Obama and the Oil Sands

[lessthaniv]

Interesting Article about Obama's campaign promises vs the U.S. need for Canadian Oil Imports.

 

http://www2.canada.com/calgaryherald/news/story.html?id=8daa1fae-0944-44f1-a0cd-c08dcd1ee218

 

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Obama strategy puts heat on oilsands

Presidential hopeful could target Alberta

 

Sheldon Alberts, with files from Geoffrey Scotton, Colette Derworiz and Kim Guttormson, Calgary Herald

Canwest News Service

 

 

Wednesday, June 25, 2008

 

 

 

CREDIT: Laura Rauch, Getty Images

The energy policies of Barack Obama, left, could pose a big challenge to Canada's energy industry.

 

Barack Obama on Tuesday vowed he would break America's addiction to "dirty, dwindling and dangerously expensive" oil if he is elected U.S. president -- and one of his first targets might well be Alberta's oilsands.

 

A senior adviser to Obama's campaign told reporters it's an "open question" whether oil produced from northern Alberta's oilsands fits with the Democratic candidate's plan to shift the U.S. sharply away from consumption of carbon-intensive fossil fuels.

 

"If it turns out that those technologies don't advance . . . and the only way to produce those resources would be at a significant penalty to climate change, then we don't believe that those resources are going to be part of the long term, are going to play a growing role in the long-term future," said Jason Grumet, Obama's senior energy adviser.

 

Canada's oil industry was already targeted this week at a convention of big-city U.S. mayors who singled out Alberta's oilsands in a resolution calling for national guidelines to track the impact of different types of fossil fuels.

 

The American mayors' attack drew a sharp response from Alberta Premier Ed Stelmach, who questioned the logic of attacking North American energy sources like the Alberta oilsands when the United States imports a great deal of its oil from much farther away.

 

"How are you going to convince me that the carbon footprint is less by developing the oil in Iraq . . . and shipping it to the coast and refining it there?" he said.

 

Calgary Mayor Dave Bronconnier blasted his U.S. counterparts, saying they need to visit Alberta in person to "get the facts on oilsands production."

 

"This resolution suggests a lack of understanding," he said, adding the U.S. mayors should focus more on promoting energy efficiency, conservation and the adoption of green technologies.

 

"America will need Alberta's oil; there is no question about it," Bronconnier said.

 

The remarks from Obama's adviser amount to a shot across the bow of Alberta's oilsands industry, which is planning to boost production from 1.3 million barrels a day to 3.5 million barrels over the next decade.

 

The industry has come under attack from U.S. environmentalists because the production of its heavy oil emits an estimated three times more greenhouse gases than conventional oil.

 

"I don't think (Obama's) adviser is aware of the laws for climate change reductions that are mandated in Canada right now," said Greg Stringham, of the Canadian Association of Petroleum Producers. "Its all mixed together, so you can't separate the green molecules from the yellow molecules."

 

About 18 per cent of the oil imported into the United States comes from Canada; however, it is blended from many sources before arriving south of the border.

 

Stringham said ensuring Obama and his supporters understand the environmental improvements that have been made to Canada's oilsands production processes is critical. "Once they understand . . . I think there is room for dialogue for that because what we are doing up here is very close to what he is proposing down there. Once that is clarified, I don't think there will much of an issue."

 

Obama has cast himself as a champion of green energy during his White House campaign, proposing a national low-carbon fuel standard that would reduce greenhouse gas emissions by 180 million tonnes by 2020. He has promised to invest $150 billion in alternative energy, and to reduce American dependence on foreign oil by 35 per cent by 2030.

 

"The possibilities of renewable energy are limitless," Obama said Tuesday in Las Vegas.

 

Christopher Sands, a Canada-U.S. relations expert at the Washington-based Hudson Institute, said Obama's energy policy could pose as big a challenge to the Canadian economy as would his vow to renegotiate the North American Free Trade Agreement.

 

"What he wants to do, clearly, is to eliminate oil sources like the oilsands. He is very aware of them and the process that's generating them," Sands said. "That is a threat to the oilsands and (Canada) has to take this much more seriously."

 

Canada is the largest supplier of oil and gas to the U.S. and the greater awareness of Canada's importance as a U.S. energy supplier has brought added scrutiny and criticism. "I don't think Canadians realize what's at stake in this election is a real fight," Sands said.

 

In addition to Obama's emphasis on lower-carbon fuels, "you have a Congress champing at the bit to interfere with the glide path we all thought we are on" with Canadian oil exports to the United States.

 

Obama is committed to supporting energy sources that help slow climate change -- and he will reward industries that meet tough new greenhouse gas standards, Grumet said.

 

"It's a meritocracy. We are going to support resources that diversify petroleum supplies, that bring more production to this hemisphere, and that meet our long-term obligations to reduce greenhouse gas emissions," he said. "And I think it's an open question as to whether or not the Canadian resources are going to meet those tests."

 

Senator John McCain, the presumptive Republican presidential candidate, has vowed to support alternative energy and reduce U.S. dependence on foreign oil. McCain has placed more emphasis, however, on the need to lower American reliance on oil from the Middle East and countries like Nigeria and Venezuela.

 

© The Calgary Herald 2008

[Packer16]

I think the true character of Obama's changes are being shown.  Where is his pragmatism?  He campaigned on change and that he would compromise but his actions are showing that he will listen but not compromise on what he believes are "fair" outcomes in his eyes (i.e. higher taxes, more regulation, higher spending and tremendous subsidies for un-economic fuels and vehicles - i.e. the gov't knows the best economic outcomes, the market is wrong and we will subsidies the best "fair" outcome) and he is using the crisis to push his "fair" outcomes.  This may push the US over the edge in terms of a currency crisis and will at least cause capital to go on strike.  I am surprised the U of C economists are not saying anything.  Where is Alan Goolsebee?  The guys leading the charge are the Keynesian guys (Summner and Jared Bernstien) who think the market is something they can engineer to meet their goals of a "fair" outcome.  What a waste of time and energy that will only prolong the economic downturn and hurt those who they intend to help.  You would have thought these guys would have learned from the 1930's and 1970's but I guess they are  blinded by their own quest for "fairness". 

 

Funny thing is that I believe in many of the same "fair" outcomes, however, the way to achieve these outcomes is not by government edict and market manipulation and control but by individual action.  The only thing gov't action will create is confusion on the rules of the game, thereby, causing wealth to go down as people stuff savings into more risk averse investments.  In addition, they cause un-intended consequences.   

 

Packer

[Guest ericopoly]

We'll see whether his "market manipulation" can measure up to the leadership of the Republicans (short selling ban).  That is one hell of an act to follow!

 

[SharperDingaan]

 

Ex the chest thumping what's really being said. 

 

I hear reduce the carbon footprint by 2/3. Sequesture the CO2 in old fields (to boost pressure & production). Build pipelines (green infra-structure) to get the CO2 from the tarsands to those fields. Reduce/recycle the water consumption. IE: Scale up what's allready being done.

 

New industry making old fields worth far more as carbon sinks, than they ever were when they were producing. And somehow this is a bad thing ?