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.
Instead, Levi argues, the social and environmental effects of tar sands development should be handled by the affected communities and U.S. regulations shouldn't be used as a back door for addressing these issues. "I don't think it's appropriate for U.S. policymakers to get involved in other countries' local affairs unless they're extremely egregious," he said.
IHS-Cambridge Energy Research Associates, in its May 18 report, pays more attention to the strains placed on the water and land resources from tar sands development, but it similarly views the tar sands as a critical future energy source and frames the issue around how to reap the most benefits of this vast oil supply while minimizing the costs to the environment.
Environmentalists who have been closely following tar sands production say the considerable environmental problems caused by extracting tar from the sands can't be so easily whisked away.
"It's unclear to me whether you can solve some of the very serious environmental problems you get from extracting tar sands," says Susan Casey-Lefkowitz, a senior attorney at the Natural Resources Defense Council.
Among the worst environmental problems are "tailings ponds," which are filled with toxic mining waste as the oil is extracted and which are leaking 11 million liters a day into local watersheds, according to Smith at Forest Ethics.
To get the tar out of the sand requires immense amounts of water. When tar is mined from the sand, it takes 2 to 4.5 barrels of water for each barrel of oil produced, according to CFR. When the tar is extracted using an on-site or "in situ" method called steam-assisted gravity drainage, only 0.2 barrels of water is used because much of the water is recycled. According to the nonprofit Corporate Ethics, much of this recycled water ends up in the tailings ponds.
"Clean water is going to be an even more precious commodity than oil," Smith says. "We can live without oil. We can't live without clean water."
The harm to the land from oil sands production is considerable and long-lasting. When tar is mined from about 100 feet below the surface, the forest floor is stripped. While oil companies are obligated to reclaim the land, any reclamation of this "pretty complex and delicate forest ecosystem" will be decades in the future, says the NRDC's Casey-Lefkowitz.
The implications of mining is already evident. Hundreds of ducks have died in the tailing ponds. The caribou herd in the Athabasca River tar sands region has declined by about 50% over the past 10 years, and some bird species have declined by as much as 80% in areas with heavy tar sands production, according to a report from the Pembina Institute and Canadian Parks and Wilderness Society.
For in-situ methods, which are likely to be used more in the future, the potential environmental problems are mainly problems of the unknown, Casey-Lefkowitz says. For instance, the extraction of tar from deep below the surface could lead to contamination of fresh water aquifers. The oil companies "say it won't impact hydrology, but it doesn't seem as if they've done the studies to know that yet," she says.
The U.S. imported 19% of its oil from Canada by 2008, up from 15% in 1998, according to IHS-CERA, and an increasing percentage of that oil comes from tar sands. Its production is likely to increase, even with carbon emissions regulations, IHS-CERA says.
Its report runs three scenarios based on a future of high growth, low growth, and a "new social order" that would include more alternative fuels and strict carbon regulations in North America. In a high-growth economy, tar sands could produce 6.2 million barrels a day of oil, supplying 37% of the U.S.'s oil needs by 2035. An economy with more emphasis on alternative fuels and carbon regulations would reduce that production need, but IHS-CERA estimates that the U.S. would still import about 3 million barrels of tar sands oil a day.