"A lot of the oilsands oil may have to stay in the ground."

​       — NDP candidate Linda McQuaig told CBC's Power & Politics

Alberta's oilsands seem to always be a contentious issue both nationally and internationally. It was likely only a matter of time before it became a hot topic on the federal campaign trail.

Comments by an NDP candidate for the riding of Toronto Centre are causing a stir and putting the spotlight on Alberta's bitumen.

Linda McQuaig, a well-known author and journalist, told a panel discussion on CBC News Network's Power & Politics Friday that for Canada to meet its climate change targets much of the oilsands may have to be left in the ground.

The Spin

McQuaig didn't mention any specific climate change targets that Canada has pledged to achieve, but instead spoke about reaching Canada's future environmental goals.

"We'll know that better once we properly put in place a climate change accountability system of some kind," she told host Rosemary Barton. "And … once we have a proper review process for our environmental projects like pipelines."

McQuaig later tweeted that, "NDP policy is sustainable development, overseen by strong (environmental) review process," a policy NDP Leader Tom Mulcair expanded upon in response to questions Monday.

The counter-spin

The Conservatives wasted no time in jumping on the NDP and claiming the party wants to shut down the oil industry and introduce new taxes.

Conservative Leader Stephen Harper accused the NDP of having a "not-so hidden agenda," saying it "is consistently against the development of our resources and our economy."

McQuaig's comments spurred Michelle Rempel, Conservative candidate for Calgary Nose Hill, to accuse the NDP of proposing a moratorium on the oilsands, which would kill jobs at a time of instability in the oil sector.

Stranded assets?

McQuaig's comments certainly ignited criticism from other parties, and clarification from her own party, but she isn't alone in arguing the oilsands resource is unlikely to be fully developed.

The oilsands contain 1.8 trillion barrels of oil, but right now about 168 billion barrels are deemed recoverable with today's technology. Without new developments, the vast majority of the oily bitumen in northern Alberta will stay in the ground.

(As an aside, Saskatchewan also has bitumen oilsands reserves, although some experts question whether it will ever be developed.)

While McQuaig was talking about environmental policy, her comments touch on the broader issue of stranded assets.

In the business world, that's when your assets lose their worth or turn into liabilities. For fossil fuels, the term refers to those resources that won't be burned — those that remain stranded in the ground. Some experts have predicted coal will be the first stranded asset, as countries begin to scale down consumption because of coal's heavy emissions and pollution.

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Fossil fuels around the world are at growing risk of being stranded, according to a report this spring by HSBC Global Research. The firm proposed three reasons for why some will never be extracted: climate change regulations, the economics of low global oil prices and innovations taking place in the renewable energy sector, such as wind energy, solar energy and battery storage.

Economics could be the biggest factor for the oilsands.

Extracting bitumen is more expensive than other forms of oil production. With oil prices having fallen substantially in the last year, some companies have postponed new projects.

"This is basic economics. We have an oil industry, particularly in publicly traded Western companies, that was built for a $100 barrel world and now faces a future where we may not see that price anytime soon, if ever again," said Andrew Logan, director of the oil and gas industry program at Ceres, a non-profit that advocates for sustainable business practices. Logan made the comments while speaking at an investment conference in Banff earlier this summer. 

"We don't see the stranded asset debate primarily being about carbon or climate change; those are important secondary issues," he said.

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If the next federal government brings in new taxes or environmental regulations, it could impact the number of jobs in the energy sector, as the Conservatives have warned. Some oil and gas companies are already complaining about the financial pain they are feeling because of changes brought in by the provincial NDP government in Alberta.

Nevertheless, it is economics that is the big factor in Alberta. The province has lost an estimated 25,000 jobs in the energy sector since September — not because of environmental policy, but because of the plunge in global oil prices.

The rinse

While production is likely to increase over the next few decades in Alberta's oilsands, without a doubt some of the bitumen will never be developed. Commercial production of the oilsands began nearly 50 years ago, and to this day only about six per cent of bitumen reserves have been extracted. There is a long, long way to go.

And while Harper criticized McQuaig for her comments, he himself all but conceded that some oil will be stranded when he and other G7 leaders agreed to an eventual end to fossil fuel use by 2100. Unless oilsands production and technology substantially improve, and oil demand and prices return to sky-high levels, there is little chance all of Alberta's bitumen will be sucked out of the ground before the end of the century.

If further affirmation was needed that some oil, not only in Canada but around the world, will be left untouched, even the world's leading producer is predicting as much.

"We recognize that eventually, one of these days, we are not going to need fossil fuels, I don't know when, in 2040, 2050,... so we have embarked on a program to develop solar energy," said Saudi Arabia oil minister Ali Al-Naimi in May.