South Dakota at Center of Tar-Sands Dispute

Austin Kaus, The Daily Republic, November 20, 2009--A representative of the American Petroleum Institute considers South Dakota a “battleground” in the fight over the extraction of oil from the Canadian oil sands.

Dan Gunderson, a communications specialist working for API, said this week that he’s traveling across the Midwest to address and reject claims by Greenpeace and others, who say the extraction of oil from the Canadian oil sands and the usage of the product itself will do more harm than good. Gunderson is a founder and managing member of Big Wild Communications, of Middleton, Wis.

He’s concentrating on the Midwest because states like South Dakota could end up with pipelines and a refinery as a means to handle the incoming crude oil from Canada.

South Dakota already is home to a portion of the nearly-constructed Keystone pipeline, which will transport up to 590,000 barrels of oil per day from Hardistry, Alberta, through eastern South Dakota to Illinois and Oklahoma.

A second pipeline — the Keystone XL — could pump up to 900,000 barrels daily through the western part of the state, if approved by the South Dakota Public Utilities Commission. Both pipelines are projects of a company called TransCanada.

Gunderson, who said he has no affiliation with TransCanada, cited a study by the Canadian Energy Research Institute that says Canadian oil sands extraction could generate more than $57 million for South Dakota industries — both directly and indirectly related to oil — in 2010. The study says that number could increase to $173 million in 2015.

“There’s a tremendous impact, obviously, to South Dakota,” Gunderson said during a visit this week to The Daily Republic. “South Dakota is a battleground in this whole debate.”

The oil sands are a mix of sand or clay with bitumen, a tar-like form of petroleum. Until recently, extracting the petroleum from the sands wasn’t economically feasible, but the increase in both demand and the price of oil changed that.

It’s the process of extraction that groups like Greenpeace and API — a national trade organization for the oil and natural gas industry — disagree on.

Originally, much of the petroleum harvested from the oil sands came by surface mining, a process considered by many environmental groups to be devastating to mined areas.

Now, Gunderson said, a process in which steam melts the bitumen, allowing it to be pumped to the surface, means the petroleum can be harvested safely and economically. He said that prevents the need for obtaining oil from other, perhaps less hospitable, suppliers in places such as the Middle East and Venezuela.

“The oil sands really don’t make any difference if you don’t need crude oil, but we do and we will,” Gunderson said. “(Canada) is a great source for reported oil from a friendly neighbor.”

But Daniel Kessler, of Greenpeace, said the extraction of petroleum from the oil sands does more harm than good.

“It’s one of the most inefficient ways you can get energy,” said Kessler, of San Francisco, in a phone interview. “Studies show that it takes more energy to actually cultivate the tar sands than it actually yields.”

The demand for oil and related products isn’t going away, Gunderson said. Given that China recently purchased a $5 billion stake in the oil sands, he said, it’s important that the United States act quickly to secure a plentiful and nearby source of oil.

“There are people that want us to believe that we’re not going to be buying petroleum and natural gas in the very near future,” Gunderson said. “In reality, by 2030, well over half of our demand for energy will come from petroleum and natural gas.”

Gunderson’s statements are “patently ridiculous,” according to Kessler.

“This is not about trying to get the world’s dirtiest fuels before China does,” Kessler said. “The real race is about getting us off fossil fuels and onto renewable energies as soon as possible.”