Canada, can we talk? You just saw what happens when the leaders of governments tell tall tales about important issues, right? It turns out very badly, and we in Canada are left tsk-tsking about “how could the leader of a democracy mislead the public like that?” Well, here we go on our Canada-sized issues and tall tales. Once again in Canada ... governments, the fossil fuel industry and the media are in a tizzy about U.S. pipeline approvals with no regard to economics or logic.
The truth is we don’t need Keystone XL. Based on the Canadian Association of Petroleum Producers’ own forecasts, oilsands production increases are more than covered with planned increases to the Enbridge system (800 thousand barrels per day or 800 KBD), the current Keystone pipeline’s expansion (130 KBD), possible Enbridge Southern Lights reversal (150 KBD), and some miscellaneous projects. Then we have the white elephant of Trans Mountain our prime minister has saddled us with. That’s more than enough to get us through this decade and likely forever as the world has to start decarbonizing.
After all, in a sure sign global change is coming, even Ontario Premier Doug Ford is getting all excited about manufacturing electric vans in Ingersoll and electric cars in Oakville, the same guy who yanked out electric chargers at GO stations when he first got into the job. Every one of those EVs reduces the amount of oil we will burn in the future.
Fighting climate change means burning less fossil fuels. Burning less fossil fuels means less need for the difficult-to-process, high-carbon bitumen Alberta produces. In terms of economics, we’re the last barrels on the stack of global supply, and the first barrel people won’t want when demand goes down, as it must.
There was no upside for U.S. President Joe Biden to approve a line Canada says is needed, but isn’t. The only reason Donald Trump approved it was as an ill-concealed attempt to undo Barack Obama’s legacy. Here’s why none of the arguments work.
1. The U.S. needs this line for energy security.
No, they don’t. They’ll have access to the bitumen anyway with or without the line. Building the line won’t spur more development in the oilsands because smart money is more interested in short-payback fracked wells, much less risky in a decarbonizing world, not to mention much better quality crude. So without Keystone XL, the same amount of bitumen will be produced and the U.S. will still get all of it through the other pipeline projects. Even the bitumen flowing through the Justin Trudeau pipeline will most likely end up on the U.S. west coast.
2. We need the pipeline, so the U.S. should be good friends and approve it.
The argument might actually be worth putting forward if we actually needed the pipeline. The Americans know we don’t and it is all political theatre. Canadian politicians seem to need to pretend crude pipelines are the only things standing in the way of capital flowing back to the oilsands. They aren’t. The poor-quality, high-capital oilsands product is not preferred over the quick-payback, close-to-market fracked American oil. Smart money goes to fracking.
Time to face the facts, #Canada: We don't need the #KeystoneXL pipeline. #climatechange #climatecrisis #sustainability
3. We’re working at reducing our carbon footprint so it isn’t that bad.
Yes, Alberta is getting off of coal for the electricity that powers the oilsands and experimenting with solvents to help lower the energy in extraction. But much of the oilsands' carbon footprint will still come from the natural gas burned to make steam to melt the bitumen in the ground so it will separate from the sand and flow, and that conversion from coal for electricity is also going to burn a lot of natural gas. Not to mention the big processing units that burn coke from oilsands refining when making synthetic crude, or the energy used to make hydrogen for that synthetic crude, and so on. Also, bitumen yields a large amount of petroleum coke when processed, whereas fracked oil makes almost none of that.
It’s hard to argue bitumen is a low-carbon source of supply when large amounts of carbon are needed to produce it and significant amounts of something that looks like coal is produced when it’s processed. So, while the new processes make oilsands carbon somewhat better than unbelievably terrible, there is no way for it to be good.
Yet Trudeau and Alberta Premier Jason Kenney still pretend pipelines are the saviour of the oilsands. Nobody outside of Canada believes that, they all know the truth — big money is not coming back to the oilsands, pipelines or no pipelines.
Right now as a country, we are upset as we see Pfizer vaccine doses reallocated to Europe instead of to us, and we get all worked up about the U.S. cancelling an unneeded pipeline. We should be asking ourselves how we set priorities. Why as a country did we decide high-carbon, remote, difficult-to-produce uneconomic bitumen was a strategic product and allow our own vaccine manufacturing capability to slip away unnoticed?
Good leaders should protect us from real threats like pandemic viruses and stop fighting the inevitable wind down of our fossil fuel industry. It just takes courage on their part to tell the truth and our part to listen.
Ross Belot is a retired senior manager with one of Canada’s largest energy companies. He is now an environmental poet.