Alberta warns U.S. will pay more for fuel if it snubs oilsands
Last Updated: Thursday, June 26, 2008 | 10:20 AM ET
The Canadian Press
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Alberta is firing back at U.S. politicians who think that the province's massive oilsands projects create "dirty" energy products that should be avoided to protect the environment.
Energy Minister Mel Knight says American lawmakers will likely feel a backlash from consumers if they stop buying fuel derived from oilsands bitumen and turn to more expensive offshore oil or alternative fuels.
"You start jacking up the cost of food and fuel to ordinary Americans, would that be in everybody's best interest? I think not," Knight told reporters Wednesday.
The minister was reacting to news reports that presidential hopeful Barack Obama is now talking about curbing imports of "dirty" oil from various sources, including Canada's oilsands.
Earlier this week, America's big-city mayors passed a resolution urging a ban on the use of fuel from the oilsands in municipal vehicles.
These statements, along with the recent federal Liberal proposal for a carbon tax that would put a heavy toll on Alberta's oilsands plants, caused one of Alberta's most powerful politicians to concede Wednesday that the province could be facing an economic calamity.
"This environmental runaway train that's coming at us has the potential to put Alberta's economy in great economic peril, there's no question about it," Treasury Board President Lloyd Snelgrove told a radio talk show in Calgary.
Snelgrove did not return phone calls after appearing on CHQR to elaborate on his comments during the broadcast.
Canada is now the largest supplier of oil to the U.S. and Alberta is campaigning to improve the image of the oilsands, which is one of the largest sources of greenhouse gas emissions in Canada.
Knight says Alberta provides 1.4 million barrels of feedstock annually to U.S. refineries that produce fuel for various uses, including transportation and agriculture.
But Jason Change, an aide to the minister, later explained that curbing the flow of oilsands energy products to the U.S. may be more difficult than just shutting off a tap.
"Most U.S. refineries use a variety of feedstocks," said Chance. "They're processing both conventional oil and synthetic crude produced from the oilsands at the same time."
Knight concedes Alberta needs to do more to help Americans and others around the world understand that the province is taking action to reduce oilsands emissions.
The keystone to Alberta's emissions reduction strategy is a plan to capture carbon dioxide and permanently store it underground. But the minister says this is a massive undertaking that requires more research and significant investment by government and industry.
"You won't put steel and concrete in the ground tomorrow," said Knight. "What we have in front of us is an opportunity between now and 2015 to do some very major pieces of work that will attract attention globally."
However, Snelgrove says Alberta may be forced to kick-start carbon capture projects with taxpayer money to show the rest of Canada and other nations that the province is taking significant action on emissions.
"If we have to spend $1 billion or a number that's large to maintain economic viability, we need to be able to do that," Snelgrove told the CHQR radio talk show Wednesday.
Knight says Alberta's $25 million campaign aimed at U.S. consumers and others includes the message that emissions from any type of oil are created mostly by the consumer, not from the processing of the oil or bitumen.
"Eighty per cent of the greenhouse gas that's going to be emitted relative to that barrel of oil comes from a tailpipe some place or an exhaust stack," said the minister.
But Liberal Leader Kevin Taft says Alberta has been foot-dragging for years on reducing emissions and this lack of action is now under the spotlight across North America.
"Mel Knight sabre-rattling against Barack Obama or the White House isn't going to get us anywhere," Taft said in an interview. "We're not going to fool those people with multimillion-dollar propaganda campaigns."
Taft says what's at stake is Alberta's standard of living and the future prosperity of the province, which relies heavily on the energy industry and especially the oilsands for both jobs and revenues.
"The best response is to solve the problem," he said.
Premier Ed Stelmach is heading to a meeting of western U.S. governors this weekend with the message that there is "a lot of misinformation and misunderstanding" being circulated about the impact of oilsands projects on the environment.
Stelmach says Alberta is a leader on several fronts.
"For example, no other jurisdiction has legislated caps on emissions by industry," the premier said Wednesday.
But critics have charged that Alberta is simply reducing the overall intensity of emissions, which will actually increase for at least another decade as new oilsands plants are built or expanded.
But the premier is continuing to spread the message to Americans, as he did in January during a trip to Washington, that "Alberta is a safe and secure supply for American energy needs."
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