Barry Saxifrage, Vancouver Observer, November 29, 2011

Americans are in deep trouble and their years of absorbing the tar sands growing production are over. This is a two part series. In today’s first part we explore the dramatic decline in American oil imports that set the stage for the Keytsone XL pipeline protests and delay. Tomorrow’s second part will explain just what that means for Vancouver and BC as a proposed string of gigantic tar sands pipelines heads for our coast.

The happy storyline running for years now in Canada is that Americans benefit from buying more tar sands oil: Americans need more oil, and reliable Canada has lots to sell. Big Tar has been ramping up carbon extraction for years, and Americans have been sucking it all up. America’s Big Gulp has allowed the Alberta tar sands to rapidly expand without really bothering the rest of us Canadians with their mess. But not anymore.

Three dramatic things have shifted for Americans.

ONE: Economic security threatened

The rapid doubling in oil prices has made importing oil economically disastrous for America. In 2005 Americans paid an average of $40 per imported barrel. By 2010 they were paying $74 and today the price hovers around $100. When you are the world’s largest oil importer that hurts big time.

In response the Americans have gone into crisis mode, cutting nearly a Keystone XL worth of oil imports every year. Half of that came from a rapid 16 per cent increase in domestic production, and half from a 9 per cent decrease in demand. In just five years the USA slashed oil imports by 25 per cent, cutting off the import flow equal to four Keystone XL pipelines.

Yet despite importing a billion barrels less oil than just five years ago, the rise in oil prices means Americans had to pay an extra $74 billion. America’s oil imports fell 25 per cent but their bill actually surged 40 per cent -- to $256 billion. At that rate a trillion dollars will leave their country every four years.

They are bleeding dollars much faster than they can cut their oil import addiction. Now imagine that five year trend happening once more. Pulling out the stops they manage to slash imports by another 25 per cent, shutting down the flow equal to three more Keystone XL pipelines. But if oil rises at the same rate they will owe $360 billion. Down the rat hole they go.

This is what a popping carbon bubble looks like to those that are invested in expensive high-carbon infrastructure.

Obama could never have delayed the Keystone XL if Americans really needed to import more oil. They don’t. Just the opposite.

TWO: National security threatened

For obvious national security reasons, America is very careful to not put all their oil import eggs in any one basket. As the chart below shows they spread their oil imports out over 54 nations.

What jumps out of the chart, however, is the huge share now supplied by Canada – a modern record for any USA oil supplier of 25 per cent. Just five years ago Canada supplied 16 per cent. The push to buy Canadian oil has been so successful that Canada has zoomed past all national security oil supply limitations that the Americans have maintained for decades. In sheer volume, America relies on Canada for nearly a billion barrels.

Even without new pipelines, Canada’s share will soon surge to between 33 per cent and 50 per cent. How likely is it that Americans will opt for even deeper dependence on Canada than they are already signed up for? It depends how long their memory is.

In 1973 Elvis Presley rocked the world, Nixon agreed to peace with Vietnam and the CN Tower went up. Like today, Canada was the top supplier of oil to the USA. That year Arab states decided to use oil as a policy weapon against Americans for their support of Israel in the Yom Kippur War. In what became known as the Arab Oil Embargo, OPEC nations raised prices and cut supply. Gas lines snaked around the block and pump prices skyrocketed. Good thing that friendly and reliable Canada was their main supplier, right?

Not exactly. Canada quickly shifted their oil policy to focus on lowering domestic oil prices and hanging onto their supply. The result was that within five years Canadian imports to the USA plummeted by two-thirds. Canada went from 21 per cent of USA oil imports to 6 per cent. Who filled the gap for the Americans? The Saudis more than doubled exports to USA and became their top supplier.

Again, Obama could never have delayed the Keystone XL if Americans really felt that buying another gigantic pipeline full of Canadian tar sands oil was in their national security interests.

THREE: Climate security threatened

The rapid rise in dangerous and destabilized weather events caused by fossil fuel pollution has become impossible to ignore, even for Americans. Fourteen U.S. natural disasters topped a billion dollars in damages in 2011, smashing the old record of nine in 2008. Epic droughts, wildfires, floods, crop losses, wind storms, blizzards, tornados and rainfall pounded much of the USA.

The climate science -- such as the newly released U.N. International Panel on Climate Change (IPCC) report on extreme weather -- says the misery is just getting started if humanity doesn’t act now to leave most of our fossil fuels in the ground forever. And that goes double for very dirty sources like Canada’s tar sands.

As Munich Re, one of the world’s top reinsurers wrote last year: “the only plausible explanation for the rise in weather-related catastrophes is climate change.”

Just in case Americans didn’t get it already, their most important climate scientist, James Hansen of NASA, said that significantly exploiting the tar sands means “game over” for the climate. He calculated that if all the oil in Alberta could be burned over night, the world would increase in temperature by 11 degrees and we wouldn’t ever be able to get the climate system under control.  He backed up his words by being one of the hundreds arrested in protesting Keystone XL. The people getting arrested in the USA protesting Keystone XL were primarily protesting the climate dangers. Those dangers will just get worse and more apparent over time.

Bill McKibben, the leader of the protests against Keystone XL, called the proposed pipeline a fuse to the second biggest “carbon bomb” on the planet. He spoke recently at UBC and told how when the hundreds of people came to get arrested at the White House protest, he asked them to wear a neck tie or a dress to demonstrate that “we are not the radicals. The radicals are the corporations that are willing to alter the chemical composition of the atmosphere and make the ocean 30 per cent more acidic.  There is nothing more radical than that, by an order of magnitude. It’s ruinous. The rest of us who want to leave the world to our kids in somewhat the same shape as we found it when we were born are the true conservatives. ”

Conservative mainstream groups like the Canadian government’s National Roundtable on Energy and Environment and the International Energy Agency have both recently warned of potentially “catastrophic” costs if we don’t stop expanding our fossil fuel production now.

America is getting hammered by the price of oil on the one hand and by extreme weather fuelled by oil’s  climate pollution on the other.  So while the tar sands threaten to be “game over” for our destabilized climate, it is looking increasingly likely that our destabilized climate is now threatening “game over” for Big Tar expansion via the USA.

Who wants a dozen new tar sands export pipelines?

Many Americans understand at least some of this new reality. That is why such fierce protests from left and right could erupt over the proposed Keystone XL pipeline -- and why Obama could do the unthinkable and delay the decision for at least another year.

Americans are in deep, deep trouble with the new oil reality. They just can’t afford to increase oil imports, even from Canada. The era of relentlessly opening of more and more tar sand spigots into the USA is over.

Big Tar has known for years that America is close to swallowing all it can. Their controversial Keystone XL pipeline is really just a way to export their oil through the USA to other nations -- and Americans understand that. It is one thing to build a pipe to supply USA with oil they need. It is a very different thing to ask for a 1,700 mile right of way across their entire nation, through critical aquifers, crossing hundreds of waterways, ploughing through farms and hugging the edges of hundreds of towns and cities with a high-pressure, leak-likely tube of toxic crude  --  just so Big Tar can export to someone else.

Would Canadians like it if the Americans tried to do the same thing? Of course not. Just imagine how Canadians would feel if an American corporation used TransCanada’s tactics on folks here to ram through an export pipeline clear across Canada. So it really is not hard to see why so many Americans were outraged. Many felt that if the tar sands wanted to build a huge leaky pipeline to export their dangerous product they should lay their pipe in their own country.

Canadians, however -- at least most of the major media and our Big Tar cheerleaders politicians -- don’t seem to understand these fundamental shifts. Or maybe they just don’t want to explain them to the Canadian public. Either way, the major reactions to the Keystone XL drama up here have been un-informed confusion, anger and a sense of betrayal.  By not explaining the shifting forces working on the Americans they have left many Canadians unprepared for what is coming now: a massive pipeline building campaign to crisscross BC instead.

As we will find out in tomorrow’s second part, we aren’t talking about one or two pipelines. Oh, no. To move all the new oil that Big Tar says they plan to produce by 2035 will require 15 more pipelines the size of the existing Kinder Morgan Transmountain pipe that flows down to Vancouver. That will require building a big new tar sands pipeline every two years for decades across someone’s land and dumping out on someone’s coastline.

Are you ready, B.C.?

Source