Kyotomotors is back! Check in Wednesdays for commentary on the age of abundance, climate change
and the dawning of the post-carbon eventuality...

Friday, January 17, 2014

Kudos to Neil Young!

According to the official line, the “Canadian Oil Sands” is some kind of sacred cow of economic prosperity. By “official line”, of course, I mean propaganda, which in this case uses the word prosperity with an almost smug tone to an excessive degree. Prosperity has many criteria, however, and the official version may not stand up to scrutiny, when put to the test. But of course scrutiny is not the job of propaganda. That job is up to us, including, but not limited to the likes of Neil Young.
Kudos to Neil!
In my last post here I applauded the stand taken by Montreal indie musicians, Godspeed! You Black Emperor, for their direct and unequivocal statement about corporate interests in the arts and climate change in general. Now, Mr. Young is making an even bigger scene, with the courage one would wish leaders in other arenas might one day display. An entire book could be written on the question as to why it falls on artists to be among the most prominently vocal dissenters, but more important is the question as to why there are so few artists, and so few people in general – especially of the boomer generation to which Neil Young belongs – objecting and otherwise protesting the development of the Athabasca Tar Sands. I have tried in my own way to be one of those artists, and I encourage you, dear reader, artist or not, to do the same in your daily life.
For starters, let’s cut the crap about “oil sands”. Oil, it is not – and I will elaborate on this point momentarily. A more accurate, albeit less palatable term is “tar sands”. It reminds us of the actual nature of the resource, and, by way of legitimate negative connotation, of the drawbacks associated with it. Sadly the media have capitulated on the point, referring to the stuff obediently as “oil sands” ever since the Conservatives won a majority, or so it seems to me.
By the way, I also insist on referring to the Tar Sands region as the Athabasca, and not as Fort McMurray, out of respect for the First Nations people who first named the place, and who, incidentally are among the most directly affected by the pollution flowing from the industry there. It is an obvious measure, and the very least we might do to help counter the propaganda we are being fed.

But maybe you are not convinced. Why should we take a closer, deeper look at this supposedly promising industry?

The main reason is that we, under the current “leadership”, are collectively investing in the tar sands as the backbone of our economic future. This is the dawn of Harper’s dream of the great Canadian petro-state, like it or not. The so-called prosperity, however, has a downside: many drawbacks, and unsavoury consequences that we will have to live with for generations to come. “Tar” represents thinking about this darker aspect of the so-called prosperity. “Oil” represents the wishful thinking that pretends away the problems while focusing on the money.
After all, the free market logic will always focus on the money, on the sheer volume of “oil” and on the jobs that will stem from the industrial development, effectively acting as a bribe, so as to collectively ignore the downside and consequences represented by the word “tar”. (More on the economics of “tar” below…)
But first, more on the Tar itself:
Unlike our beloved oil, this resource is not “light and sweet”. Rather, it is cruder than crude, and it sits in the ground in the most inconvenient of ways, requiring some of the most industrially intensive methods of extraction on the planet. There may be a lot of it, but the advantages of abundance, if any, are hampered by some pretty undeniable facts and hurdles of natural physics. For one thing, the drawdown of fresh water, and the resultant contamination and storage of waste water is a huge problem, increasing with every passing year whether production increases or not.
And then there’s the carbon emissions factor. Long before a litre of gasoline distilled from Athabasca tar sands (synthetic crude) reaches a gas tank, say, in Toronto, it has a carbon footprint of shame that Canadians who are still concerned about climate change should shun. A country that at one time at least pretended to care about global warming is slowly slipping down a slope toward the position as the planet’s worst emissions offender.
Of course, the crude products flowing from the Athabasca region also have to get to market, and we are currently discovering that the risks associated with pipelines and tanker trains are significant, already having blackened the shiny veneer of our new found prosperity…

Of course, if you’re on the side of the fence that reaps the economic dividends (the bribe) of the production, you’re unlikely to be convinced, swayed, or otherwise sympathetic to these expressions of dissent and opposition. There is however some serious scrutiny that challenges the conventional wisdom behind the economics of the Tar Sands project.
It just so happens that there are other drawbacks associated with tar sands production that you rarely hear about in the national energy conversation, and they are ultimately economic in nature, casting doubt on the long term viability of Tar Sands extraction in the first place.

Setting the stage: peak oil and price
Forget the hoopla surrounding the new era of energy independence and the miracle in fracking for oil. (I’ll not go on about it here, but I’ll soon touch on this with another post). Global conventional crude oil production has peaked (circa 2006). What has followed has been the predictable attempt to make up the shortfall (continued growth) through other means. The resultant narrative is the story of both fracking, and of the Athabasca Tar Sands, sold to us (by means of state and industry propaganda) as the solution to our woes. Crucial to the story though, is the price spike caused by ever diminishing supplies of the cheap and easy-to-get oil (That’s what happens after a peak). The current $100 a barrel price makes for barely profitable operations up in the Athabasca, and keeps Harper’s fantasy about prosperity afloat. But as much as it is afloat, the new era in oil ain’t like the good old days.

Flow rate
Part of the Athabasca Tar Sands fantasy was always about a 5 million-barrels-a-day rate of extraction, which has still not been achieved. Because Tar trapped in sand does not flow like crude oil, increasing flow rates is a stupendously gargantuan, and costly proposition dependent on inputs of energy and water, both of which act as limits on the ultimate output of synthetic crude. As sure as five million barrels a day is the dream, seven or ten million barrels a day is at best a pipe dream, or at worst, a nightmare scenario.

A closer look at the aforementioned “most industrially intensive methods of extraction on the planet” brings us to the issue of energy inputs, revealing the biggest economic shortcoming of the operation: In order to get to the true economic cost of the Tar Sands we have to consider something called EROEI. This acronym is a scientific measure used in the industry referring to the “energy return on energy invested”. It is useful because it effectively circumvents the abstractions and distortions you get when the economics of energy extraction are measured in money. The principle amounts to this: for every unit of energy extracted, we have spent x units of energy up front. In economic terms, it measures the true dividends of any given energy operation. As an example, light sweet crude extracted from a conventional Albertan oil field would have yielded an EROEI of anywhere from 80:1 to as much as 100:1. That’s a serious profit margin indeed. By comparison, the EROEI of the Tar Sands is a mere fraction of its light sweet cousin’s. It also happens to be harder to measure, given the complexity of the operations, but the average estimates seem to be around 5:1. Not only is this a dismal return that is unlikely to change over time, it also happens to be less than the EROEI of both wind and solar, which sit each at about 8:1.

Without an emotional investment in the oil industry, you would think the famed “invisible hand” and its partner, the rational consumer, would gravitate to other ways of investing their energy than in Tar.

We should be asking a string of hard questions.

Is this the best way in which to invest our current energy resources?  After all, with such poor EROEI numbers, it is not all certain that the benefits outweigh any further drawbacks not measured by EROEI, such as environmental impacts. Is this resource truly the backbone of economic prosperity, or are we  investing in an plan with no real dividends?

We must also ask ourselves “why do we even need it?” Or better, “why do we think we need it?” Why does the conversation surrounding energy always involve the illusion/dream of sustaining the current patterns of consumption at all cost?

Those current patterns are based on the fantasy that we can all have our own personalised car-centered consumer “lifestyle” with nothing but optimism about the future. We have been trying to realise that dream for 60 years now, and where has all the optimism gone? It left upon the arrival of a realisation that the dream comes with costs, borne first by the pocketbook, and later by the biosphere, as we force the ecosystems that support us to absorb all our “externalities”. Ultimately Nature has a say as to how much we can extract, consume and how much waste we can throw back at her.
Politically, we too have a say as to how much “oil sands” nonsense we are willing to accept. Will we have the courage to accept the costs of saying “no” to the Athabasca Tar Sands project?

More on that crucial question in a future post…

No comments:

Post a Comment