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Tar sands are the emblematic form of extreme oil. American environmental activist, Bill McKibben labelled their continued extraction the “end game” for the planet's climate.
The resource is extreme because climate science has shown us that most of the hydrocarbons buried under the North Western boreal forest must stay in the ground if we don't want the planet's temperature to rise more than 1.5 degrees Celsius above pre-industrial levels.
It's extreme because, like many other forms of unconventional hydrocarbons, the extraction process for tar sands is highly energy intensive and environmentally destructive - much more than conventional oil - including that produced in Western Canada.
It's extreme because of the environmental conflicts that the expansion of their production entails, both on the extractive frontier in Northern Alberta and Saskatchewan, and all the way down the pipeline routes to the West and East coasts.
It's extreme because a handful of oil corporations consider a large share of the tar sands to be their assets, and they will do what they must to realize the value of these reserves. This capitalist pressure to extract unburnable oil will push energy corporations to exercise what power they can to undermine climate change policies that threaten the value locked in their reserves.
It's extreme because the shift to extracting unconventional oil deposits means we have much more oil than we can burn. While this may uphold the comforting idea that we can continue living in a petroleum-dependent society, the growing number of conflagrations ravaging forests and communities reminds us that the consequences oil dependence are also extreme.
The age of extreme oil is a time of struggle between two imperatives. On the one hand the imperative of transitioning away from fossil fuels if we are to meet Canada’s Paris Agreement commitments. On the other hand, the imperative of extreme oil extraction that follows from the shift to unconventional forms of hydrocarbons during the last 10 years. And nowhere is this contradiction more apparent then here in Canada.
Canada’s economy, politics and culture have been profoundly changed by the shift towards unconventional oil. Though all acknowledge the importance of the resource sector for the Canadian economy, we tend to see ourselves as having moved away from dependence on the extraction and export of raw unprocessed commodities. That the staples model of development studied by Harold Innis belongs to our past.
But at the height of the tar sands boom in 2014, the extractive sector of our economy (which includes mining) accounted for almost 25 per cent of private sector investment. The tar sands industry has anchored itself deeply through what staples theory calls economic linkages – upstream (construction and maintenance of extractive equipment and facilities) and downstream (transportation of extracted raw commodities). There are also macroeconomic linkages through a Canadian dollar linked to oil prices and the spillover effects of oil related income for households, businesses and governments.
As the capitalization of oil corporations listed on Canadian exchanges exploded, literally crowding out other sectors, Canadians became further locked in through their savings, pension funds and insurance contracts.
As labour markets, export markets and government budgets were all reshaped by the commodity boom, Canadian governments adopted an explicitly extractivist policy agenda. This meant curbing environmental legislation to fit resource extraction expansion. It meant transforming employment policies and unemployment insurance, and tailoring energy and industrial policy to address the needs of the oil sector. It even skewed the federal government's science policies. And it reinforced Canadian colonialism, intensifying the politics of dispossession that characterize the government's relation with First Nations.
Progressive extractivism: A captured transition?
In this first year of his mandate as prime minister, Justin Trudeau has repeated again and again that Canada's tar sands oil needs to “reach tidewater”. He explicitly abides by the extractivist dictum that it is the federal government’s duty to ensure “our” natural resources access international markets at competitive prices.
At the same time, he enthusiastically signed the Paris Climate Agreement, and even committed Canada to the ambitious 1.5 degree limit. Like Premier Notley, Trudeau is convinced – and wishes to convince us – that we can both pursue tar sands expansion and transition our energy base. That we can even combine the two processes so that the royalties from expansion are used to finance transition. We should thus accept “greened and transparent” pipeline projects that will double and even triple tar sands extraction, because – paradoxically – this will finance the needed transition to a low carbon economy.
During the last decade, most of Latin America's “pink tide” governments went through this cycle of “progressive extractivism” – and the results are mixed at best. While they used the royalties captured from extractive sectors to alleviate poverty and develop needed social services, they were unable to leverage the economic growth from extractivist development to move away from resource dependency. Instead they have become more dependent on their extractive sectors, and the economic and political power of extractivist corporations has grown.
Tar sands corporations welcome progressive extractivism because even if it implies limits on carbon emissions, it forgoes adequate limits on hydrocarbon extraction. Which means the asset value of unconventional reserves is largely protected from climate policy.
The ceiling on carbon emissions is also compatible with the growth objectives of these corporations, which imply an extractive complex that will grow substantially before reaching maturity somewhere in the middle of the twenty first century.
This has many important implications for Canada. First, our economy will continue to grow its extreme oil dependence for at least another 50 years, and moreover the growth rate of the tar sands sector will outrun the overall growth rate of our economy. This in turn means the “staples effects” will be amplified – along with the social, political, colonial and environmental impacts linked to this sector's growth.
The second implication is more perverse. A further expanded tar sands sector will offset a significant share of our greenhouse gas emissions reductions in other areas like green energy and low carbon manufacturing. Instead of directly using these gains to power our shops and our communities we will have to sacrifice them to extreme oil production. Provinces with a very high potential to decarbonize will have to double-up to compensate for the growing carbon intensity of tar sands extractors.
Finally, a growing tar sands industry will use all the power and influence it can muster to ensure that Canada's energy transition efforts – and any global climate initiative – do not in any way impact the value of the buried assets that it wishes to extract during the next half century.
In a nutshell, progressive extractivism implies that the imperative of transition is co-opted by the capitalist pressure to extract, and that our obligation to the planet is trumped by our economic alliance with those corporations that hold extractive rights on buried sunshine.
Welcome to the age of extreme oil. Now let's talk about what can be done about it.
Éric Pineault is a Professor at the Institute of Environmental Sciences and of Sociology at l'Université du Québec à Montréal. He is speaking tonight in Vancouver and Friday in Victoria at public talks hosted by the Corporate Mapping Project, the Canadian Centre for Policy Alternatives, the National Observer, and the University of Victoria’s Faculty of Social Sciences. A few spots are still available at the Vancouver event but Victoria is sold out. Subscribers to the National Observer’s email newswire will receive a podcast link after the events. Find out more about the Corporate Mapping Project here