Friday, August 21, 2009

Climate vs. Security?

In the last few years I've watched perceptions of US energy security and climate change, the two main drivers of energy policy, converge gradually toward a general sense that smart climate policy will be good for energy security, and vice versa. There's even a growing understanding that a stable climate contributes to national security, distinct from any energy considerations. However, there are still cases with strongly divergent energy security and climate change implications, and a new pipeline that will deliver crude extracted from Canadian oil sands is a prime example. The US State Department's approval of this project looks entirely appropriate and sensible, even if it conflicts with the administration's emphasis on reducing greenhouse gas emissions. Like it or not--and largely because of past decisions concerning our own off-limits oil resources--Canadian oil sands have become an essential pillar of US energy security.

The "Alberta Clipper" pipeline of Enbridge, Inc. could eventually bring up to 800,000 barrels per day of Canadian crude oil to refineries in the US Midwest, as oil sands production in Alberta Province continues to grow. This oil would displace imports from the Middle East and West Africa, which absent oil sands are likely to grow, in spite of increasing biofuel production and higher fuel economy standards for new cars. That's because output from Mexico, our other main local supplier, is dropping sharply, while higher production from Brazil may only offset declines in Venezuela, which has grossly mismanaged its oil sector. Oil sands are already compensating for the steady decline in conventional Canadian oil production, and without them our imports from our largest oil supplier couldn't be sustained at their current level of roughly 10% of US oil consumption--equating to about five times the energy content of current US ethanol production. There is simply no realistic energy scenario for the next 20 years in which we could forgo imports of Canadian crude produced from oil sands, without a corresponding increase in imports from the Middle East.

The main concern cited about oil sands relates to its higher emissions of greenhouse gases, compared to conventional oil production. This is indisputable, though it's important to put those higher emissions into perspective, while also recognizing that technology and an increased Canadian emphasis on these emissions should reduce this disparity over time. The most recent study I've seen on the subject indicates that although the processes for producing useful liquids from Canadian oil sands result in roughly three times the upstream greenhouse gas emissions of the average barrel of US supply, the well-to-wheels lifecycle emissions are only 17% higher than average. In either case, most of the emissions from oil occur when it is burned in vehicles or other end-uses, not during production. While not insignificant, the excess emissions from oil sands can be offset less expensively elsewhere in our energy economy, particularly if the ultimate US climate legislation gives the utility sector the right incentives to cut its CO2 emissions, which are roughly a fifth larger than those from oil consumed in transportation.

Greenhouse gas emissions aren't the only environmental impact associated with oil sands, but we lack any reasonable or consistent way to assess the trade-off between the others and the potential impacts--physical or aesthetic--of increasing our own oil production from the significant resources we have placed off-limits to exploitation, including the Arctic National Wildlife Refuge and the outer continental shelves of California and other states. In effect, American policy makers and consumers have implicitly chosen to ramp up oil output in Alberta to spare other areas of greater concern to American voters. Such decisions have left us reliant on this Canadian energy resource, the incremental greenhouse gas consequences of which can be offset elsewhere. The State Department appears to have reached a similar conclusion.

No comments: