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Canada's Oil Sands Boondoggle

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KEYSTONE PIPELINE LEAK
AP File

Dear Americans;

Big oil and the government of Canada are making promises that should alarm every citizen. They have declared that the controversial $7-billion Keystone XL pipeline will bring you jobs, economic security and more 'friendly' oil. Moreover, they contend that the proposed pipeline's environmental impact (not to mention that of the world's largest, dirtiest energy project, the Alberta tar sands) is of little concern. These promises are too good to be true, but like so many foreign oil vendors, Canadian politicians ignore the facts when the money's green.

As Canadian journalists raised and educated in the United States, we have an abiding respect for the American people and our shared land. And we want you to know that Canadian oil, the world's most expensive hydrocarbon, will not make Americans more secure, nor will it fuel an economic revival (for you, anyway).

Let's deal first with the lie that the U.S. urgently needs more Canadian oil. Right now, the U.S. imports about 2.5 million barrels a day from Canada and half comes from the tar sands. Do Americans really need the additional million barrels this pipeline promises to deliver to Texas refineries?

The answer is no. Between 2008 and 2009 U.S. oil demand dropped by a million barrels a day. After a slight recovery in 2010, demand dropped again. According to Mastercard data, gasoline sales for July were the lowest in six years. Furthermore, experts predict permanent declines in demand due to the recession (a direct result of high oil prices), conservation, better fuel standards and efforts to reduce dependence on foreign oil. The U.S. Energy Dept. says so, and so does the International Energy Agency.

Shrinking demand tells us that the Keystone pipeline is not about America's best interests. It is about moving landlocked Canadian bitumen to U.S. coastal ports. Given that most Gulf refineries have all the oil they can handle, the surplus will be shipped out on supertankers. "There will be too much oil, it's got to go somewhere, and it's going to China," says Denver-based Philip Verleger, one of the country's most respected petroleum economists, who has called the pipeline "a tar sands road to China."

Next comes the issue of security -- a truly cynical claim. The tar sands, which have generated enough toxic mining waste to flood Staten Island or Washington, DC, is already an environmental nightmare. Just last May, Alberta suffered its worst bitumen spill in nearly 40 years -- more than a million gallons. Last year, a bitumen pipeline leak in Michigan fouled the Kalamazoo River and increased the price of oil by $10 a barrel in the Midwest.

Nor does Canadian oil ease pain at the pump. Currently, it costs about $8 billion to draw a million barrels out of Saudi deserts, and nearly $35 billion to produce the same volume in the Gulf of Mexico, but Canadian oil costs between $40 and $45 billion per million barrels, according to Global Oil Trade: The Relationship Between Wealth Transfer and Giant Fields. Because oil is a fungible good, Canadian production has significantly raised the price of oil.

Last but not least is the science. When NASA's James Hansen, one of the world's foremost climate researchers, was arrested protesting the Keystone pipeline, along with more than 1,200 fellow citizens, Americans should take note. Dr. Hansen knows Alberta bitumen is junk crude with a carbon footprint 17 to 23 per cent greater than light oil, and that by 2020, the tar sands will be producing greenhouse gases equivalent to the state of Minnesota (about 90 million tons).

When Canada's Prime Minister Stephen Harper, a climate change skeptic and the son of an Imperial Oil accountant, says he's cleaning things up, ask how. You won't like the answer. Even Environment Canada admits to the practice of GHG dumping. As more and more "bitumen from the oil sands is being shipped to the United States," says Environment Canada's 2010 report to the U.N., "it appears that emissions associated with the upgrading and refining of bitumen were increasingly avoided in Canada."

In sum, the Keystone pipeline will not serve American interests but delight the Canadian government and its oil lobby. In addition to draining your pocketbooks and further compromising your environmental health, it will enrich Canadian politicians who don't believe in climate change. Your own Thomas Jefferson said it best: "Dependence begets subservience and venality."

And that's all Canada's bitumen will promise you.