A while back, a long while back, the US declared a “war on drugs” in an attempt to shrink the illegal drug trade. In the “ready, fire, aim” way that governments specialize in, they attacked the problem like a donkey attacks a Rubik’s cube.
That was in 1971. Today, the “war” remains in the sense of the mythical Japanese soldier on a deserted island that doesn’t know World War II has ended yet. The Obama administration officially dropped the term because it was “counter-productive” which is true in the same sense that spanking a mafia don is counter-productive. Even then, the Drug Policy Alliance estimates the US spends over $50 billion a year on the program, money which appears to be fertilizing the drug trade, or at best pestering it.
The problem with such schemes is that the focus is on supply – that wiping out supply solves the issue. It emphatically does not, as long as demand still exists. This was shown true during prohibition, verified again with drugs, and now we’re having to face it again in the fossil fuel war years.
There is a hair-raisingly stupid movement afoot to keep a certain percentage of fossil fuels in the ground to meet a 2-degree threshold in global warming. It’s not stupid because it wants to address the pollutive effects of burning those fossil fuels, it’s stupid because it’s attacking the wrong issue, like fighting shoplifting by making a store’s goods worthless.
The plan to curb emissions by limiting supply – by slowing development of a few of the world’s proposed pipelines, for example – doesn’t work, because demand continues to climb, year after year. The growth will plateau at some point, but when is not evident yet. Yes, there are now 2 million electric vehicles on the road globally, with plans for millions more – but there are two billion petroleum powered ones. And many of the so called “electric vehicles” being sold today are actually “electrified” – hybrids that still have internal combustion engines. (When Volvo announced plans last year to have all its vehicles electrified by 2019, the media leapt as the story incorrectly, implying time and again every single future Volvo would be a fully electric. Volvo actually said they would be hybrids or all electric – a considerable difference, but an error the company clearly didn’t mind at all.)
Cutting off oil supply to limit consumption invokes one of the more dependable truisms in economics – reduced supply simply drives up prices, which will in turn encourage more oil production. The war on fossil fuels can somewhat effectively hamper goofy defenseless targets like Canada’s oil sands, because the battlefield is handy and Canada is way too affable. But higher prices will cause oil to ooze out of every crevice of the globe and from deep under the oceans, in jurisdictions that worry more about food, shelter, and coups than whether this year was hotter than 5 years ago.
But, as always, there are deeper issues at play here. Many of the key “change agents” are far more interested in hurting the fossil fuel industry for various historical reasons than they are in doing anything about climate change.
In one article, legendary activist Bill McKibben gloats that the efforts to block the Keystone pipeline “meant that expansion of Canada’s tar sands suddenly, sharply slowed.” Oil prices falling from $120/barrel to $30 had very little to do it, according to McKibben, which would be news to the entire industry. Elsewhere in the piece, we see what he’s really about: “Most of that oil and gas-most of the money-is concentrated in a few underground pools of carbon…these are the ‘carbon bombs.’ If they go off – if they’re dug up and burnt – they’ll wreck the planet…Take the Koch brothers, for instance: They’re among the largest leaseholders in Canada’s tar sands and plan nearly $900 million in political spending during 2016…”
So many points in the article are not blatantly wrong, but either partially wrong or cleverly distorted so as to defy serious dissection. The oil sands, for example – a 140,000 square kilometre bomb, that could be “dug up and burnt”? Sure, in several hundred years with trillions dollars of capital, and 50 times the number of pipelines now in existence. But that talk is boring; discussing a ‘carbon bomb’ that could ‘go off’ does a far better job of stirring primordial fears.
The article paints a comprehensive picture of not just his sheer ignorance of the petroleum business, but the fact that he doesn’t care, and that he has a far different agenda, not unlike the Koch brothers. He’s trying to drag energy into the realm of politics and religion, to make it a morality issue. Which, would be fine, if Mr. Bill was 100 percent off the grid, lived in a tiny house, and traveled only by foot. Then he would be walking the talk, and be worth listening to.
McKibben is far too clever to get caught in that sort of logic trap though. Talk of consumption is not on his group’s agenda, which is directly where it would be if one considered 100 million b/d of daily consumption as important. That is where GHG/CO2/pollution comes from, after all. That doesn’t sell, but creating a villain – now that gets some press. That’s his tactic which we can’t do anything about, but we certainly can do better than give the nonsense a free rein.
It is therefore possible to agree with this part of his ilk’s agenda so that it can’t be used as a weapon anymore: we can quite certainly say that 90 percent of oil sands oil will remain in the ground, a statistic which must surely force the termination of these ludicrous ‘carbon bomb’ analogies.
That statistic is likely conservative; in all probability, more like 95 percent will remain in the ground. The math is fairly straightforward, not hard to understand, and hard to twist. Currently, oil sands output is about 2.5 million barrels per day, which generates apparently 75 million tonnes of CO2 (or whatever) per year. The oil sands have also been singled out for a carbon emissions cap of 100 million tonnes per year (of whatever it is that’s bad). If development resumed when higher prices return, this would equate to possibly 3.5 million b/d of production or thereabouts.
At that much higher rate, we would produce 10 percent of oil sands oil in…140 years. Even if opponents claim that they’re talking about 80 percent of recoverable reserves (disingenuous but certainly not impossible), we then could still produce at today’s rates for almost another 50 years. And even Jason Kenney talks about oil being dominant for maybe another generation; beyond that natural gas or renewables are expected to dominate by almost everyone.
So the oil sands are conclusively not the environmental nightmare they’re made out to be. It’s only a ‘carbon bomb’ if the whole thing was dug up (1.8 T barrels) and burnt in a few decades, which is a notion so dumb that it can’t be analyzed critically. Almost all of it will remain in the ground, and if more pipelines get blockaded as oil prices rise, the stuff will simply move in rail cars, and the only losers will be (or, remain) Canada’s economic self-interest. Of course, clever tacticians have been hard at work with absurd assassination back-up plans (“it’s toxic,” “it’s more corrosive,” “it sinks, it won’t float” and so forth), and those can be dealt with as easily, but that’s enough for today.
The oil sands were developed because the world wanted the oil. The reserves are marginally (marginally) more energy intensive, they’re not dangerous, and not a bomb. Development isn’t a ploy by mega-rich industrialists; it’s supply and demand, with the supply coming from one of the world’s most scrutinizable jurisdictions. Everyone should be fortunate the oil sands are in Canada and not, for example, in some vodka-soaked elsewhere.
Read more insightful analysis from Terry Etam here. To reach Terry, click here