Oil patch reeling from unfair attacks

Alberta is being slagged by anti-oilsands ads and criticized by eastern premiers and politicians

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The Gazette, Sunday, July 18, 2010

A San Francisco public advocacy group called Corporate Ethics International launched a video and billboard campaign to "rethink" visiting Alberta and Canada because of the "tarsands." Alberta and the oil industry have spent a decade rebranding the resource as the oilsands, precisely to avoid the suggestion of tar sticking on ducks.

"Think of visiting Canada?" the ad asks. "Think again."

Remember those ducks? Billboards are going up in several major markets with the headline: "Alberta: the Other Oil Disaster" over two images of birds soaked in oil. One bird image is captioned "Gulf Oil Spill Disaster," and the other is labelled "Alberta Tar Sands Oil Disaster."

So the oilsands, ominously labelled the tarsands, is compared to the worst environmental disaster in American history, which has for three months been spewing millions of barrels of oil into the Gulf of Mexico, posing a major threat to the economy and environment of five states from Texas to Florida. And the companies extracting oil outof bitumeninFortMcMurray are compared to BP.

Everyone likes ducks. But more of them apparently die from flying into wind power turbines than from being soaked in tailing ponds in the oilsands.

Enough already, say Albertans. They are still shaking their heads at the performance of Quebec Premier Jean Charest, Ontario Premier Dalton McGuinty, and Toronto Mayor David Miller, trashing the oilsands on the world stage at the Copenhagen conference on climate change last December.

Since then, Albertans have started pointing out that Ontario and Quebec are beneficiary provinces of equalization, paid for by four donor provinces led by Alberta. Cheap tuition at universities, private high schools half-funded by Quebec, $7-a-day child care and now, in-vitro fertilization treatments in public health care, are all partly supported by Alberta tax dollars. This is what happens when politicians play a short game for easy headlines, rather than the long game that serves everyone's interests.

And it wasn't a good day for Michael Ignatieff when the Liberal leader said he wouldn't permit trans-Pacific shipment of oil on tankers from the coast of northern British Columbia. The next time Iggy goes to China, they'll want to talk to him about that, because they'll buy as much product from the oilsands as Alberta is not shipping to the United States. In the oilpatch and pipeline industry, they're simply gob-smacked by the stupidity of Ignatieff being in favour of the oilsands on the one hand, but against building a northern pipeline and shipping it overseas on the other.

There's no doubt that there are significant environmental and reputational issues to be managed around the oilsands. But they also have to be kept in perspective. Canada produces two per cent of the world's greenhouse-gas emissions, and the oilsands account for about five per cent of that. The problem is the visuals of oilsands production -smokestacks, water use, tailing ponds, and those darn birds.

But the economic benefits of the oilsands are compelling. As a paper by University of Calgary's Canada School of Energy and Environment points out: "The Canadian Energy Research Institute estimates that the oilsands industry alone will add three per cent to Canada's GDP during the period to 2020, 5.4-million person years of employment, 44 per cent of which will be outside Alberta."

Three per cent of GDP in today's terms is $50 billion a year, and with normal growth would come in at $75 billion in a decade's time.

Underlying all this is the importance of Canada's energy trade with the United States. Oil and gas are now by far Canada's largest export to the U.S. As David Mc-Laughlin and Bob Page of the National Round Table on the Environment and the Economy pointed out in a piece for Policy Options magazine last month, oil and gas exports to the U.S. in 2008 totalled nearly $70 billion in 2008, compared with $36 billion in auto exports.

In other words, energy exports from Alberta are now nearly twice the level of auto exports from Ontario.

But the other significant bullet point is that nearly half the industrial and employments of the oilsands go to manufacturers and suppliers in provinces like Ontario and Quebec. SNC-Lavalin, for instance, is a huge supplier of engineering services to the oilpatch, in the order of $1 billion a year.

Alberta and the energy industry both need to do a better job of telling this story, both in terms of the messenger and the message. But bottom line, what's good for Alberta is good for Canada.

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