It's no wonder Stephen Harper can't say "Kyoto" without choking. After all, thanks to the huge oil sands deposit in his Alberta backyard, we've got the second-largest oil reserves in the entire world, next to Saudi Arabia.
You probably already know that the sticky goo in northeastern Alberta is the fastest-growing source of greenhouse gas emissions in the country. But while we're all worrying ourselves sick about leaf blowers and incandescent bulbs, few realize the extent of the oil sands expansion being plotted. Do voters get that the Conservatives are expecting, and indeed pumping, a massive fivefold increase?
Welcome to the difference between official Harperspeak about going green and Tory tar sands machinations. And the politics are especially thick and sticky when Washington is factored in, since no matter who we elect, stopping any further development of our bituminous riches, or even slowing it down, is going to take a heroic rewiring of the Canada/U.S. power dynamic.
Let's backtrack to a meeting in Houston on January 24, the day after the 2006 federal election that put Harper in the driver's seat. There, reps from the then-Liberal government and officials from the U.S. government agreed on two priorities: rapidly increasing oil sands production fivefold and streamlining the regulatory process.
The story, reported by award-winning CBC journalist Guy Gendron, sent a ripple through the PMO's office, which lodged several complaints with Radio Canada's ombudsman along the lines that the confab was not secret and in any case shouldn't be pinned on the new government.
"The Conservatives were able to cast a shadow over it," says Gendron. "But anyone who has seen what [northern Alberta] looks like now would have a hard time imagining what 5 million barrels a day would mean up there."
The fact is, with energy security topping the Bush agenda, unstable oil supplies in the Middle East and troublemaker Hugo Chavez ensconced in Venezuela, the U.S. government is looking hungrily to its north.
And despite Tory protests at the time, the Houston recommendations (NOW has seen the minutes) seem totally simpatico with the current Harper trajectory. A January 2007 speech by Finance Minister Jim Flaherty in Beijing boasted that production in Alberta was on its way to 4.6 million barrels a day by 2015.
Few in the industry admit to such a high target, since the current level is 1 million barrels a day. "It is technically possible to do 5 million," says Pierre Alvarez, president of the Canadian Association of Petroleum Producers. "But 3 million looks more feasible."
However, it's a secret that seems hard to keep. Six months after the Houston meeting, in his first speech abroad, Harper called Canada "a new energy superpower.'
Flaherty's recent budget prepared the ground for rapid expansion of the tar sands by creating a new office of projects management whose mandate is to cut in half the approvals time for major resource projects - exactly what was called for at the Houston meeting. "Two plus two seems to equal four here, but the media missed it," says Dan Woynillowicz, senior policy analyst at Alberta-based enviro org the Pembina Institute and author of Oil Sands Fever.
"It is clear Harper has major plans to increase production."
But just how much legal room do we have to set limits on the mushrooming oil sands anyway? The fact is, NAFTA requires us to continue supplying oil to the U.S. at the present rate. (Canada exports 65 per cent of our oil to the U.S.) Mexico, on the contrary, whose oil industry is nationalized, refused to sign on to NAFTA's proportionality clause.
"It's unfortunate and the result of unnecessary concessions on the part of the Canadian government," says Michael Byers, a global politics prof at the University of British Columbia. "The U.S. doesn't really regard Canadian oil as a foreign source."
But the feds look like geniuses next to Ralph Klein's wrecking crew in Alberta. That province takes but 1 per cent of gross revenues on oil sands projects until oil firms recover all their costs. Only then does the rate increase to 25 per cent of net profits. Sure, it's boom time up in Fort McMurray. But according to economist Amy Taylor, also of the Pembina Institute, if it weren't for the skyrocketing price of natural gas, Alberta would be in the red rather than swimming in black.
"Alberta has been very lucky," she says. "But if the oil sands are going to make up a larger piece of the energy mix, it could become very problematic." That's because the deal with the companies was struck in the mid-90s, when oil was trading at about $20 a barrel (it's now over $60), a fact that encourages companies to continue expanding in order to delay paying the higher royalty rate.
"We need to revisit the royalty scheme now," Taylor says. "But it is possible that if full-cost accounting, including environmental costs, were used, [tar sands development] would not make a lot of economic sense."
To produce a barrel of oil from the oil sands requires two to five barrels of clean water and enough natural gas to heat a house for between one and five days. When processed into gasoline, it makes enough to fill three-quarters of an SUV tank. Not only are most of the profits and the oil going out of the country (many of the firms are U.S.-owned), but the process of extracting oil from the tar sands helps exhaust rapidly decreasing stores of natural gas, drain the pristine waters of the Athabasca River and drive up Canada's greenhouse gas emissions.
Oil companies are looking at alternatives to natural gas, among them, you guessed it, coal and nuclear power.
"We've got a crisis now," says Byers. "Governments need to establish an industry-wide cap on CO2 emissions, allowing companies that come in under it to sell that credit to someone else."
This option is favoured by both the Liberals and the NDP, though the NDP goes further than the Libs by calling for a moratorium on new development. The Tories, on the other hand, cling to a flawed idea of intensity targets, which, if the tar sands expand, would see a corresponding expansion of emissions.
"This is going to take political courage," says Byers. "The U.S. will huff and puff, but as long we act incrementally and companies are still making money, the U.S. government won't have much to say."