Energy – April 2013

The Tar Sands Disaster
By Thomas Homer-Dixon
NYT –  March 31, 2013

Also, bitumen is junk energy. A joule, or unit of energy, invested in extracting and processing bitumen returns only four to six joules in the form of crude oil. In contrast, conventional oil production in North America returns about 15 joules. Because almost all of the input energy in tar sands production comes from fossil fuels, the process generates significantly more carbon dioxide than conventional oil production.

There is a less obvious but no less important reason many Canadians want the industry stopped: it is relentlessly twisting our society into something we don’t like. Canada is beginning to exhibit the economic and political characteristics of a petro-state.

Countries with huge reserves of valuable natural resources often suffer from economic imbalances and boom-bust cycles. They also tend to have low-innovation economies, because lucrative resource extraction makes them fat and happy, at least when resource prices are high.

Canada is true to type. When demand for tar sands energy was strong in recent years, investment in Alberta surged. But that demand also lifted the Canadian dollar, which hurt export-oriented manufacturing in Ontario, Canada’s industrial heartland. Then, as the export price of Canadian heavy crude softened in late 2012 and early 2013, the country’s economy stalled.

Canada’s record on technical innovation, except in resource extraction, is notoriously poor. Capital and talent flow to the tar sands, while investments in manufacturing productivity and high technology elsewhere languish.

But more alarming is the way the tar sands industry is undermining Canadian democracy. By suggesting that anyone who questions the industry is unpatriotic, tar sands interest groups have made the industry the third rail of Canadian politics.

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