Oil sands attacks heat up; Canadian environmental groups hope to win Obama support for campaign

Shawn McCarthy and Norval Scott, January 13, 2009, Globe and Mail Report on Business -- Canadian environmental groups are ratcheting up their attacks on the Alberta oil sands, asking U.S. president-elect Barack Obama to reject special treatment for the developments under a proposed climate change accord.

With the Alberta economy reeling from slumping oil and gas prices, the environmentalists stepped up their anti-oil-sands campaign with a direct appeal to the president-elect, who has announced he will visit Prime Minister Stephen Harper in Ottawa soon after his inauguration.

The federal government launched an effort days after Mr. Obama was elected in November to persuade the Democratic standard-bearer that the U.S. and Canada should enter into a climate change accord that would also protect U.S. energy security by ensuring the oil sands development isn't derailed by tough new emissions regulations.

However, the environmental groups supported the concept of a continent-wide approach to climate change regulations, but said it would be undermined by any special treatment for the oil sands.

"The integrity of such a system would be entirely compromised should it somehow give a 'pass' to the production of high carbon oil from the tar sands, which many believe is the intent of the overture," said the letter, which was signed by a half-dozen groups, including the David Suzuki Foundation, the Pembina Institute and the Sierra Club of Canada.

Copies of the letter were also sent to Mr. Obama's cabinet designations, including soon-to-be secretary of state Hillary Clinton, incoming energy secretary Steve Chu, and the president-elect's special adviser on energy and climate change, Carol Browner.

The federal and Alberta governments have worked hard to reassure the Obama team that Canada is moving aggressively to regulate greenhouse gas emissions, and that the oil sands producers will be required to reduce emissions as projects move forward.

The plea to the president-elect comes as the oil sand sector is already struggling. The price of crude has collapsed from a peak of $140 (U.S.) a barrel last summer to around $40 now, as a result of the global economic recession and the flood of speculative money out of commodity markets.

The federal and Alberta governments are touting the technology known as carbon capture and storage as key to the long-term environmental fix for the oil sands, as well as for coal-burning utilities. Alberta is spending $2-billion to develop that technology and has called for similar amounts from Ottawa, which is also being lobbied by the oil industry for tax breaks to encourage investment in carbon capture.

The environmental groups note, however, that Alberta is not requiring companies to adopt carbon capture and storage technology as a condition for approval, and that federal policy remains vague as to how aggressively Ottawa will regulate emissions.