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Desperation in the Gulf… the sequel?
By Kenny Bruno
Tuesday, May 11, 2010
Four new reports show why expanding the Canadian tar sands industry to the Gulf of Mexico is bad policy for the United States.
Tar Sands Invasion is a comprehensive introduction to an industry that most Americans know little about, and makes the case that tar sands oil is the dirtiest and most expensive in the world. Tar Sands in Your Tank is an expose of the trade in tar sands oil, from the Gulf of Mexico to Europe. The report reveals that such exports will increase if the tar sands industry has its way. Two Research Notes, The Keystone XL Pipeline: Not Needed, Too Expensive, Better Solutions Exist and Tar Sands Oil Means High Gas Prices, document that pipeline capacity is already overbuilt and that the tar sands industry requires prices of at least $3 a gallon, and probably closer to $4, to be profitable.
Together, these reports eviscerate the rationale for building the Keystone XL (KXL) pipeline, which is the infrastructure linchpin for getting tar sands oil from Alberta to the Gulf of Mexico in large quantities. The reports show that the pipeline will raise the cost of gasoline, encourage the destruction of millions of acres of Boreal Forest, threaten the Ogallala aquifer, and facilitate the export of dirty diesel to Europe. Even BP is against the pipeline!
While KXL is not in the national security interest of the United States, it is in the financial interest of certain refinery companies that specialize in processing heavy crude oil, like that derived from the Alberta tar sands. Topping the list is Valero, which has committed to buying much of the tar sands crude KXL would carry. Valero is also the largest exporter of tar sands-containing diesel to Europe.
Sowing Seeds of Shipping Controversy
Those exports put KXL and Valero on a collision course with the market. As society seeks lower carbon fuels, corporate policies and fuel standards will demand that shippers segregate tar sands. Valero et al will resist, but ultimately the market will get what it demands. The consumer will pay the price for the building of the un-needed and expensive infrastructure.
The trickle of tar sands oil into Europe has provoked more media coverage than the flood in the United States. The lack of US coverage may be one reason why the Obama Administration, so far, seems inclined to approve the KXL tar sands pipeline.
But the BP Deepwater disaster could be a game changer for our relationship to oil generally, and therefore to the tar sands. Like many disasters, the mega-spill is a Rorschach test, the reaction to which is often "This tragic event shows that [insert whatever the commentator was saying before the disaster occurred]." But some disasters really bring change, and this one comes at a moment when the world is at a crossroads in terms of oil policy.
Desperation's Antidote
In truth, the BP disaster in the Gulf does not directly affect the tar sands. What links the two issues is they both show what happens when policy makers are desperate for oil – or think they are desperate. Like oil under the deep sea, tar sands oil is not cheap, easy or safe, and its extraction comes at a high environmental and economic cost. Faced with that reality, we can either double down on oil addiction or move as quickly as possible to reduce oil consumption.
As Tar Sands Invasion shows, you have to be pretty desperate to believe that extracting oil from the tar sands is a sane way to power an automobile. Investing in tar sands is a profoundly pessimistic act.
These four new reports reflect an optimism about a transportation future that will marginalize dirty fuels like tar sands .The optimism is rooted in evidence that the US can substantially reduce consumption of oil, to the point where tar sands are not necessary or economical.
That day is coming. But first things first. We must not allow the Keystone XL pipeline to be built, lest it lock the Gulf of Mexico, and with it the United States and Europe, into industry's plan for a web of high carbon infrastructure and trade that will last for decades.
We're not that desperate.
Tagged with: keystone xl, pipeline, oil demand, gulf oil spill
