So what effect will the Gulf oil spill have on our energy usage and our energy policy? On oil prices? On the move towards renewables?
Perhaps people will stop pointing fingers and realize that the blame doesn't lie with BP or with Haliburton or Transocean or Obama or Bush. We'll realize that the blame lies with everyone who steps on a gas pedal or buys stuff moved by petroleum fuels. We will radically change our driving and our buying habits. The U.S. government, in swift bipartisan action, will enact a sensible long-term energy framework that spearheads efficiency, prices carbon, decouples utilities, massively funds renewables and taxes the oil companies.
Well, probably not.
A more likely scenario: the price of oil will rise a few dollars a barrel in the short term. There will be calls for onshore drilling from the "Drill, baby, drill!" crowd. Politicians will try to score political points and the Obama Administration will enact some tactics that will stall or eliminate other projects with the potential to add significant supply. Indeed, President Obama has placed a moratorium on new U.S. East Coast offshore oil drilling pending an investigation of the current Gulf catastrophe. And the U.S. has just opened a criminal and civil inquiry into the spill, when it probably should be indicting its own regulatory agencies.
***
"The U.S. gets 30 percent of its oil from the Gulf and about 15 percent of its natural gas," according to Robert Bryce, senior fellow with the Center for Energy Policy and Environment at the Manhattan Institute in an article in The Edmonton Journal.
If we drill less in the U.S., we will have to source that supply elsewhere.
One group that stands to benefit from that shift is the Alberta oil sands industry. And the Albertans and the Canadians are making their case to the press and in Washington, D.C.
In the same article, Don Coxe, strategy adviser with BMO Market Capital and chair of Coxe Advisers LLP in Toronto asked, "Who's the big winner? The oil sands [are], because now you're looking at a situation where the only long-duration oil that's still available and isn't tied up by governments and sovereign wealth funds and everything else is in the oil sands." He adds, "What is really bad news for offshore is good news for the oil sands. I believe the value of those reserves in the ground has gone up sharply."
“The risks associated with the oil sands, the environmental risks, are significantly different than -- and probably less significant than -- the kind of risks associated with offshore drilling,” said Canada's Federal Environment Minister Jim Prentice.
Alberta Premier Ed Stelmach argued that the oil sands are a safe, dependable and even clean fuel option for Americans -- a source of energy security and jobs. Stelmach said the problems associated with capping the rupture at BP’s blowout well off the Louisiana coast should raise new questions about what is really “unconventional” oil.
***
On oil sands:
Oil sands (or tar sands) are considered "unconventional oil." Referred to as bitumen, these deposits occur in the U.S., Venezuela, and to the greatest extent, in Canada. They are dense and difficult to mine and extract. Alberta, Canada's Athabasca Oil Sands is the largest reservoir of bitumen in the world, comparable in size to the earth's largest reserve of conventional petroleum.
The Alberta project has been called "the most destructive project on Earth." If the oil sands project was its own nation, it would emit more carbon dioxide than 145 other countries, according to The Toronto Star.
Mining these deposits is economical only when the price of oil is high.
And like any mining operation, oil sands extraction has a big impact on the environment:
- The Canadian oil sands lie under boreal forests, which are destroyed by the mining operations.
- The extraction process uses a host of toxic chemicals.
- The residue or tailings form lakes of toxins near waterways.
- The numbers differ whether you believe the oil companies or the environmentalists, but the water intensity of developing these unconventional oils is very high. Oil Sands Watch, a conservation-minded group, claims that approximately 12 barrels of water are required to produce each barrel of oil from bitumen. Up to 70 percent of this water is reused, but that still means two to four barrels of water are used to produce each barrel of oil from oil sands mining. Greenpeace gives the number as 349 million cubic meters per year, or twice the amount of water used annually by the entire city of Calgary.
And in the end, we burn the stuff to power our transportation.
The only good point I can find about tar sands is that the mining companies employ really cool trucks to transport the stuff.