel (JRP), which recommended in December that Cabinet approve Northern Gateway.
That recovery strategy identifies toxic spills and vessel traffic as two threats to the humpbacks’ survival and recovery. The recovery strategy also shows how the whales’ critical habitat overlaps significantly with the proposed tanker route for the Northern Gateway pipeline — all pertinent information that should have been considered during the review hearings.
“This recovery strategy clearly demonstrates that Northern Gateway would have a significant impact on humpback whales and their habitat, yet by the time this science was released it was too late for it to be considered by the JRP, which calls into question the credibility of the review process,” said Caitlyn Vernon, campaigns director with Sierra Club BC.
More than 160 other at-risk species — including the Southern Mountain Caribou, another species that will be impacted by Northern Gateway — still await the release of their recovery strategies.