Tar Sands Studies Ignore Significant Environmental Costs

A new report from the Council on Foreign Relations touts the Canadian tar sands as an important future source of oil for the U.S. market. It argues that the tar sands' greenhouse gas emissions can be safely limited by regulations, and it concludes that both climate change concerns and energy security issues have been overstated.

The problem, environmental groups say, is that both the CFR report and a similar study recently released by IHS Cambridge Energy Research Associates, brush aside the considerable environmental costs of extracting the tar from the sands.

To Merran Smith, climate director at Forest Ethics, the problem with the CFR report begins with its definition of energy security:

“The real definition of energy security should not be about maintaining an addiction to oil, it should be about stopping our addiction and about creating renewable, clean energy that creates job in the U.S.”

The CFR report also claims that addressing the climate implications of tar sands production can be postponed for several decades. A barrel of tar sands crude produces 17% more greenhouse gas emissions than the average barrel of oil consumed in the United States over its lifecycle, but author Michael A. Levi argues that climate concerns are overstated because emissions from tar sands production is less than 0.1% of all emissions globally.

This line of thinking is illogical, Smith says:

"We need to take every source of carbon pollution and start to reduce it."

Tar sands are a mixture of sand, clay and bitumen, a tar-like gooey substance. To get at the oil requires separating the sticky bitumen from the sand, a difficult, energy-intensive, water-intensive process. The tar sands regions also lie mainly underneath the pristine boreal forests in northern Canada.

To many policymakers, the tar sands present a conundrum.

Canada, already the United States’ top supplier of foreign oil, has more than 170 billion barrels of  “proven” reserves of oil in the sands. This is a huge potential supply from a friendly, stable neighbor. But the extraction and processing of tar into light crude creates heavy carbon emissions, which are likely to face U.S. regulation under a cap-and-trade system.

Levi, whose Washington think tank focuses on the influence of economics and political forces on world affairs, argues that the U.S. shouldn't penalize the tar sands with a strict cap-and-trade auction or a California-like low carbon fuel standard, which requires a reduction in the lifecycle emissions of fuels over time.

The U.S. should instead enable the tar sands to make a continued contribution to the nation's energy needs. Any cap-and-trade program should be coordinated with Canada and provide free allowances initially to tar sands producers to level the playing field with lower-cost producers, Levi recommends.

“I certainly don't want to use free allowances to make tar sands competitive with cheap (e.g. $20/bbl) oil. That would be crazy,” Levi said in an email. “I'm talking about offsetting a part of the extra carbon cost entailed in production – probably a couple dollars a barrel at most – for a fairly short transition period.”

The report's recommendations focus on providing incentives for tar sands producers to cut their emissions, but in a way that is careful to avoid discouraging production or increasing oil prices.

Other than examining emissions, however, the Levi's report doesn’t pay much attention to the considerable environmental problems caused by tar sands production, such as its significant water use, contamination and impact on wildlife and local communities.