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Does the U.S. need tar sands oil? Our analysis shows we don't

Liz Barratt-Brown

Posted February 17, 2009

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As the President heads to Canada this week, the Canadian government is expected to table a proposal to "protect" their carbon-heavy tar sands operations in Northern Alberta from future global warming regulation. The Canadians are confident, apparently, that the U.S. will embrace the tar sands because "the U.S. needs the oil"

Does the U.S. need tar sands oil?  Our analysis shows we don't.  President Obama has repeatedly stated that the U.S. must reduce its dependence on oil. He has focused - on energy security grounds - on oil from the Middle East and Venezuela.  But the President, as well as his advisors, endorse a framework that positions climate security as a key component of national security.  This will necessitate taking a harder look at the tar sands oil and other high carbon fuels as well as oil from the Middle East.

The great news is that we can reduce our reliance on Middle Eastern, Venezuelan and tar sands oil by reducing our demand.  We don't have to increase our use of tar sands oil to reduce our demand for Middle Eastern oil. And we can cut our demand through measures that are strongly supported by the President. We are already off to a good start with savings under the Energy Independence and Security Act (EISA) of 2007. 

According to NRDC's fuels expert, Luke Tonachel, we can reduce U.S. oil use by 3.9 million barrels per day in ten years.  Extend that to 2020, by just one year, and it jumps up to 4.4 million barrels a day as EISA fuel efficiency mandates are realized and savings continue from smart growth and transit investments, moving some transportation to the electric grid, advances in aviation fuels and improved efficiency of building oil heating. Our analysis does not include savings that would come from a carbon cap or tax or from low carbon fuel standards, all of which are being enacted now on a state or regional level and are likely to come into play in the next decade.  And we are just starting to analyze the effect of the stimulus mandates on carbon reductions but they will also accelerate oil savings.

Today, oil from the Middle East makes up 2.3 million barrels a day and from Venezuela another 1.3 million for a total of 3.6 million barrels a day, according to the Annual Energy Outlook.  By 2020, oil from the Middle East and Venezuela is forecast to be 3.3 million barrels a day. That means that if we can save 4.4 million barrels, there is an additional 1 million that can be offset, the equivalent of what we now import from the tar sands.  But it also means that there is no room to allow our dependence on tar sands oil to grow over the next decade.

What's encouraging is that the savings opportunities keep growing.  By 2025 and 2030, under the same measures, we can reduce 7.2 and 9.7 million barrels a day respectively, cutting deeply into both our current 20 million barrels a day oil use and future projections. That means that savings we make in the nearer term are not undercut by a surge in demand later.  The opposite is true, where these measures help bring about a continual decline in demand.

Most importantly, cutting our oil demand is also the cleanest path. By cutting emissions of greenhouse gases and other pollution, the U.S. can play a leadership role in international efforts to solve global warming.  

We are at an energy crossroads with Canada

We are at a critical crossroads with Canada as our President and Canada's Prime Minister meet.  Expanded reliance on tar sands oil will require a massive investment in infrastructure that would effectively lock us in to decades of use of this dirty fuel and greatly expand our global warming pollution. Other than Canada itself, the U.S. is the only customer for tar sands oil. The main artery that brings this oil into the U.S., the Enbridge pipeline, is being expanded and extended in the Midwest.  Two new pipelines under construction - the Keystone and Keystone XL - will increase the flow into Midwestern refineries. In turn, these refineries are being expanded and retrofitted specifically to take tar sands oil.  Texas and the Gulf states are next.

But due to the financial crisis and low price of oil, investment has slowed considerably. The threat of global warming regulation has also undoubtedly played a role.  This provides a natural respite for our leaders to think through which energy future we want.

What our analysis shows is that clean energy and energy efficiency can truly be a substitute, not simply one of multiple energy sources (or "all of the above" as its known in policy circles) needed to fuel our future. We can kick the tar sands habit and produce the energy we need.  What could be better news as the President heads up to Canada?    




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