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No Slick Response: Obama And Canada's Oil Sands

Katherine Michonski is a research associate for energy and the environment at the Council on Foreign Relations.

Canadian Prime Minister Stephen Harper is eager for an audience with Barack Obama, and, luckily for him, he'll soon get one when the new president makes his first head-of-state visit to Canada on February 19. Harper is especially anxious to discuss Obama's campaign pledge to wean the United States off "dirty, dwindling and dangerously expensive" oil, which many Canadians interpret as a slight against Alberta's carbon-intensive oil-sands industry. The reigning opinion in Canada is that Obama will speak out against the greenhouse-gas-heavy fuel, forcing Harper to make a hard sell to the president, most likely couched within some kind of "climate pact" between the United States and Canada.

It's not likely to be an easy topic for an administration that is concerned with both climate change and energy security. While sometimes the two goals can be addressed with the same action (energy efficiency, say), sometimes the two are in stark conflict—and oil sands are a perfect example. Some officials on Obama's energy team, such as national security advisor James Jones (who was picked, Obama said, for his understanding of the "connection between energy and national security") will stress the energy-security side. Canada is, after all, our number-one oil supplier. With proven reserves second only to Saudi Arabia, Canada supplies us with 1.8 million* barrels of oil per day—20 percent of our daily imports. And when we buy oil from Canada, we needn't worry about sponsoring dictatorships or sending money to questionable allies.

Last fall, Jones gave an (off-the-record) speech in Banff, Alberta, to a group of business leaders and government officials touting the importance of Canada's oil sands to America's energy security. At the time, Jones was president of the U.S. Chamber of Commerce's energy institute, which promotes the development of a long-term energy strategy that "ensures affordable, reliable and diverse energy supplies" including oil shale, oil sands and other unconventional fossil-fuel sources. In Jones's view, the diversity and security of supply that oil sands provide should trump the environmentally negative consequences of its production.

On the opposite end of the spectrum sit the disciples of Al Gore (some literally, some figuratively) who are likely to argue against the import of any carbon-intensive energy source. Obama's new climate and energy czar, Carol Browner, initiated efforts at the EPA during the 1990s to regulate carbon-dioxide under the Clean Air Act, a task which the new EPA administrator, Lisa Jackson, may end up finally carrying out. Similarly, new Council of Environmental Quality chair Nancy Sutley's strong environmental record doesn't bode well for the dirty oil industry.

These officials will likely argue that the energy-security benefits Canada's oil might provide are outweighed by its negative environmental impact. Oil sands oil isn't exactly your father's oil. Because the oil needs to be separated from sand and then heavily refined, the production process is extremely energy-intensive, creating 10 to 30 percent more emissions per barrel than conventional light oil, according to one RAND estimate. Not to mention it takes about two tons of mined material to produce one barrel of oil during the surface-mining process. Separating the oil from the sand and other contaminants also requires large amounts of water and a good deal of natural gas to power the extraction process. Browner and crew are rightly skeptical about endorsing any project that is so emissions-intensive at a time when they're trying to get climate legislation passed here at home.

Others, such as Energy Secretary Steven Chu, will argue that supporting oil sands diverts domestic attention away from renewable-energy development, which Obama recently declared to be our new national mission. It seems problematic to sponsor the development of new energy-intensive oil supplies while DOE is trying to research alternatives to oil. On the international front, meanwhile, Clinton's new climate envoy Todd Stern will have a tough time convincing China and other developing countries to stop building coal-fired power plants if the U.S. is supporting emissions-intensive oil production just north of its border.

It remains to be seen how these viewpoints will be reconciled, but neither Harper nor Canadian environmentalists should assume Obama will automatically agree with them. Of course, Obama could also dance around the issue and avoid a direct confrontation with Harper on oil sands. It may well be that Obama's support for congressional action on a national low-carbon fuel standard will preempt the need for any executive announcements on the issue. But regardless, the climate impact of oil sands development merits a serious debate between the United States and Canada; the February meeting will provide an opportunity for both countries to have a candid conversation on how best to balance energy security and climate change needs. Obama's first words on this issue should not be missed.

--Katherine Michonski