Today was not a good day for the Alberta government’s PR machine. An editorial in the New York Times this weekend leads with the headline, “No to a New Tar Sands Pipeline.” Yes, they said tar sands. No, this was not some fringe, west-coast internet publication or a Greenpeace pamphlet, but the New York Times. Apparently Alberta’s message didn’t get through.
Perhaps the millions spent on a PR campaign would have been better spent deploying the world class monitoring system we sorely lack, and which we are now told will cost only $20 million per year. We need monitoring, we need enforcement of existing regulations, and we need credible, binding regulations to get rid of the tailings ponds. We need our companies to be competing on environmental performance, and we need it now. At triple digit oil prices, this is not only possible but essential for our future.
Alberta is a small province in a small country, in terms of population. We are sitting on the 2nd largest oil reserves in the world. Statistics Canada tells us that the bitumen which we could extract with today’s prices and technology is worth over $400 billion, or over 12000 per capita. That’s more than all of our other oil reserves, our coal and our natural gas reserves are worth, combined. That number is certainly higher today, with triple digit oil prices and improving technology. The bitumen buried in the ground in Northern Alberta makes up at least 15% of the tangible wealth of every man, woman, and child in Canada today, and that figure will almost certainly grow if you believe in sustained high oil prices. The kicker is that the only way you can realize that value is by getting the product to market, and we will not be able to do that for long if we count on energy security and arguments about ethical oil to win the day. It’s clearly not going to be enough.
The New York Times does not set energy policy in the US, which is a good thing for Alberta. Keystone XL may still go through, since the regulatory precedent which will carry the day is favorable. That said, as one of 3+ million owners of the resource, I hope that the Alberta government and the federal politicians on the election trail see that the only way to win the PR battle is to first get serious about regulation.
The oil sands are the legitimate engine of the Canadian economy and are the key to our future prosperity. It’s time for industry to stand up and start acting like it and for the government to start holding them to account if they don’t. The oil sands industry is not marginal, and it’s not going anywhere. It’s 50% of the world’s investable oil so, while we can’t name our price, we can set the rules and expect them to be followed.
We can no longer gamble the wealth of our country in order to save a few cents per barrel today. If the New York Times editorial board thinks that oil produced in Northern Alberta’s “tar sands fields” is not a reasonable substitute for Middle Eastern oil (and let’s remember that the recent history of New York does not generally lead to them turning a blind eye to the ills of the Middle East), we have a serious problem. Let’s fix it.