'Dirty Oil' raises its head at an odd time

While the mayors appear to have been targeting the environmental impact of a mixed bag of fossil fuels, oil originating in the Canadian province of Alberta — analogous to the Abu Dhabi's dominant share in the UAE's exports — came in for particular mention.

"The production of tar sands oil from Canada emits approximately three times the carbon dioxide pollution per barrel as does conventional oil production and significantly damages Canada's Boreal forest ecosystem — the world's largest carbon storehouse," said the resolution. As if that was not enough, the Democratic nominee for the American presidential elections, Barack Obama, came out swinging in the same week against what he called "a 19th century fossil fuel that is dirty, dwindling, and dangerously expensive."

None of this would be particularly noteworthy in Canada, especially in an American election year, but for this country's increasing reliance on the tar sands to feel the voracious American oil market. This country's claim to being an energy superpower and the single largest exporter to the US is based largely on its investments in the tar sands and its potential to double output to 4.5 million barrels per day by 2020.

Officials like to point out that although Canada accounts for less than three per cent of the world's oil output, its reserves account for roughly 15 per cent of the known underground wealth — second only to Saudi Arabia's.

At the same time that the American mayors were casting a harsh spotlight on Canadian petroleum, Ottawa's Natural Resources Minister Gary Lunn was wrapping up a meeting of oil exporters in Saudi Arabia where he tried to position his nation as a possible swing producer to ease international crude prices.

"It was recognised that there is an adequate supply of oil reserves that remain for decades to come, but we do need to make strategic investments in development of some of these reserves as well as refining capacity," the minister said from Jeddah. Canada is heavily invested in the US market, with the bulk of its oil exports headed there. Two years ago, the Alberta government parked one of its behemoth oil sands dump trucks on the National Mall in Washington in a high-voltage campaign to bring its reserves to the attention of lawmakers on Capitol Hill. Canadian exports were not seen as 'foreign oil' at the time. It also happened to be a time when Venezuela's Hugo Chavez was doing his own backdoor marketing by handing out his country's heavy oil at rock-bottom prices in impoverished American communities.

The discourse, however, has now come full circle. Even at a time when Americans and Canadians are anguished over the price at the pump and are cutting back on summer travel plans, environmental concerns are animating the debate on oil in both nations.

Energy prices have replaced the environment as a top-of-mind concern, according to recently released public opinion surveys conducted in both Canada and the U.S., and nobody is quite sure how the economy-environment duet will play out.

The criticism from the American mayors took Canadian diplomatic and oil industry officials by surprise. Gordon Griffin, a Canadian ambassador to Washington during the Clinton years, said he was "frankly stunned" by the mayoral censure of tar sands oil, adding that "industry in Canada was caught off guard and similarly surprised."

In his opinion, the industry has not yet recognised the extent to which ecological concerns have trumped other considerations in public perception.

A spokesman for Alberta said his province does not see the dichotomy as a trade-off. "With U.S. lawmakers, we are letting them know that we don't view it to be a showdown between the economy and the environment... We know we have to show leadership on both."

He pointed out, for instance, that the amount of fresh water used to produce a barrel of oil from the tar sands has dropped from five barrels to less than a barrel in the last few years. Greenhouse gas emissions have also come down 45 per cent over the last decade, he claimed.

But it is a tough sell. A Canadian journalist, Andrew Nikiforuk, is set to publish a book entitled "The Tar Sands: Dirty Oil and the Future of the Continent" this fall.

In a preview, Nikiforuk recently argued that there is no way Canada can duck the accusation of "Dirty Oil" because "bitumen, no matter how you spin it, is a corrosive, smog-making, water-fouling, bottom-of-the-barrel product. Make no mistake about it: Canada now faces an intractable political emergency. It can either slow down tar sands development to serve a planned national transition to renewable energy sources, or it can rape the world's last great oil field and put the nation on a road to hell."

George Abraham is an Ottawa-based commentator. Reach him at diplomat01@rogers.com.