The Tyranny Of Our Ever More Costly Oil Addiction

By Mark Taliano

 “The price of oil and quality of freedom”, writes New York Times columnist Thomas Freidman, “invariably travel in opposite directions. As the price of oil climbs higher in an oil-dominated country, poor or rich, secular of Muslim, the country’s citizens will, over time, experience less free speech, declining freedom of the press, and a steady erosion of the rule of law.  Neither Texans nor Canadians are exempt …. It is the ‘axiom of our age’.”

On this count, Thomas Freidman couldn’t be more correct.  Prime Minister Harper’s assaults on Canadian freedoms have been devastating. His assaults on free speech started quietly, first by muzzling, and then by firing federal scientists.

 Apparently, that wasn’t enough though, so he put the world renown Environmental Lakes Area, a base for 745 peer-reviewed scientific articles, on the chopping block.

If the source of scientific information is eliminated, Harper must reason, then scientific data used by Non-Governmental Organizations NGOs) would be less available.

But he hasn’t stopped there. Specific NGOs are being targeted by CRA in an attempt to stifle the message further. David Suzuki has chosen to separate himself from the David Suzuki Foundation in an effort to free himself from this government harassment.

Repressive omnibus legislation (Bill C-38) was designed to quickly pass anti-environmental laws before anyone noticed.  Even Conservative  MP’s were likely unaware of the contents or ramifications of the bill., and such is the intent of a 421 page bill.

 It’s bad enough that corporate news conglomerates negatively impact information freedom:  For example, rarely is the term “neo-liberalism” used in corporate media streams, nor is the phrase “human-caused global warming” used by weather reporters etc.  Now, even Conservative backbenchers find they must either censor themselves or face the consequences.

 It’s no surprise then that Canada’s Freedom Of Information rating is now at 51 … below Angola and Colombia .

Andrew Nikiforuk, author of Tar Sands Dirty Oil And The Future Of A Continent,    explains the nature of the tar sands industry and, therefore, a likely reason for Canada’s new repressive character.

 The physical characteristics of the industry look something like this.  First, the resource is not oil. It does not flow of its own accord.  It much more approximates a  thick, black sand.  Transforming this “bitumen” to oil is extremely energy and resource intensive.  If the sand is first strip mined, it must then be liquefied using steaming water.  If the extraction is by the more difficult in situ method, a mine must first be drilled, then steam pushed into the bottom, to melt the tar.  The description “Tar Sands” is far more accurate than the mainstream’s “Oil Sands” description.

Unlike the oil that is extracted from Iraq’s killing fields, each barrel of bitumen requires three barrels of water from the Athabaska River, and 90 per cent of this water ends up in the world’s largest impoundments of toxic wastes, otherwise known as the “tailings ponds”.

Alberta Environment prevaricates that the “ponds” (even though they’re the size of 150 LakeLouises) contain only stable dispersions of bitumen, clay, and water, “and so are safe”.

Natural Resources Canada, however, offers this more comprehensive assessment: salt, phenols, benzene, cyanide, heavy metals (such as arsenic), and dozens of other cancer makers can be found in the “ponds”.  Minnows last about 96 hours in the ponds, cute Buffle Head ducks drown by the thousands,  and most “ponds” contain  enough dissolved chloride and sulfate to exceed guidelines to protect aquatic life by three or four times.  Ammonia exceeds the U.S Environmental Protection Agency’s standards for surface water by more than 60%, and Polycyclic Aromatic Hydrocarbons (PAH) and Naphthenic acids, some elements of which contain human carcinogens, leak into the Athabaska  river by as much as eighteen gallons a second.

 Communities downstream of the leaking “ponds”, such as Fort Chipewyan, have a 30% increase in their cancer rates. It’s unlikely that you’ll see visitors to FortChip.  drinking anything other than bottled water. If the water was flowing the other way, towards Fort McMurray, it’s certain that the water quality testing would be taken more seriously. 

 Each day, the tar sands industry burns enough natural gas to heat six million homes. And each day, it contributes untold amounts of green house gases to the atmosphere.  A barrel of bitumen produces three times as many green-house gases as a barrel of conventional oil.

 Air monitoring, conducted by the Fort Air Partnership and Environment Canada is also third rate, with one expert, Donald Blake, explaining that the energy audits “reeked of cover-up and sleight of hand”.

The development regulations governing this industry are as corrupt as the health regulations.  The Energy Resources Conservation Board, largely funded by industry, approves almost all development applications submitted by industry (over 95% in 2006).  Typically, the board will assess a project’s environmental impact in these words: the project “is not likely to cause significant adverse environmental effects.” The reality is quite different.

 When the tar is gone, and the energy companies have left (after a perfunctory “clean-up”), the real costs of “cleaning up” externalities will be left to the public (private profits, externalized losses), and even then it will be an impossible task.  Water deficits, coupled with increased average temperatures, will preclude the restoration of many areas to the filtering marshlands that previously existed. That being said, estimates are that an adequate clean up would still cost about two decades worth of royalties.

Some wishfully argue that technological advances will fix everything. Unfortunately, they’re wrong.  When energy companies find ways to decrease amounts of C02 produced per barrel of oil, they wipe out those savings by ramping up more oil production, thereby increasing the C02 produced.  Economists refer to the phenomenon as the Khazzoom Brooks Postulate.  It applies to cars and airplanes as well. Cars are more efficient, but we drive more cars. Airplanes burn 40% less fuel, but the industry has grown by 150%. 

There’s even talk of building nuclear reactors to heat the tar, but reducing total energy consumption (and therefore limiting tar sands exploitation) is the only answer.

Unfortunately, the governments of Alberta and Canada don’t accept this reality.  And Canada is already the world’s eighth largest emitter of GHG’s.

The economics of the tar sands are also a mess.   A recently suppressed Conservative-funded study explains the toll that the Dutch disease is taking on Canadian manufacturing.

 The tar sands give new meaning to the phrase “Open for Business”.  A 2007 panel, measuring the government’s share of industry oil revenues collected through royalties, found that of ten governments selling oil, Alberta ranked last. Venezuela was first at 89%, while Alberta collected a mere 39% of industry oil revenues.  To add insult to injury, the federal government is still subsidizing the tar sands.  Every year, the Harper government lavishes the already rich petroleum companies with subsidies of $1.38 billion.  

The tar sands are more like an unregulated third world “energy supermarket” than the “energy superpower” being touted by Prime Minister Harper.

One day, (hopefully sooner rather than later), extraction of tar sands will stop, and large swaths of the province may well look like a barren moonscape.  It was with this in mind that in 1976, former Alberta premier Peter Lougheed set up the Heritage Fund, where 30% of non-renewable resource revenue would be dedicated.   Unfortunately, subsequent governments stopped contributing to it, and Premier Klein used it as a poorly managed slush fund.

Norway was smarter.  They took Lougheed’s idea, set it up with stricter rules, and mandated that 94% of oil revenues would go to the fund.  Since 1990, Norway’s fund now boasts a healthy balance of $500 billion invested

The balance of Alberta’s Heritage Fund as of March 31, 2012, is a paltry $16.1 billion in comparison.

It’s a deal with the devil.  The Harper government is selling Canada’s freedom and democracy for tar.   Even from an economic point of view, it’s currently a losing equation.  The devil is winning, but then, that’s usually the case when the petroleum industry enters the mix. 

Mark Taliano is a native of Niagara, a retired educator and a frequent contributor to Niagara At Large of commentary around social justice issues embraced by the 99 per cent. 

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