Alberta Lobbying Hard in Washington on Cap and Trade Bill

Fri, 2009-04-03 15:37Mitchell Anderson
Mitchell Anderson's picture

Alberta Lobbying Hard in Washington on Cap and Trade Bill

Posteriors are puckering throughout the Alberta oil patch as long-overdue climate and green economy legislation moves through the US Congress. The provincial government has responded by hiring Washington lobbyists at $500,000 per year to try and ensure whatever bill gets passed is so watered down that does not impact the dirtiest oil on Earth.

Premier Ed Stelmach of course frames it differently: “There’s so much at stake for Alberta, and we’ll be applying a full-court press not only on elected officials but also on the U. S. administration. It’s important that Alberta has a way of ensuring the right information gets to the policy-makers and the decision-makers.”

What he is worried about is that meaningful cap and trade legislation would further undermine the already marginal economics of the massive tar sands operation.

The foreign market for synthetic crude includes only one country: the United States. Who knew that one day America would move price carbon emissions? Apparently not the operators that have invested billions into the bitumen boondoggle only to see oil prices collapse and cap and trade legislation that will hit the tar sands like a two by four.

Saying this colossal capitial project is exposed on carbon pricing is a mild understatement. Synthetic crude produces at least three times the emissions as conventional oil. These emissions will increase as shallow deposits are exhausted and production moves to non-mining methods. Tar sands emissions already exceed those of 145 nations on Earth.

Any way you slice it, the cap and trade carbon pricing system moving its way through Washington may turn the tar sands into an investment quagmire.

Signs of trouble are already brewing in oil-addled Alberta. An over reliance on the tar sands mean the once-booming economy is going to contract 2% this year. The government is going to run a whopping $1.4 billion deficit for the fiscal year that just ended.

A recent report from the University of Calgary warns that a fixation on oil is leading to massive deficits and draconian government cutbacks not seen in twenty years.

“We criticize (the government) for allowing its budget to become so heavily dependent on volatile, energy-related revenues–that is a high-risk strategy; it has been tried before and has failed, with dire consequences,” the report states. “It is a mistake the Alberta government must recognize and take steps to avoid as quickly as possible.”

Interestingly, the highly touted “carbon capture” (CCS) solution for the tar sands has also been widely rejected by the marketplace. Nine out of twenty oil companies picked by the Alberta government to access a massive $2 billion fund to develop this dubious technology have since pulled their bids.

Such tar sands heavy weights as Suncor, Syncrude, ConocoPhillips and StatoilHydro decided this “solution” wasn’t worth their investment dollars, even if the taxpayer was also shelling out billions. This outcome is consistent with a secret government memo last year that said that CCS had very limited application for tar sands operations.

That of course has not stopped the Alberta or Canadian government from continuing to talk up the idea, particularly with the US administration. You can the bet the recent influx of public lobbying dollars into Washington will only amp up the decibels.

What’s that spinning sound I hear?

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Disruption

This is a guest post by Zach Roberts.

As a documentary producer, I watch more than my fair share of environmental protest documentaries — probably about 20 a year. And almost all of them have the same, vague message: we need to do something!

Their scenes re-play like a bad video montage in my mind: earnest young people speaking at podiums, boring climatologists rambling on about the coming end of the world, forest fires, melting ice shelves, you know how it goes. In the lefty journalism world, we call this “preaching to the choir.”

Then there's Disruption,...

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