The oil sands and Canada’s national interest

This Globe and Mail article on the oil sands and the new Obama administration makes a very dubious assertion: namely, that it is unambiguously in Canada’s interests for the oil sands to keep expanding and feeding US energy demands. It argues that, while most of Obama’s cabinet seems serious about restricting greenhouse gas emissions, General James Jones “may turn out to be Canada’s best ally,” because he supports the continued use of fuel from the oil sands.

In the long run, I think Canada will be better off if most of that carbon stays sequestered as bitumen an boreal forest. It certainly isn’t in Canada’s interests to see a delayed transition to a low-carbon economy in the US, given the extent to which it would increase the probability of abrupt, dangerous, or runaway climate change.

This is a case where short-term economic incentives have been trumping those based on a long-term view and a risk weighted analysis. In that sense, the oil sands boom is quite a lot like the housing boom that is in the process of unraveling worldwide. Canada would do well to accept how newly prominent environmental concerns (coupled with less access to capital) should combine to curtail the oil sands initiative before it becomes even more harmful.

[Update: 8 March 2010]. is a site dedicated to making the case for leaving coal, along with unconventional oil and gas, underground.

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

23 thoughts on “The oil sands and Canada’s national interest”

  1. Ignatieff touts Alberta tar sands

    Oil industry key to Canada’s geopolitical power, Liberal leader tells Quebecers in unity pitch

    Jan 22, 2009 04:30 AM

    Andrew Chung
    Quebec Bureau Chief

    MONTREAL–Liberal Leader Michael Ignatieff brought a pragmatic message to this environmentally conscious province yesterday, defending Alberta in the name of national unity.

  2. The imaginary stick
    Robert Silver, January 22, 2009 at 12:26 PM EST

    1.) Canada hasn’t suddenly become a big exporter of oil to the U.S.

    2.) It is actually a mistake to say that “Canada” exports any oil to the United States. Canada – the nation-state – does not own a single barrel of oil or a single pipeline

    3.) Let’s therefore cut through the noise and talk about what the real issue is: climate change.

  3. Thou shalt not extract, eh?
    By Joseph Romm

    The Catholic bishop whose diocese extends over the tar sands has posted a scathing pastoral letter, “The Integrity of Creation and the Athabasca Oil Sands.”

    The letter by Bishop Luc Bouchard concludes, “even great financial gain does not justify serious harm to the environment,” and “the present pace and scale of development in the Athabasca oil sands cannot be morally justified.”

  4. Liberals must embrace the West, Ignatieff says

    The Canadian Press
    February 14, 2009 at 10:51 PM EST

    Mr. Ignatieff told a brunch crowd of about 400 people in Saskatoon on Saturday that the party must work hard to win more seats, and more respect, in the West.

    “Sometimes we’ve fallen prey to the temptation to run against the West, you know, to run against Alberta, to run against the Saskatchewan energy sector. This is not the way to go,” he said.

    “The Western economy is the beating heart of Canadian progress in the future. This is where the action is. And, if this is where the action is economically, then we have to be there, too.”

  5. Clearly, both the Liberals and Conservatives think supporting the oil sands is in their immediate political interests.

  6. Oil giants circle bargains in oil sands

    The Patch

    Claudia Cattaneo, Financial Post Published: Monday, February 16, 2009

    CALGARY — While no one seems to be looking, the oil sands landscape is poised to change once again as global oil majors take steps to stake out even bigger holdings.

    But in contrast to the last wave of foreign takeovers, made at hefty premiums and sometimes for marginal properties, multi-nationals including Paris-based Total SA, London-based BP PLC and Irving, Tex.-based Exxon Mobil Corp. are hunting for top-drawer properties at today’s cheap stock prices or taking advantage of the sector’s downturn to bolster their presence.

    As one investment banker put it: “If you are a major, this is a once-in-a-generation opportunity to build a huge position.”

  7. Canadian PM says oil sands must be developed
    Fri May 22, 2009 1:27pm EDT

    CALGARY, Alberta (Reuters) – Canada’s oil sands are critical to the Canadian economy and must be developed, Prime Minister Stephen Harper said on Friday.

    Some critics in the United States and elsewhere have suggested banning the import of oil from the oil sands in northern Alberta on the grounds that vast amounts of energy are required to produce it, making oil sands developments major emitters of greenhouse gases.

    “We’re working closely with the Alberta government and our provinces to make sure we do everything to ensure the responsible environmental development of this resource but that we do develop it, because it is critical not just to our economy, but to North American energy security as well,” Harper told a news conference in Calgary.

  8. U.S. advocates for oil sands tout security of supply

    Shawn McCarthy

    OTTAWA — From Monday’s Globe and Mail Published on Monday, Oct. 12, 2009 12:00AM EDT Last updated on Monday, Oct. 12, 2009 11:20AM EDT

    The Houston-based Consumer Energy Alliance has a grim message for those who propose to restrict U.S. access to Canada’s oil sands production to cut greenhouse gas emissions: If the U.S. doesn’t buy the Alberta crude, China will.

    As a result, such measures would not advance the global fight against climate change, it says. But the U.S. would be more dependent on Middle East oil, “Communist China” would be siphoning off secure North American crude supplies, and motorists would face higher prices, the alliance warns in a campaign aimed at supporting expansion of imports from the oil sands.

    As the U.S. moves to adopt climate change legislation and prepares for negotiations in Copenhagen toward a new global treaty, environmentalists have stepped up their attacks on Canada’s oil sands as emblematic of the world’s reliance on “dirty” fuels.

  9. “I think Canada will be better off if most of that carbon stays sequestered as bitumen an boreal forest. It certainly isn’t in Canada’s interests to see a delayed transition to a low-carbon economy in the US, given the extent to which it would increase the probability of abrupt, dangerous, or runaway climate change.”

    Do you think “Canada” has “national interests”? I think it makes sense to speak of “national interests” in Rousseau’s republic of virtue (the “general will”), or in absolute monarchy. But certainly just as much as we now think that the Queen’s approval of legislation is merely formal, the idea of a singular “national interest” is replaced by power articulated, mediated through systems – hopefully in a way that encourages fair and balanced representation of the interests of diverse individuals.

    For their to be a “national interest”, there needs to be a nation – a real superseding organic unity of people, unified enough to have desires and goals real enough to be wrong about (otherwise you couldn’t debate what was “actually” in the national interest). In my understanding, the battle Trudeau won was the end of any chance of Canadian “nation” in this sense.

    The question for me is therefore, why is this term “national interest” being used by the press? It still seems to function in political discourse despite being obviously nonsense. What particular (not national, likely elite) interests is it justifying as universal? As is common, asking the right question is more difficult than the answer – it is plain which interests this kind of argument supports, and plain what sorts of corruption might exist for the notion of “national interest” to be mobilized in favour of those particular interests.

  10. Canada’s ‘national interest’ is whatever will promote good lives for Canadians in the long term.

    There are plenty of reasons to doubt whether extracting the oil sands does that.

  11. “whatever will promote good lives for Canadians in the long term.”

    Which Canadians? Do you mean it is some sort of banal utilitarian equation, where the costs to some are offset by benefits to others by quantifying “good lives”?

  12. That seems like the closest thing to a sensible answer.

    That or “what future generations would have wanted us to do, with the benefit of hindsight.”

  13. “Some say energy interests have an inordinate influence on Canada’s national policy, something which is symptomatic of a deeper “corruption” in Canada. Among them is Thomas Homer-Dixon, who holds the Centre for International Governance Innovation Chair of Global Systems at the Balsillie School of International Affairs in Waterloo, Ontario.

    In a December interview, Mr. Dixon asserted that “our political processes in Canada are being corrupted by narrow energy interests.”

    He said some policy options—such as major constraints on tar sands development—have become third-rail issues for politicians, and are virtually beyond discussion within elite political circles in Canada.”

  14. “Tar sands don’t enhance energy security just because they come from a friendly neighbor. Continued reliance on oil empowers those countries with the most oil, including Saudi Arabia and Iran. The best investments in energy security are investments in alternatives to oil. Fortunately, those best investments also clean up the local environment, combat global warming, and create home-grown jobs in energy efficiency and renewable energy.

    We can’t seriously combat global warming — and save our winters — while getting fuel from the world’s dirtiest source. And the way toward breaking an addiction can’t be to double down on that addiction by finding ever dirtier and more expensive sources. The way to get off oil is to get off oil.

    Relying on yet another dirty energy source could put an end to the winters we know and love. Unless we act now to combat climate change, future Winter Olympics could be altered dramatically — whether through using artificial snow or forcing outdoor events to compete indoors.”

  15. “We can’t seriously combat global warming while getting fuel from the world’s dirtiest source. If we allow Canada’s oil sands project to creep across our border, it will lock our nation into dependence on yet another foreign source of oil, just as our local clean-energy industry is beginning to thrive.

    Right now, we are poised to become a leader in the global clean-energy economy. By taking the steps to ensure that we are the leader of the next industrial revolution, we can reignite our economy, bolster national security and improve the health of our people.

    One of the most important things we can do to demonstrate that leadership is to say no to Canada’s oil sands. For now, the decision rests with the Obama administration. By denying permits for pipelines and refineries in the United States, President Obama can signal to the world that we are serious about fighting climate change and helping American clean-energy technologies thrive.

    If he does, we just might be able to save the winter games we love — and set a new course for the nation we cherish.”

    Michael T. Richter is a founding partner in Environmental Capital Partners. He is also the former goalie of the New York Rangers, a three-time Olympian and a member of the Sierra Club’s National Advancement Council.

  16. Oilsands expansion leads Canada to fastest GDP growth in nearly 2 decades

    Non-conventional oil and gas extraction surprises analysts, expands by 13% as national economy hums along

    Canada’s economy grew at its fastest pace in nearly two decades in May, led by expansion in the oil and gas sector.

    That’s according to the latest GDP data from Statistics Canada, released Friday, which shows a 7.6 per cent growth in oil and gas extraction.

    Non-conventional extraction — the sector which includes Alberta’s oilsands — grew the fastest, expanding by 13 per cent in May.

    Conventional extraction, by comparison, grew by 3.2 per cent.

    The rebound in non-conventional extraction caught many analysts by surprise, as growth in the oilsands sector, alone, accounted for roughly half of the national GDP increase.

    “Most of the growth is still being driven off the oil price, and the biggest boost this year has been the fact that the oil price is near $50,” Jackie Forrest, director of research with ARC Energy Research Institute, told CBC’s On The Money.

    “[That] combined with a lot of innovation has allowed new drilling to happen. This year on the non-oilsands side we’re actually expecting about a 40 per cent improvement in the wells drilled compared to last year.

    “At the same time, on the oilsands side, we’re still building those megaprojects that were approved when oil was at $100, and that’s also contributing to the economy.”

    The recent expansion comes after a series of setbacks for the sector.

  17. Nearly a million hectares of oilsands exploration leases abandoned

    ‘You can’t convince shareholders to continue to put that money out if there’s no prospect for success’

    In another sign the bloom is off the boom for the oilsands, the industry has returned almost one million hectares of northern Alberta exploration leases to the province over the past two years — abandoning an area far bigger than P.E.I.

    The total area covered by oilsands leases remained constant at about nine million hectares between 2011 and 2014. But it fell to 8.5 million hectares in 2015 and 8.1 million in 2016, following the crash in world oil prices from more than $100 US to under $60 per barrel in 2014.

    Most of the returned acreage represents either expired or surrendered leases, according to Alberta Energy, which provided the statistics at the request of The Canadian Press.

    Observers were surprised by the size of the lease returns, which they attributed to industry cost-cutting and disinterest in spending to develop new prospects when there’s no money to build projects already on the books.

Leave a Reply

Your email address will not be published. Required fields are marked *