Prof/MLA Weaver Offers Support for Tar Sands Refinery

British Columbia has for some time been a leader in the (Murdoch-infested) English-speaking world in coming to grips with climate change. Notwithstanding that, there is only a single member (MLA) of the provincial parliament, the Legislative Assembly, from the Green Party.

That member is also an internationally renowned climate scientist, probably Canada’s most-cited climatologist, Professor Andrew Weaver.

Dr Weaver is now doubly notable for surprising everyone in coming out, conditionally, in favor of a diluted bitumen pipeline across British Columbia and a refinery on the coast there to serve the tar sands industry.

In the US opposition to developing the tar sands has focused on the Keystone XL pipeline, while in Canada the situation is more complicated, because the product has several possible routes out of the country. It was generally agreed, even before the Lac Megantic disaster, that the North American rail system is inadequate for the purpose.

At Planet3.0, we’ve had our internal disagreement about this, with mt arguing that McKibben’s and Hansen’s approach is correct, and that tar sand bitumen is a good place to draw the line, while Dan M has argued that this is a sort of arbitrary decision, and the tar sands should be treated just as another form of fossil fuels, rather than a bright line that should not be crossed.

Our friend Andy Skuce has argued cogently here, in defence of the former position, and here responds to Weaver’s surprising position.


Andrew Weaver, the climate scientist turned Green Party politician, has raised hackles among environmental activists by lending support to a proposal to build a huge oil refinery near Kitimat in northwestern British Columbia. Despite the headlines, his support for it is qualified, seeing it as a compromise position that will keep diluted bitumen—dilbit—out of coastal waters, even if it doesn’t keep the carbon in the bitumen out of the atmosphere. Quoted in the Prince George Citizen, Weaver says:

“I like to think [of] the Green Party as a science-based, evidence-based common sense party,” he said. “It’s a party that realizes that we need gasoline in our cars but we also need to have a strategy to wean ourselves off that.”

and

“Rail is bad news, dilbit in the water is bad news, dilbit on land over rivers and streams is potentially very bad news,” he said. “Obviously as the Green Party [MLA], I’d prefer to keep it in the ground as much as possible and start to invest sooner than later into the low-carbon economy of tomorrow, but I’m pragmatic and I recognize at some point one may need to develop a compromise and a compromise solution is one that would actually give jobs in B.C.”

On Twitter, Adam Olsen, the leader of the BC Green Party, distanced himself and the party from Weaver’s position:

11-Feb-14 11-42-10 AM

Weaver has also come under fire from politicians in BC’s main opposition party, the New Democrats. Spencer Chandra Hebert, an NDP MLA, claims that “the [BC] Green Party is selling out”. NDP MP Nathan Cullen says that he is “a bit surprised”:

“No one gives this Black proposal any credibility. The whole notion behind it that you would build this $7 billion pipeline and 20-something billion dollar facility at the end of the pipeline before shipping it off to China, it goes against the whole rationale for the pipeline in the first place – which is to rip and ship raw bitumen to China.”

and

“For the Green Party to jump behind this thing seems strange.”

Federal Green Party leader Elizabeth May has said that she is in favour of upgrading more bitumen in Alberta, but has not commented recently on the idea of refining bitumen in BC.

What is Kitimat Clean?

Kitimat Clean is the name given to a $13 billion proposal to construct a refinery in Kitimat at the end of the proposed Northern Gateway pipeline in NW BC. The project is being driven by David Holmes Black a wealthy newspaper proprietor who happens to live in the Victoria constituency  represented by Andrew Weaver in the BC Legislature. The refinery would process all of the diluted bitumen (dilbit) transported from Alberta to Kitimat into gasoline, diesel and kerosene for transport to Asian markets. Black claims that his project could be built more cheaply at Kitimat than in Alberta, because modules could be constructed for less in Asia, shipped to Kitimat and assembled on-site. The refinery capacity of 550,000 barrels per day would make it one of the largest refineries in the world and the largest on the west coast of North America.

>Kitimat's residential community — home to about 9,000 people — is located 11 kilometres away from its large industrial base, which includes an aluminum smelter operated by Rio Tinto Alcan that employs about 1,000.The benefits of the Kitimat Clean proposal are supposed to be:

  • Providing long-term jobs and tax revenue in BC, both at the refinery and by making a market for 1.25 million cubic feet per day of natural gas, currently stranded in huge shale gas resouces in NE BC.
  • Removing the necessity for transporting dilbit. A spill of dilbit would be much worse environmentally than a spill of refined products like gasoline or diesel. Enbridge’s dilbit spill in the Kalamazoo River has cost over a billion dollars to clean up and involved much smaller amounts of dilbit than tankers would carry. Opinion polls show that BC public is more concerned about dilbit tankers on its coast than about other aspects of the Northern Gateway or TransMountain pipeline projects.
  • The project will employ a modified form of the Fischer-Tropsch process for refining the bitumen, which lightens the hydrocarbons, roughly speaking, by putting hydrogen, in rather than the more common and cheaper coking method which takes carbon out. Black claims that this will reduce refinery emissions compared to refineries elsewhere. Estimates are that Kitimat Clean would emit about 7 million tonnes of CO2 per year, which would amount to about 10% of BC’s total emissions and raise about $200 million annually in carbon taxes.

The first two arguments are the main reasons put forward by Weaver for endorsing the pipeline. In my opinion, the last claim has questionable merit since wherever and however the bitumen is processed, the carbon in it will find its way into the atmosphere. Whether the emissions come from the chimneys of refineries or from the tail pipes of cars makes no difference to the effect on the climate.

There are three big problems with the Kitimat Clean project: economics, overland transportation and climate change. In my view, any one of these is enough to sink the Kitimat Clean project.

1. Economics

Energy economist Andrew Leach has looked at the economics of refining in Canada (here,here and here) and claims that producers can make more money by selling raw bitumen than they could by upgrading it to synthetic crude oil or by refining it into fuel products. In short, refining is cheaper in other places, either due to there being existing refineries or lower costs. The producers themselves endorse this analysis in practice; none of them are planning to build a new refinery or upgrader and the last major project, Voyageur, was cancelled a year ago because of poor economics.

If politicians want more refining to take place in new refineries in Canada, then they are going to have to subsidize it. There are various political levers available to encourage projects like Kitimat Clean, such as loan guarantees, subsidies or tax breaks and, because big new infrastructure projects stimulate the economy, politicians are easily tempted to pull those levers. But, surely, the last people to be advocating larger subsidies for oil companies should be Canada’s Green and left-wing parties. There are better ways to spend public funds than facilitating the building of new fossil fuel infrastructure.

Government mandates or raw bitumen export tariffs could theoretically compel or at least encourage industry to refine or upgrade more bitumen in Canada. In effect, this would impose a tax on producers and subsidize the cost of bitumen to refiners. Few Greens would object to increased taxes on bitumen producers, but if the goal is to reduce emissions, then a carbon tax would be more effective.

2. Overland transportation

The Northern Gateway pipeline proposal has been approved by the review panel of the National Energy Board, Canada’s national energy regulator, and is awaiting approval from cabinet. Nevertheless, many observers consider the proposal to be doomedWeaver writes:

Northern Gateway does not have a social license to proceed. Virtually every First Nation is opposed to the project and the Northern Gateway pipeline would go through their traditional territories so their wishes must be respected. The overwhelming majority of British Columbians are also against this project. As far as I am concerned, Northern Gateway has burned too many bridges, alienated too many First Nations and lost the trust of the people of B.C. It’s time for the Northern Gateway proponents to move on.

It is difficult to see how the Kitimat Clean project could be viable without being fed by a pipeline. In theory, bitumen could be transported by rail, but this would add costs and environmental obstacles to a project that is already economically challenged.

3. Climate change

Weaver argues that the climate effects of oil sands development will have only a small effect on global temperatures and that the potential of coal and gas consumption to contribute to serious climate change is much greater. I largely agree. However, framing the harm of emissions in terms of their global effect, while framing the economic benefits of increased employment as a local benefit, makes costs look small and benefits large. Nobody tries to dismiss the economic benefits by saying that they are negligible compared to the size of the world economy.

It is true that the economically viable oil sands reserve would add roughly 0.03°C to world temperatures. However, that would involve the (well to wheels) release of nearly 100 billion tonnes of CO2. At a social cost of carbon of $30/tonne (the current carbon tax rate in BC), that is a $3 trillion tab. The emissions within Canada to produce that bitumen would be about 17% of that, about $500 billion, effectively an involuntary subsidy provided by future generations everywhere, just to ensure the prosperity of one Canadian province.

It is important not to exaggerate the potential of the oil sands on climate change, especially if this distracts attention from the much bigger threat posed by coal. But it is also vital not to downplay the relative importance of the oil sands in contributing to Canada’s disproportionate and growing contribution to the climate crisis.

I do not agree with the view that preventing new pipelines will do little to slow development of the oil sands or that the development of access to foreign markets for bitumen is inevitable. I have argued against this in the case of the Keystone XL pipeline and for the proposed TransMountain pipeline expansion project. Although some claim that bitumen will find its way to market whether pipelines are built or not, the strenuous lobbying efforts by Federal and Alberta governments to approve new export pipelines belie this. For example, Energy Minister Joe Oliver claims that the approval of the Keystone pipeline will have a negligible effect on greenhouse gas emissions, but will have a big positive effect on investment and jobs. That’s simply not possible, increased investment will increase jobs and, inevitably,  emissions. Former Conservative Minister Jim Prentice admits that pipelines are needed for oil sands growth:

“ We need to be a forceful partner with alternative [markets], so that we’re not dependent and supplicant to a U.S. marketplace that is over-supplied. Without it [access to export markets in Asia], we are heading towards a reality in which there is no market for increased oil sands production beyond 2020.”

Brian Ferguson, the CEO of Cenovus Energy Inc, a major oil sands producer, said:

“If there were no more pipeline expansions, I would have to slow down,”

Opposing pipelines is, admittedly, a blunt and imperfect instrument for slowing down oil sands growth. Far better would be limiting demand for high-emissions crude oil sources, through global carbon taxes. But, for now, obstructing new infrastructure is one of the only tools we have.

Say it ain’t so, Andrew

As I mentioned at the beginning, reactions of some BC environmentalists to Weaver’s comments on the Kitimat Clean refinery seem to echo the anguished (and probably apocryphal) cry of a teenaged fan at the trial of Shoeless Joe Jackson. Although I disagree with Weaver on this specific issue, I still welcome his commentary. As scientists, frustrated with government inaction on climate change, decide to speak out and get involved in advocacy and politics, the conversation is going to change away from the well-rehearsed talking points of politicians and activists and move towards following facts and arguments wherever they may lead. That can only be healthy if it provokes debate and scrambles the political dividing lines and challenges the stale tactics deployed in the endless warfare of environmental politics. We need some out-of-the-trench thinking, even if that risks attracting some incoming fire. If support for Green parties is to be broadened—and to make progress on climate change it has to be—then tolerance for new viewpoints from new allies will have to broaden, too. Of course, new political recruits are going to have to learn some hard lessons about the art of the possible, also.

Environmentalists should not expect climate scientists necessarily to stick to the conventional green narrative of the soft energy path, which favours energy efficiency, slower growth, small dispersed renewable energy projects and an aversion to corporations and free trade. For example, James Hansen is a strong advocate of nuclear power, Myles Allen believes that the solution is carbon capture and storage, Ken Caldeira and several other prominent climate scientists say that it is time to think hard about geoengineering. Not one of them doubts that continuing on the path we are on with unchecked fossil fuel consumption puts the future of planet at risk. But many scientists will tend to look for pragmatic solutions to mitigating climate change, without regard to prevailing ideological attitudes. As Weaver says in response to his critics, quoted in The Prince George Citizen:

“They could be surprised or they can say Weaver, you’re just being consistent with what you said in the election campaign, that you’re looking for common sense solutions to real world problems and not playing politics and giving honest answers.”

The problem of climate change is so urgent, so large and so intertwined with the economy that it can’t be solved without trade-offs, compromises and buy-in to painful policy choices from across the political spectrum. Political flexibility, not rigidity, is needed and for that, we need serious consideration of all possibilities, with nothing taken off the table too soon.


Originally posted at critical-angle.net. Andy Skuce retains copyright.

Comments:

  1. Thanks for reposting this, Michael.

    Just to be clear, my piece is not an attack on Andrew Weaver. He is doing excellent work in the BC Legislature and recently made an superb speech there denouncing the hypocrisy and double standards of the current BC government on climate change targets, exports of coal and for promoting a big export business for natural gas.

    http://www.theglobeandmail.com/news/british-columbia/green-mla-demolishes-bc-liberals-environmental-rationale-for-lng/article17015765/?cmpid=rss1#dashboard/follows/

    http://www.andrewweavermla.ca/2014/02/17/putting-climate-targets-throne-speech/

  2. I follow the argument and know I am part of the problem. I too desire and "need" to continue to live the way I'm accustomed. Nonetheless, it is my opinion that we must get everyone - that's everyone, not just some of us - to change everything in our lives to an extent that will slow down, stop and reverse our runaway acceleration of energy consumption from fossil fuels and their poisonous spawn, extreme fossil. I don't separate dirty fossil into subcategories, coal is just as bad.
    www.nytimes.com/2014/02/19/world/europe/german-village-resists-plans-to-strip-it-away-for-the-coal-underneath.html

    The chances of the level of full-out cooperation necessary to change this picture are slim to none, but I still believe in free will. We cannot abdicate that we know the matter is urgent.

    After four decades it's time to stop temporizing and go full-out for every kind of clean energy.

    http://www.youtube.com/watch?v=v6NLCKeL63c

  3. Please watch this, whether or not you disapprove of Fiore's style. Important to think about, and he normally gets his facts straight and includes vast amounts of background in these short clips.

    http://vimeo.com/87128105

    transcript:

    [soothing, confident female corporate voice]

    We're innovation. We're jobs. We're American.

    We're the American Petroleum Institute, and we're your best friends.

    We're pleased to announce the State Department reported no significant greenhouse gas emissions resulting from the Keystone XL pipeline.

    Because, like it or not, more tar sands oil is on the way.

    Sometimes a pipe, is just a pipe.

    Under the leadership of our CEO, Jack Gerard, we made sure the State Department hired a member of our organization to help conduct the environmental review . . .

    . . . A member who has previously worked for the very company who wants to build the beautiful and necessary pipeline they're reviewing!

    We at API have spent the most we ever have on lobbying, and it's paying off: With global warming confusion and a long-term commitment to fossil fuels.

    But just to be sure, we've also been spending to spy on environmentalists.

    Because you can buy peace of mind.

    Jack Gerard is confident that after Obama's full-throated endorsement of natural gas, he'll soon give a fuller-throated endorsement of oil.

    [Gerard: He'll be gargling oil for breakfast, if he knows what's good for him!]

    We're almost there, thanks to the American Petroleum Institute.

    Soon, the Keystone XL pipeline will be delivering clean, emissions-free tar sands oil that will do everything good you ever thought possible.

    Leave the worrying about oil spills, eminent domain and carbon footprints to those unstable farmers, homeowners and hippies.

    Real Americans will sit back, relax . . . and do what we tell you to do.

    [endslate: "Build the Keystone XL. Now, dammit. Paid for by the American Petroleum Institute

  4. “It’s a party that realizes that we need gasoline in our cars but we also need to have a strategy to wean ourselves off that.”

    Is tar sands development necessary to put gasoline in the cars of Canadians?

    Is tar sands development somehow a strategy to wean Canada off fossil fuels?

    “Rail is bad news, dilbit in the water is bad news, dilbit on land over rivers and streams is potentially very bad news,”

    The Athabasca tar sands are about 700 miles from Kitimat and if built the Northern Gateway Pipeline would not be immune to spills .

    “Obviously as the Green Party [MLA], I’d prefer to keep it in the ground as much as possible and start to invest sooner than later into the low-carbon economy of tomorrow, but I’m pragmatic and I recognize at some point one may need to develop a compromise and a compromise solution is one that would actually give jobs in B.C.”

    Aren't there other ways of providing jobs to people in BC? Wouldn't a large plant for producing solar panels or wind turbines produce jobs?

    Building a giant refinery that will light the fuse on a giant carbon bomb seems like an odd way to "compromise."

    Compromise what?
    Some like Neil Young view tar sands development as a compromise of Canada's integrity.

    There is quite a difference between calls by some climate scientists for nuclear energy, carbon capture and storage and geoengineering and calls for a massive refinery that will make possible the exploitation of a major new source of fossil fuel. Some environmentalists may oppose the former, but at least they are meant to mitigate the carbon problem.

    It's hard to see how the latter could do anything but make the problem worse.

  5. This project walks on eggs from start to finish. Anybody who knows anything about coastal navigation can see that heavy tanker traffic is going to produce bad odds.

    See this letter detailing how bad odds will be produced, from an experienced ship captain:

    http://www.vancouverobserver.com/blogs/earthmatters/master-mariners-critique-proposed-enbridge-tanker-routes

    It's worth noting that of all the world's coastal navigation environments, this part of the world is among the most challenging. Margin for error is extraordinarily scanty.

    Regulators should insist that tankers servicing Kitimat are equipped with redundant propulsion and enhanced redundancy on steering gear. That won't happen, of course; we don't actually need this oil badly enough to justify the investment.

  6. This project is too screwy. Why is anyone supporting it? Wouldn't it have been easy for Weaver to point out the flaws already mentioned in comments here? Was he desperately searching for something to compromise on to show his reasonableness? Does it have any chance of going through?

    Due to the environmental wreckage required to extract the tar sands carbon and the perils of long pipelines the tar sands stand out as a place to start the necessary process of leaving it in the ground. To any who say

    "Can't we do just this much more?"

    I ask if we do not stop here, then when? Where? How many more years of business as usual must there be before you grant that we may leave some in the ground? Have any compromisers addressed these questions? Has anyone? Actually leaving some carbon in the ground when we have the ability to get it out seems to be a psychological hurdle.


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