The high price of Asia's hunger for oil

Will Hickey says a pipeline to extract oil from Canada's tar sands must not be approved

PUBLISHED : Tuesday, 16 April, 2013, 12:00am
UPDATED : Tuesday, 16 April, 2013, 3:27am

The battle against climate change will be waged in Asia. This is true even in the case of the proposed Keystone XL pipeline that will unlock the dirty oil from the tar sands of Alberta, Canada, and carry it to refineries on the US Gulf Coast. Getting tar sands oil to Asian markets, particularly China, is the goal. This means China will be burning even more highly polluting fuel and contributing significantly more to global warming.

Tar sands require high inputs of energy and water to make it transportable as "sweet" crude. Besides, these energy inputs (for cleaning, diluting and upgrading the sand) leave pollutants and land damage behind, both in the ground, with massive deforestation, and in tailings in rivers, lakes and aquifers. Conventional oil costs an average of US$5 per oil barrel to produce and refine, but for tar sands, the cost goes up - to three times as much.

Correspondingly, the carbon dioxide emitted during production of the tar sands is far greater than for any conventional extraction methods. Tremendous waste is generated. So much has been written about this that the oil companies now find it hard to justify extraction from a technical standpoint. Outside of Asian demand, there is almost no other reason for this project to proceed.

The facts are these. Today there are 350 parts per million (ppm) of carbon dioxide in the atmosphere. For centuries, the figure held steady at 250 ppm. If we hit 450 ppm, we are looking at a 2-degree-Celsius change in temperature, which could create more storms, droughts, heat waves and floods than is imaginable. This pipeline, if approved, will facilitate the extraction and release of billions of tonnes of carbon dioxide, taking us quickly closer to 450 ppm.

US President Barack Obama is expected to decide this year if the project will go ahead. A rejection would reinforce his pledge that the US is not going to stand idly by while climate change is on its doorstep. The US cannot allow a climb-down from its rhetoric on being the world's exceptional leader.

If Obama allows this pipeline to proceed, it will also give carte blanche to emerging China and India to continue burning high-sulfur coal. It will create a race to the bottom in terms of cheap energy, but the long-term environmental, geographic and human health costs will be staggering. The gloves will come off in a race by all countries to secure more fossil fuels.

In short, these large stocks of carbon must stay locked in the ground. Opening the Pandora's box of unconventional oil is adding to a volatile and dangerous global problem of fossil fuel addiction that is fostering climate change. Obama must take a stand against global warming.

Dr Will Hickey is an associate professor and chair of global management at SolBridge University