Rebecca Cook/Reuters/ Colin O'Connor/ TransCanada Corporation
Karl Marx said that history repeats itself, first as tragedy, then as farce. The April 20 explosion of BP’s Deepwater Horizon drilling rig in the Gulf of Mexico was certainly an epic tragedy, from the all-but-forgotten deaths of 11 workers on the platform to the eventual fall of CEO Tony Hayward—a man handpicked for the job when his mentor John Browne succumbed to the political after-effects of a refinery explosion. By comparison, the July 26 rupture of line 6B in Enbridge’s Lakehead pipeline system seems a trivial matter. The total volume of crude oil dumped into the Michigan countryside before isolation valves closed the pipe is estimated by Calgary-based Enbridge at 19,500 barrels—somewhere between seven and 13 hours worth of flow from the Horizon wellhead.
Measured in U.S. gallons, that’s about 819,000. But the ultimate cost in headaches to Canada’s oil patch, at a time when it is fighting a multi-theatre political war over the U.S.’s regulatory treatment of petroleum from the Athabasca oil sands, might be higher.
In a green era, America’s oil supply issues involve a constant tug-of-war between environmental considerations and energy security. On the latter side of the argument, the case for Canada, now by far the U.S.’s largest source of imported oil, is overwhelmingly strong. But on the environmental end, things are more complicated. Environmental NGOs have made a special target of Alberta’s “dirty oil.” The unvarying message—whether from bad Flash websites or random celebrities—is that greenhouse-gas emissions from the production of synthetic tar sands oil are three times as large, barrel for barrel, as those from conventional oil.
That figure excludes emissions by the end user, and the ratio shrinks to more like 120 per cent when the full “well-to-wheels” life cycle is considered. Big Oil is quick to point out that the footprint of the oil sands is diminishing with the advent of technologies like steam-assisted gravity drainage (SAGD) and electricity cogeneration. And Canada’s government is encouraging progress by imposing a carbon price on oil sands producers. (The U.S., for its part, doesn’t yet impose one on anybody.)
The real issue for the NGOs may be that they want the U.S. to move away from oil, period. In a way, the relative ecological filthiness of Alberta synthetic petroleum is beside the point; what makes that oil a special threat is that its abundance will delay America’s transformation to a post-oil economy. And pipelines, which represent practically irreversible multi-decade supply commitments, are an attractive choke point for advocates of the anti-fossil transition and NGO veterans in the Obama administration and Congress. Enbridge’s spill thus thrusts a poorly timed elbow into the breadbasket of its sister pipeline company, TransCanada Corp., which is struggling to win U.S. approval for an extension of its Keystone system.
The Keystone line currently runs from Alberta to the oil crossroads of the continent at Cushing, Okla. The idea behind “Keystone XL” is to open new capacity for Alberta’s production by reaching out from Cushing to the Gulf Coast (where some refineries are designed to handle similar heavy oil from Venezuela, a political basket case whose output is declining). XL’s fate technically lies with the State Department, which issued a favourable draft environmental impact statement (EIS) on Apr. 20 and entertained public comments over a statutory 10-week period. The next step was to solicit opinions from other federal agencies. Last month, the Environmental Protection Agency stepped in to argue that the State Department’s brusque draft EIS, which had more or less said, “Hey, our oil’s gotta come from somewhere,” was not good enough.
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