Gwynne Dyer: Canada's dirty oil offers climate-change test for Obama

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President-elect Barack Obama has inherited the inbox from hell, but you could practically smell the fear in some quarters as he listed his top priorities in his victory speech in Chicago: "Two wars, a planet in peril, the worst financial crisis in a century."

There will be general rejoicing if he can end the wars and solve the financial crisis, but "a planet in peril" is shorthand for climate change, and some people's oxen will be severely gored if he acts decisively on the global warming agenda.

First off the mark with an attempt to limit the damage was Canada's Prime Minister Stephen Harper. The very day after the election, Harper proposed a joint US-Canada pact on climate change whose real purpose is to protect Canada's "dirty oil".

That is the phrase Obama's advisers have used to describe oil imported from northern Alberta's huge tar sands region, which has a far higher cost in terms of the CO2 emitted in its production than conventional oil. How much higher? That's practically a state secret, but unofficial estimates suggest that separating Alberta's oil from the sand produces as much as three times more CO2 than just pumping oil out of the ground in the old-fashioned way.

The US is the main market for that oil, and American legislators have already begun to target it as an easy way of cutting emissions without hurting American voters.

Last year the US Congress passed a law banning federal government agencies from buying alternative fuels (ie oil from tar sands, oil shales or coal-to-oil projects) that have greater greenhouse gas emissions over their entire life-cycle than conventional fuel.

California has passed regulations requiring fuel suppliers to reduce the emissions from the fuel they sell - and to account for those emissions right back to the original production source.

So far, not so bad. After all, the US Government buys only 2 per cent of the oil consumed in the US, and California has only one-sixth of America's vehicles. But this could be just the entering wedge.

A national ban on the import of unconventional oil would be an attractive and politically cheap move for Obama, who needs to demonstrate his commitment to cut US greenhouse gas emissions but will be seriously short of money for big domestic projects until the recession ends. Tar sands producers in Alberta are scared, and Prime Minister Harper is from Alberta.

Harper's strategy is transparent. He wants a climate change pact with the US in which Alberta's "dirty oil" is exempted from controls on the grounds that it contributes to that other American national goal, "energy independence". (The subtext here is that Canada is not really foreign, though of course he cannot put it quite that bluntly.) In return, he would negotiate a common cap-and-trade system in which American and Canadian users of fossil fuels would have to pay for their emissions.

Obama's response to this offer will depend on where he is on the learning curve about climate change strategies. Does he realise that Alberta's oil is America's for as long as the US wants it, deal or no deal? More importantly, has he been seduced by the strategic myth about "energy independence"?

Since the Arab oil embargo at the end of the 1973 war in the Middle East, "energy independence" has been a mantra in US domestic politics, although little progress has been made in reducing American dependence on imported oil.

Insofar as this quest drives the US to reduce energy consumption and to seek non-fossil fuel sources of energy, it serves the cause of cutting greenhouse gas emissions - but it also reflects a mindset that has led to a lot of really bad strategic decisions.

It is not 1973. Back then, the Arab oil exporters had relatively small populations with low economic expectations, and could easily forgo their oil income for a few months. Since then, populations have grown dramatically (threefold in Saudi Arabia) and their economic expectations have risen even faster. Today, there is no major oil producer that could afford a lengthy interruption in the cash flow from its exports.

That means the US has no need to kowtow to the oil-exporting countries or to control them militarily. It can buy all the oil it wants if it's willing to pay the going price on the world market - and all of its oil-related military adventures over the years have never resulted in a lowering of that price.

Energy independence, properly understood, is about ending dependence on imported fossil fuels because they involve shipping huge amounts of money abroad, not because the supplies of fossil fuels are actually liable to be cut off.

To the extent that the goal of energy independence encourages the growth of alternative energy sources within the US, it is a useful element in a strategy for reducing greenhouse gas emissions - but not if it is used as a pretext to replace imported oil from allegedly unreliable sources with dirtier oil from a friendlier source.

Harper is appealing to the stupid version of the energy independence policy: maybe the Ay-rabs won't sell you their oil, but the Canadians always will.

It will be instructive to see if Obama falls for it.

* Gwynne Dyer's new book, Climate Wars, has just been published in New Zealand by Scribe.

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