Tar sands: Too risky say investors

As the thousands of journalists, government officials and so-called “non-governmental organizations” descend on Copenhagen, the temperature is rising around the tar sands issue.  But perhaps the most interesting tar sands development this week happened right here in Washington D.C.

Today, a group of investor organizations representing approximately $127 billion in assets under management formally stepped into the fray on the tar sands issue, calling them risky investments in a letter to the Senate. This letter follows on the tail of another report last week by a Canadian investment company stating that companies extracting tar sands were not disclosing the risks adequately.

In today's letter, the investor groups point to the fact that 85% of the deferred or cancelled non-OPEC oil production supply during the recession has been in the tar sands.  They also cited the numerous liabilities associated with damage to the land, air and water and disregard for the rights of the native communities bordering the areas of extraction, pipeline pathways and refineries.  But top on their list is the unmanaged climate liability, as public concern about global warming grows, regulations are adopted to rein in carbon pollution, and oil prices swing up and down.  

Taking direct aim at those that would argue for expansion of the tar sands and development of other high carbon fuels as secure sources to meet our future fuel needs, the investor letter says, “Legislation that makes the United States more dependent on these energy sources could worsen the impact of future volatility”. 

Instead the group urges that the federal fuel procurement provision of the 2007 energy bill be preserved and that a Low Carbon Fuel Standard (LCFS) be adopted by Congress, similar to the one adopted in California saying, “It is clear that such reductions will eventually be obligatory, and we must ensure that our economy is prepared for a carbon constrained future.  Accordingly, we must send a consistent signal through avenues such as Section 526 and an LCFS that encourages the growth of a robust clean fuels market.”

For those that might not be obsessive observers’ of all things tar sands (I do not count myself in this group), you might miss the significance of their endorsement of these two “crucibles” in the effort to stem the growth in tar sands and other dirty fuels. Over the past few years, the Canadians have hired legions of lobbyists and sent in their ambassador and tar sands Premiers – Alberta and Saskachewan -  to fight back these provisions in Congress and at the state level.  The American Petroleum Institute has waged an “astroturf” campaign against the LCFS (astroturf as opposed to real grassroots) and the major oil companies have spent millions to defeat the pending climate legislation in the U.S. and Canada. But, as one of these lobbyists is quoted saying today, "The Low-Carbon Fuel Standard just keeps popping up…It's a bit like whack-a-mole. It gets hammered down, but it doesn't go away."

This letter swipes that hammer away and takes us one important step closer to gaining passage of a LCFS that will enable the U.S. to start to reduce the whopping 30% of the carbon emissions that come from our transportation sector.

That's great news. Tar sands expansion is indeed looking riskier and riskier.

To see the Green Century press release, go to:

http://www.greencentury.com/news/news/Investors_Voice_Opposition_to_High-Carbon_Fuel_Policy

Comments