Environmental Groups Want Canadian Oil Sands Permits Blocked

Several pipeline companies are pressing ahead with plans to transport additional volumes from Alberta's oil sands to refineries in the US.

However, environmental groups are urging Secretary of State Hillary Clinton to block the permits needed to transport the oil across the Canadian border to US delivery points.

The Alberta Clipper pipeline, sponsored by Enbridge, began construction this month and is expected to start deliveries in mid-2010 to connections in Superior, Wisconsin.

Up to 450,000 barrels of crude oil per day could be transported on the 1,000-mile route originating in Hardisty, Alberta.

The Alberta Clipper system would be expandable to 800,000 b/d, adding to existing capacity in the Enbridge pipeline system that currently connects the oil sands with markets in eastern Canada, New York, and the US Midwest.

"With supply from Western Canada oil sands developments expected to grow by as much as 1.8 million b/d by 2015, the industry has asked for more capacity out of the oil sands and into the US Midwest markets," Enbridge says.

"Oil sands producers and refiners require assurance that adequate pipeline infrastructure will be in place to serve their projects when they come on stream," the company adds.

Meanwhile, TransCanada is in the process of constructing the Keystone oil sands pipeline. This will stretch 2,150 miles from Alberta and pass through the Dakotas, Nebraska, Kansas, Illinois and Missouri, with a possible extension to Kansas and Oklahoma.

Keystone is scheduled to place 435,000 b/d of capacity in service this year, increasing to 590,000 b/d by 2011.

Although Canadian oil production has declined in recent months, Canada supplies almost 20% of US oil imports and has been sending increasing volumes to the US since the 1980s.

However, the oil industry and environmental groups are at loggerheads over the greenhouse gas emissions caused by the production and consumption of petroleum from the oil sands.

A coalition of 18 environmental groups are circulating petitions and writing letters to the US State Department to express concern that additional supplies from the oil sands oil will increase US dependence on fossil fuels.

Environmentalists have long argued that the oil sands emit three to five times more greenhouse gases than conventional oil during production. They also say that oil sands operations destroy forested areas and use large amounts of natural gas and water.

"Because of a dubious executive order, issued by [President] Lyndon Johnson, the Secretary of State can approve this pipeline if she finds that it is in the national interest," said Kenny Bruno of Corporate Ethics International, one of the groups calling for rejection of the permits.

"The [Alberta Clipper] pipeline is the latest piece of infrastructure in a planned network of pipelines and refineries that will lock the US into a high-carbon fossil fuel infrastructure for decades," he cautioned.

Oil industry leaders disagree, citing recent studies from IHS Cera and the Council on Foreign Relations which found that the lifecycle emissions associated with the oil sands are largely overstated.

Furthermore, members of the American Petroleum Institute in Washington say the Alberta Clipper and Keystone projects could each create 3,000 US jobs during construction while bolstering North American energy security.

"There's nothing new about Canadian oil sands oil coming into the United States," said Jane Van Ryan, a senior communications manager at the American Petroleum Institute (API). "It's been transported to this country for decades and currently accounts for more than 1 million barrels a day of US oil imports."