Where oil sands may fit in the Canadian-US clean energy accord

Oil sands weren't specifically mentioned in US President Barack H. Obama and Canadian Prime Minister Stephen Harper's joint announcment. But both leaders separately said there's a problem.

When US President Barack H. Obama and Canadian Prime Minister Stephen Harper met on Feb. 18 in Ottawa, they pledged to work together on economic recovery, international security and clean energy.

Their joint announcement of a "Clean Energy Dialogue" did not specifically mention Alberta's oil sands, which increasingly supply crude oil for US refineries and which also have come under attack from environmental organizations and US House leaders such as Energy and Commerce Committee Chairman Henry A. Waxman (D-Calif.).

Waxman's insertion of a provision barring federal purchases of unconventional fuels which leave a bigger carbon footprint than crude oil in energy legislation late in 2007 disturbed Canadian officials who thought it might apply to crude from oil sands. Obama acknowledged the problem during his Feb. 17 interview with the Canadian Broadcasting Corp.

"What we know is that oil sands create a big carbon footprint. So the dilemma that Canada faces, the United States faces, and China and the entire world face is how we obtain the energy that we need to grow our economies in a way that is not rapidly accelerating climate change. That's one of the reasons why the stimulus bill that I'll be signing today contains billions of dollars towards clean energy development," the president said.

"I think to the extent that Canada and the United States can collaborate on ways that we can sequester carbon, capture greenhouse gases before they're emitted into the atmosphere, that's going to be good for everybody. Because if we don't, then we're going to have a ceiling at some point in terms of our ability to expand our economies and maintain the standard of living that's so important, particularly when you've got countries like China and India that are obviously interested in catching up," he continued.

No country will be able to solve the problem by itself, Obama said. "So Canada, the United States, China, India, the European Union, all of us are going to have to work together in an effective way to figure out how do we balance the imperatives of economic growth with very real concerns about the effect we're having on our planet. And ultimately I think this can be solved by technology," he maintained.

'Clean energy mechanisms'

"I think that it is possible for us to create a set of clean energy mechanisms that allow us to use things not just like oil sands, but also coal. The United States is the Saudi Arabia of coal, but we have our own homegrown problems in terms of dealing with a cheap energy source that creates a big carbon footprint. And so we're not going to be able to deal with any of these issues in isolation. The more that we can develop technologies that tap alternative sources of energy but also contain the environmental damage of fossil fuels, the better off we're going to be," Obama said.

Harper also did not duck the issue when Cable News Network's Wolf Blitzer asked him a question about Canada's oil sands on Feb. 18: "The fact of the matter is that there are high emissions from oil sands extraction. We're involved, as is the government of the United States, in funding technological development, looking at things like carbon capture and storage as a way of minimizing or cutting down on some of those emissions."

His joint announcement with Obama that the two countries would establish a "Clean Energy Dialogue" specifically mentioned their coordinating R&D demonstrations CC&S from coal-fired plants. It said that this would build on their experience with pumping carbon dioxide from a North Dakota coal gasification plant for enhanced recovery operations at EnCana Corp.'s Weyburn oil field in Saskatchewan.

Harper said he expects CC&S to be very important for the world from now on. Canada has been wrestling for the past 10 years with its desire to have a regulatory regime which would reduce its carbon emissions, he noted.

"But we've been trying to do so in an integrated economy when the United States has not been willing to do so. I think quite frankly the fact that we have a president [and] administration that want to see some kind of regulation on this is an encouragement. I'm convinced that our energy sector will respond. And I'm convinced that as we go forward in the future, the United States will remain a big customer for our energy products," Harper said.

Contact Nick Snow at nicks@pennwell.com

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