Last month, I traveled to Enbridge's shareholder meeting in Calgary. Outside, laid off oil workers, screamed "Build that Pipe" over a bullhorn, and asked people to honk if they supported Canadian oil.
Those tar-sands workers will likely never have jobs in the industry again. Economists, and even the oil fairy government of Alberta are sobering up to the boom-bust economy of energy projects. It's the bust, and there is no resuscitation in sight. That's the problem.
It's really a race to the bottom and to the end, to be the Last Tar Sands Pipeline. For the past four years, Canada has been trying to build tar-sands pipelines to the U.S., to the Pacific Coast, to anywhere, and it has not gone well. Here are the reasons.
• Tar-sands oil is too expensive. Say you had the most expensive oil in the world, and it was landlocked in northern Alberta. Put it this way, every source of oil in the world is cheaper — much cheaper. According to Rystad Energy oil analysts, the average tar-sands project won't even break even on the cost of getting it out of the ground unless international oil prices rise to $83 per barrel and stay there. In contrast, the average U.S. fracked oil well will break even with oil prices at $46 per barrel. That's the reality.
"Alberta governments have suffered from a type of budgetary delusion over the past decade, a phenomenon that drives up spending and sent debt levels soaring," wrote Chris Varcoe, columnist for the Calgary Herald. "For decades the choice for Alberta governments seemed simple: the province overspent budgets and trusted that energy revenues would fill the gap."
"Alberta is in a very deep fiscal hole," newly elected Alberta Premier Jason Kenney told the Alberta legislature on May 8. "This cannot continue." Economist Ron Kneebone, with the University of Calgary's School of Public Policy echoed those sentiments in the same setting, as reported in the Herald: "My belief is that we won't see another boom. This is it. This is our new reality."
• Tar-sands oil is the dirtiest oil in the world. This stuff is basically asphalt, mixed with dirt. Separating the dirt out results in huge amounts of toxic-waste sludge. The cleanup costs in Alberta will be enormous. Then, the asphalt is mixed with toxic chemicals so it can be pumped to the U.S. Burning tar-sands oil results in more climate poisons than any oil on earth. A recent study by Environment Canada, a government agency, and published in Nature Communications on April 23 found that the tar-sands industry has been hugely underestimating its carbon-dioxide emissions. The emissions are up to 123% higher than reported.
• No one wants a tar-sands pipeline: Two years ago, there were five tar-sands pipeline projects proposed — Enbridge had two, TransCanada had two and Kinder Morgan had one. TransCanada's failed. Energy East Pipeline — the longest proposed pipeline from Alberta to New Brunswick — was not approved by Canada's National Energy Board. Neither was Enbridge's Northern Gateway, which would have cut through pristine watersheds into a set of fjords in northern British Columbia. Both those projects failed in 2017.
