The Athabasca Tar Sands: a crime against future generations?

SPECIAL STUDY TOPIC 

(in partial fulfillment of the requirements for a Masters in Transnational Organized Crime, 'Crimes of the Powerful', 
January 2011 - Daniel G. Pugh, full version available upon request)

To what extent can the growth of the Athabasca Tar Sands in Alberta, Canada be said to represent a crime against the future generations.

INTRODUCTION

As industry has expanded to meet the demands of the global economy so has the need for oil and gas. Issues arising from this growth include whether the excesses of exploiting natural resources today infringe on the rights of future generations as fossil fuel emissions are causing dramatic changes to life on earth and continued exploitation reduces energy futures. Rising in prominence in the oil and gas industry are the Athabasca Tar Sands in Alberta, Canada receiving considerable geopolitical and economic attention for their enormous potential and increasingly affordable access. It is important to understand the externalities that have brought the demand for tar sands oil onto the world stage and then to consider how the myriad consequences resulting from the oil extraction process impact the environment and livelihoods and whether these constitute a crime against future generations.

The increase in global demand for oil and gas has relevant effect on the importance of tar sands reserves. Estimates on current global dependency on oil suggest 40% for energy use and 95% for transportation (EndOilAid, 2010). The Athabasca tar sands are thought to be the largest hydrocarbon deposits and second largest recoverable oil reserves in the world after the Saudi fields with a volume potential of 175 to 200 billion barrels of oil (McCullum, 2006:10).

The viability of the Athabasca tar sands is dependent on the cost of extraction which is estimated to be US$9 -14 per barrel of WTI1 (National Energy Board, 2006: 3) versus the price of oil. During the 1990s and 2000s and even as demand grew the price of a barrel of WTI remained relatively stable hovering under US$25 per barrel (WTRG Economics, 2009) and so related to the cost of extraction it was uncompetitive to buy tar sands oil compared to extraction costs of US$1 per barrel from Saudi fields. Amidst concerns over limits to supply caused by extreme weather events and instability in oil producing nations the price of oil started to show significant increases in the mid-2000s peaking at US$132 per barrel in May, 2008 (Ibid). As a result the economics of tar sand oil extraction started looking much more attractive, the National Energy Board indicates that US$35-35 will bring a 10% rate of return to producers (National Energy Board, 2006: 5). The current cost for a barrel of Texas Crude is US$91.54 (Bloomberg, 2010).

Another dominant externality explaining the recent rise of tar sands prominence is geopolitics. The shift in US energy policy and that of China to decrease their dependency on Middle Eastern oil sources has focused interest on the Athabasca tar sands. This is a shift for the USA who many believe invaded Iraq “which arguably had more to do with securing greater control over Middle East oil deposits than fighting the war on terror”(Clarke, 2008: 9). The Bush era policy to look closer to home for oil (McCullum, 2006: 5) continues under the Obama administration; in 2009 the USA State Department approved the development of the Alberta Clipper pipeline to carry crude oil from the Athabasca fields “increasing the diversity of available supplies among the United States’ worldwide crude oil sources in a time of considerable political tension in other major oil producing countries” (U.S.Dept. of State, 2009). PetroChina is 40% underwriter of the controversial Enbridge Northern Gateway pipeline that will open a major tanker port at Kitimat, British Colombia bringing over 200 tankers per year through dangerous waters along a pristine wilderness coastline on a route normally plied by cruise liners. (McCullum, 2006: 15).

The tar sands became economically viable and geopolitically important when the world reached ‘peak oil’ probably the dominant externality in tar sands development.  Tony Clarke (2008) explains that, peak oil means the extraction of oil from conventional sources has peaked, from now on to meet future energy demands non-conventional means (like tar sands extraction) will increasingly need to be exploited (Clarke 2008:10). The future holds higher financial and environmental costs.

Costs and future threats can be viewed as harms, damaging the global environment, the ecology of northern Alberta and the health, livelihoods and social well being of locally-based communities as well as compromising the energy security of Canada.(Hatch, 2008),(Greenpeace Canada, 2008),(Greenpeace Canada, 2009). It seems clear with the litany of harms being meted out to the environment and local communities that we can assume Trans National Corporations involved in tar sands development are not interested in the needs of future generations. This follows the logic of Ramsay (1984) cited in Cartwright (2001) asking what could be assumed when there seems to be unfair advantage in the market place. Cartwright goes on to suggest that when this happens, further regulation is needed (2001: 5 -6) and indeed this is the case in northern Alberta.

Viewing the situation through the lens of opportunity perspective, criminality of tar sands activity is hard to ascertain when the weak regulatory regime allows for the installation and continuation of industrial processes that pollute the air and water jeopardizing the health of communities and the ecosystem ((Hatch, 2008: 19). For example the Fisheries Act and Canadian Environmental Protection Act could together prosecute companies for toxic seepage into waterways from tailing ponds. Currently the federal government leaves monitoring up to provincial regulators who in turn ‘require’ companies to self monitor seepage and pollution of waterways (Environmental Defence 2010b:10 -11),(Hatch, 2008: 22). This passing of responsibility betrays the sincerity of Canada’s policy makers and politicians who have a well-established record of close association with business for personal advancement and lobbying on behalf of corporations against the interests of the public (Stewart, 2010). The Polaris Institute provides evidence in a profile of Enbridge Inc3 that describes “widespread political lobbying and influence in Canada” and the revolving door method of recruitment from within politics and government and back to business demonstrating their modality of operations in Canada (Girard, 2010: 37 - 41).

Certainly the situation provides considerable opportunity for companies to act outside of ethical boundaries (in the absence of regulation) but it also provides for a normalization of deviance and questionable corporate practices. The idea that companies can act beyond reproach, is akin to (and likely part of) the culture of complacency that is emerging as a significant causal factor in the Deepwater Horizon incident (National Oil Spill Commission, 2011). After years of lobbying by environmental groups, the Commissioner for the Environment and Development admitted in December 2010 “there are unacceptable gaps in the federal monitoring of fresh water” (Vaughn, 2010: 2). Reacting to this report and one by the Royal Society of Canada (2010) (and possibly now worrying about future liability issues) the federal government has ordered the immediate implementation of appropriate monitoring mechanisms in Alberta (Simieritsch, 2011). 

CONCLUSION

The extent of criminality of this activity in the oil and gas industry is not perhaps the pertinent question for the present although it may be in the future. Economic interests presently drive and motivate the people involved in TNCs and government, raising ethical and moral questions about harms that show a disturbing disregard for future generations. It seems the popular way of thinking is that technology will solve everything and that our present activities will simply be managed in the future, a simplistic and naive perspective. Ironically it may be globalization that comes to the rescue. There has been much recent criticism in Canada for failing to ‘harmonize’ with other countries especially the USA where the Environmental Protection Agency is making clear moves to regulate green house gas emissions in industry (McCarthy, 2011). If the Canadian government can shift from an approach that does not account for future generations to one that does then perhaps there is hope for the future. In the Athabasca tar sands, what may be immoral today may be illegal tomorrow.

BIBLIOGRAPHY

Bloomberg, 2010. Energy & Oil Prices: Natural Gas, Electricity and Oil - Bloomberg. Available at: http://www.bloomberg.com/energy/ [Accessed January 15, 2011]. 

Cartwright, p, 2001. Consumer protection and the criminal ... - Google Books, Cambridge: Cambridge University Press. Available at: http://books.google.com/books?hl=en&lr=&id=I-jcxhRy1ewC&oi=fnd&pg=PR9&dq=cartwright+2001+consumer+protection&ots=EvN6Ct4R7x&sig=Uv-faFhmy5-0a-tPrqTBfpRg-Gs#v=onepage&q=cartwright%202001%20consumer%20protection&f=false [Accessed January 17, 2011].

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Environmental Defence, 2010. Duty Calls: Federal Responsibility in Canada’s Oil Sands | Environmental Defence, Toronto: Environmental Defence. Available at: http://environmentaldefence.ca/reports/duty-calls-federal-responsibility-canada%E2%80%99s-oil-sands-0 [Accessed January 12, 2011].

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Greenpeace Canada, 2009. Threats: Energy security | Greenpeace Canada. Available at: http://www.greenpeace.org/canada/en/campaigns/tarsands/Resources/Fact-sheets/Threats-Energy-security/ [Accessed January 21, 2011].

Greenpeace Canada, 2008. Threats: Social costs | Greenpeace Canada. Available at: http://www.greenpeace.org/canada/en/campaigns/tarsands/Resources/Fact-sheets/Threats-Social-costs/ [Accessed January 21, 2011].

Hatch, C. & Price, M., 2008. Canada's Toxic Tar Sands: The Most Destructive Project on Earth | Environmental Defence, Toronto: Environmental Defence. Available at: http://environmentaldefence.ca/reports/canadas-toxic-tar-sands-most-destructive-project-earth [Accessed January 20, 2011].

McCarthy, S., 2011. U.S. to impose new emission rules on power plants, refineries - The Globe and Mail. Available at: http://www.theglobeandmail.com/news/politics/us-to-impose-new-emission-rules-on-power-plants-refineries/article1855631/ [Accessed January 17, 2011].

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National Energy Board, 2006. NEB - Energy Reports - Canada's Oil Sands - Opportunities and Challenges to 2015: An Update - Questions and Answers, Calgary: National Energy Board. Available at: http://www.neb.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/lsnd/pprtntsndchllngs20152006/qapprtntsndchllngs20152006-eng.html [Accessed January 17, 2011].

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Price, M., 2008. The Tar Sands Leaking Legacy, Toronto: Environmental Defence. Available at: http://environmentaldefence.ca/reports/11-million-litres-day-tar-sands-leaking-legacy [Accessed December 12, 2011].

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Vaughn, S., 2010. 2010 Report of the Commissioner of the Environment and Sustainable Development to the House of Commons, Ottawa: Office of the Auditor General. Available at: http://www.oag-bvg.gc.ca/internet/English/parl_cesd_201012_00_e_34423.html [Accessed January 17, 2011].

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[1] A common standard for a barrel of oil is a barrel of Western Texas Intermediate crude oil (WTI) or simply Texas crude.

[2] Personal knowledge of the learner who lived in Alberta since 1967.

[3] Enbridge is the company that will likely build the Northern Gateway pipeline and the Alberta Clipper referred to earlier.