JORDAN VERLAGE

Head in the Sands

Albertans call it a bonanza. World media call it dirty oil.

By Shannon Phillips

Some journalists would describe it as the gig from hell: get access to oil sands mining sites and oil company spokespeople in Fort McMurray on behalf of Al-Jazeera English. Produce that tour and those interviews for a TV show hosted by Avi Lewis, an activist journalist who doesn’t lob softball questions at anyone, especially oil companies. Do this in spring 2008, a couple of weeks after 500 ducks die in a Syncrude tailings pond and the entire oil sands industry is running for cover under the spotlight of the world’s media. If journalism was a reality TV challenge, this assignment was equal to eating the jar of live earthworms. 

Imagine our bad timing. We weren’t there for images of the ducks—Al-Jazeera’s interest in the oil sands had been months in the making. But the oil companies had circled the wagons and we were shut out all the same. Their PR people were cordial and professional about it, but the message was firm: no media from outside Alberta were getting anywhere near an oil sands operation in spring 2008, even if we weren’t at all interested in filming dead birds.

The show I was producing was about US politics, our coverage of the oil sands an extension of broader coverage of US energy security and independence. I explained this to Jason Chance, executive assistant to Minister of Energy Mel Knight, outlining the kinds of questions we would ask the minister—easy stuff, such as explaining Alberta’s lobbying efforts in Washington. I assured Chance we wouldn’t ask about the ducks. He scoffed. “Often international media say they aren’t going to ask about something, then they do on camera.” I explained that this interview would be different, that we weren’t interested in dirty tricks. Chase was unmoved. “You should try something completely different from the rest of the international media, then,” he said sarcastically, “and do a balanced story for a change.” 

We never did get the interview with the energy minister. The show itself is in limbo. This assignment thus far would’ve been hell—if it hadn’t made me understand a fundamental truth about being Albertan in the 21st century. The oil sands—the same commodity that makes us swagger as the rest of North America struggles with recession—are a global resource. We don’t control their fate. The fate of the oil sands lies with the global marketplace and, ultimately, global media.

Alberta’s oil sands are now a fixture in international news coverage. Starting in about 2005, when the Alberta government began peddling the oil sands “success story” via the trade office in Washington, DC, media from outside Canada made the daunting journey to Fort McMurray with increasing regularity. Beginning with such US media as The New York Times and CNN, an oil sands script emerged. The enormous amounts of money to be made, the desire for US independence from Middle Eastern oil and the ragged social edges of a boomtown bonanza were the top themes, followed by concerns about the environment and climate change. The environment always came after—and couched within—breathless hyperbole about the size of the mines, trucks, profits and oil deposits. The very last lines of a three-page 2005 New York Times special were a quote from federal environment minister at the time Stéphane Dion: “There is no environmental minister on earth who can stop the oil from coming out of the sand, because the money is too big.”

The fate of the oil sands lies with the global marketplace and, ultimately, the global media.

Until this year, the Alberta government was effectively the voice of the oil sands. The provincial government marketed the resource in Washington as a safe investment and figured prominently in coverage in The Economist, Financial Times and Business TV. The province also led trade missions to DC, where the oil sands’ potential as a secure supply of energy was a constant refrain, music to the Bush administration’s ears. Industry—small groups, never big players like the Canadian Association of Petroleum Producers (CAPP)—accompanied the province on those missions in a supporting role. In early 2008, the Alberta Enterprise Group (AEG), a small lobby group of Edmonton-based businesses staffed by former Conservative party fundraiser Tim Shipton, played an integral role in the DC trade mission, with AEG contracting Washington-based firm GWEST to get them access to Republican lawmakers. 

In other words, marketing the oil sands’ international image was left to the provincial government and a closed coterie of Conservative operatives, while oil companies took a back seat. Since 2006, that image has increasingly soured as European media have focused on the carbon footprint of oil sands extraction. In late 2007, London’s The Independent ran front-page headlines such as “The Biggest Environmental Crime in History,” the conservative Times of London editorialized that the oil sands were part of a “filthy habit,” and the even more conservative Financial Times warned that environmental problems and challenges by First Nations downstream of the oil sands posed a “reputational threat” for the world’s oil majors. Last summer, the Boston Globe called the oil sands “new dirty energy.” In July 2008, The Guardian fronted with “Canadians Ponder Future of Dirty Oil.”

By 2008, it became clear that the Alberta government was making a royal mess of the oil sands’ international image. Boasts that the province has legislation mandating the reduction of CO2 emissions intensity—rather than absolute emissions reductions as laid out in the Kyoto Protocol—rang hollow to UK and European journalists, who recognized “emissions intensity reduction” policies as Bush-speak for emissions status quo or even growth. Claims that just “0.01 per cent of the boreal forest” was being disturbed by surface mining were dismissed when journalists found that an area the size of Florida has already been slated for steam-assisted oil sands extraction in addition to open-pit mining sites. Even AEG’s Tim Shipton lamented the sorry state of Alberta’s PR strategies. Speaking to the Edmonton Journal in June, Shipton was forthright in his criticisms: “There seems to be a lack of urgency in dealing with this issue both from an industry and a government perspective… If we wait any longer to respond, the debate will be over before we even get started.”

Meanwhile, Alberta’s domestic press has remained relatively tame. For the past two years, only CBC radio has put significant resources into investigating and reporting on the downstream effects of oil sands development at Fort Chipewyan. When the Alberta Cancer Board announced a new study of suspected cancer clusters near Lake Athabasca (after previous studies by the provincial government, according to critics, were politicized and discredited), only CBC radio’s Sounds Like Canada covered the issue in any detail. When government news releases referred to their emissions intensity reductions as “reducing greenhouse gas emissions,” it was the small NDP opposition—not the press—that demanded the government stop issuing misleading statements. When the government announced new funding for carbon capture and storage, a two-page Edmonton Journal article on July 28 contained only four lines of text that questioned whether the technology might work in time to combat escalating greenhouse gas emissions. When, in spring 2008, the OECD (Organization for Economic Development & Cooperation)—an international organization of the world’s most developed economies, of which Canada is a member—criticized runaway growth in the oil sands without a viable climate change program, the only mention in the Alberta media was a Calgary Herald editorial talking about the OECD’s position on the future of the Heritage Trust Fund. And Alberta’s “emissions intensity” approach to reducing CO2 emissions—an approach that’s been shown to actually increase greenhouse gases as the economy grows—has been left entirely silent by the provincial press as the Conservatives have shifted their focus to carbon capture and storage.

In 2005, the Alberta government began peddling the oil sands “success story” in DC. Since then, that image has increasingly soured as European media have focused on the carbon footprint of oil sands extraction.

The world, it seems, doesn’t share the Alberta press’s view that our politicians should be treated with kid gloves. Call it Stockwell/Rona syndrome. Politicians who do well in Alberta often receive a rude awakening when they venture beyond the cocoon of the local press gallery into a world—whether Ottawa or the international stage—in which journalists demand substantial answers. It happened to Stockwell Day when he went from popular Alberta treasurer to national laughingstock as leader of the Canadian Alliance. It happened to Rona Ambrose as she attempted to sell Canada’s abrogation of the Kyoto Protocol at global climate change talks. And it’s been happening to the Alberta government over the past year. 

In mid-2008, the Alberta government’s efforts to promote the oil sands in the US were further undermined. Efforts to secure short meetings with Republican lawmakers—and gimmicks such as parking a massive oil sands dumptruck on the National Mall in Washington as part of Alberta’s exhibit at the Smithsonian—proved meaningless compared to other groups’ concrete actions aimed at oil sands development. In May, California governor Arnold Schwarzenegger moved to cut his state’s use of high-carbon petroleum resources from Alberta. In June, over 1,000 US mayors voted to boycott energy with a large carbon footprint and were explicit in their condemnation of the oil sands. 

dec-08_head-in-the-sands_albertaviews-1Through early May, as I was attempting to produce a show on the oil sands for an international audience, the oil sands industry was trying to dig itself out of an international public relations quagmire. Rather than rely on the government, oil companies decided to go on the offensive. A few short weeks later, CAPP appeared more regularly in coverage of the oil sands. Albian Sands—a consortium of Shell, Chevron and Marathon—began to once again offer tours for international media. A tour Al-Jazeera English was offered in mid-July included Shell paying for our airplane ride up to Fort McMurray, tours of the sites, visits in Calgary boardrooms and free tickets to the rodeo at the Calgary Stampede. (We declined.)

Industry also stepped up the web war. In July, CAPP launched a new website, www.canadasoilsands.ca. The Athabasca Regional Issues Working Group, an association of 28 companies in the Wood Buffalo region, rebranded itself the Oil Sands Developers Group “to more clearly reflect [our] ability to provide accurate, credible information about oil sands development from a regional perspective in light of broadening awareness and interest in Canada’s oil sands.” Clearly industry was keen to bump up their visibility—if only by registering a couple of domain names and garnering more hits when “Alberta oil sands” is typed into the Google search engine.

The province, for its part, launched a $25-million advertising (some would say “greenwashing”) campaign aimed at American lawmakers, promoting technological solutions to environmental problems caused by oil sands development. Shortly after the ducks, the mayors and the Schwarzenegger fiascos, the province announced a $2-billion gift to the oil sands sector to encourage investment in carbon capture and storage. 

International media attention to the environmental consequences of unrestrained oil sands development didn’t come out of thin air. Two factors have bounced off each other, worked together and amplified one another over the past three years.

Most observers point to the activities of environmental groups, especially Greenpeace. Greenpeace oil sands campaigner Mike Hudema says it’s true that his organization’s TV and YouTube-friendly tactics have ensured colourful coverage beyond our province’s boundaries, but he says the organization’s motivation for establishing itself in Alberta was to increase opposition right here at home. “Greenpeace recognized that Alberta is a different situation… they saw that by hiring people from here, and by crafting a local message but using Greenpeace’s megaphone and higher-profile tactics, a resistance to the oil sands would build here.

“At the same time, Greenpeace is an international organization, with partnerships around the world. And so it’s easy for us to work with our counterparts in the Netherlands [putting pressure on Royal Dutch Shell’s investments in the oil sands], Norway in terms of Statoil, and the UK with respect to BP… we work together and end up with much more activity around the world.”

Hudema says the real action around the oil sands began less than a year ago with the US Energy Security & Independence Act, which included a clause that sought to prohibit the US government, including the military, from procuring fuels with a higher greenhouse gas content than conventional fuels. The Financial Times speculated in Mar 2008 that “the government was likely to seek a way around compliance, such as by claiming [that] carbon from the oil sands projects will be captured and stored once technology is available.” It was only weeks later that Stelmach announced the $2-billion investment in carbon capture and storage.

Hudema argues the American attention encouraged US-based activists to weigh in just as US energy independence and “addiction to oil” were becoming issues in the presidential campaign.

Born and raised in Alberta, Hudema worked as a climate change campaigner in San Francisco before taking his current post with Greenpeace. He says US activists were emboldened by George W. Bush’s 2005 State of the Union address, in which he declared that “America is addicted to oil.” 

“Activists saw that statement as an opportunity to start their own national conversation about climate change… but the tar sands really put a stop to that… essentially, the conversation moved away from ‘how can we reduce our consumption,’ to ‘here’s a cheap, safe, plentiful source of oil in Canada so Americans don’t have to change their habits at all.’ ” Hudema says that runaway growth in the oil sands thus became a catalyst for American environmentalists’ interest in the boreal forest, Canadian climate change policy, water use and downstream effects on aboriginal communities. 

As American and European activists have taken the issue global, they’ve built support for getting their local communities out of the oil sands. “It’s a global issue,” says Hudema. “Many small-town American communities are affected by the new bitumen pipelines and upgraders, and they’re fighting them.” So many communities are affected by unfettered oil sands growth that resistance now comes from all over the world, from people who employ many different tactics. In other words, there are so many critics that not even the 300-plus staff of Stelmach’s Public Affairs Bureau can handle them all.

It would be foolish to pretend we ever had much control over what goes on in the oil sands; we gave up control over the “Athabasca tar sands” in the 1970s. Today 78 per cent of oil sands production is foreign-owned.

But there’s a quieter dynamic at work. European press coverage of the oil sands has been increasingly critical as the public’s understanding of climate change has become more sophisticated on that continent. Individual citizens in European countries are, on the whole, more attuned to their own individual carbon footprints, but it’s not just about public opinion—climate change is big business in Europe. Since 2005, the EU has been implementing a carbon cap and trade system, creating an industry out of trading pollution credits. At the same time, restrictions on emissions, taxes and other government incentives have spurred investment in green technology. According to the OECD, government policy mandating carbon reductions has been the catalyst for new investments and economic activity in the renewables sector. Vestas, the Danish wind turbine manufacturer, for example, now has the same market capitalization as the Ford Motor Company. According to the EU Environment Agency, investments in environmental technology were €60-billion in 2006 alone, “providing the same kind of economic stimulus as the car industry once did.” 

The business of climate change—a price on carbon, and governments demanding industrial processes with lower emissions—is what’s behind the flurry of more recent European coverage of the oil sands. In September 2008, UK-based Cooperative Asset Management (CAM), a $6-billion investment house, announced they would campaign against investment in “unconventionals”—and singled out BP and Shell oil sands activity for special scrutiny. 

CAM argues that the environmental drawbacks of increased investment in the oil sands are eventually going to become “financial drawbacks.” Spokesperson Niall O’Shea explains that “the basis of our concern really comes from a realistic, long-term view of global regulation and parallel investment around the world in low-carbon solutions in an increasingly carbon-constrained world.” Citing concerns about “stranded assets” when the global playing field shifts, O’Shea says that increasing investment in oil sands is not wise economics. “What we do not want is to find that oil companies are left with uneconomic, politically unacceptable assets.”

CAM doesn’t buy the Alberta government’s assertion that carbon capture and storage will reduce emissions enough to mitigate concerns about oil sands’ carbon intensity. “You would be hard pressed to find a credible authority who is confident that CCS will be effective for most oil sands operations by 2018 as government regulation implies,” says O’Shea. “A corollary of this is suspending further expansion until we can be confident that unconventionals can survive in a carbon-constrained world.” Similarly, O’Shea takes a dim view of Alberta’s assertion that they have climate change legislation and strong environmental regulations. “The point about legislative compliance has to have regard to the strictness of the legislation. Fines for non-compliance are small, and using emissions intensity only as the key requirement… misunderstands the gravity of large, absolute increases in emissions.”

What O’Shea—and the billion-dollar investment house he speaks for—is saying to Albertans is this: a price on carbon is coming to the global economy. Indeed, the EU is already talking about “carbon tariffs”—essentially, slapping a tax on goods coming from countries lacking adequate climate change policies. And some investment firms, whose job it is to minimize risk, are beginning to factor in the dangers associated with investing their money in oil companies that have hitched their wagon to Alberta’s rapidly antiquating approach to the environment and climate change.

dec-08_head-in-the-sands3_albertaviews-1

Environment Minister Rob Renner and Premier Stelmach. Alberta’s $25-million “clean oil” ad campaign is “greenwashing” say critics. (Photo Courtesy of the Government of Alberta)

It would be foolish for Albertans to pretend we ever really had much control over what goes on in the oil sands. We gave up an ownership stake in the “Athabasca tar sands” in the 1970s, when the province chose to forgo public ownership or development in favour of ceding exploration and development to Syncrude, a company mostly controlled by US oil interests. Today, it’s estimated that 78 per cent of oil sands production is owned by foreign corporations.

Of course, revenue from the resource is within the government’s control. However, after a massive fear campaign led by oil companies during the 2007 royalty review, Alberta’s revenues from the oil sands remain low compared to rents in other oil-rich jurisdictions. As for how much we export and at what price, Canada signed those rights away in the 1988 Free Trade Agreement and replicated the language in NAFTA in 1993. The majority of Alberta’s oil production goes to the US, and, according to the terms of NAFTA, exports to the US as a percentage of total output cannot fall.

Production, pricing and ownership are aspects of resource control that multinational oil companies prefer be ceded to market forces. The Alberta electorate seems to agree, as we keep electing massive Conservative majorities and express only guarded support for government interventions in the economy on behalf of the environment.

But it turns out it doesn’t matter what we think. Although a recent survey showed that 70 per cent of Albertans disagree with the term “dirty oil” to describe the oil sands, that hasn’t stopped London newspapers—read by the world’s financial elite—from describing it that way. Alberta voters rejected the Dion Liberals’ “Green Shift,” which essentially put a price on carbon, but that doesn’t matter either, because the world is moving that way whether we like it or not. We re-elected a government that has legislated increases in CO2 emissions via a sleight of hand called “emissions intensity,” but large players in the global economy are already demanding that we get our policies in line with the rest of the world or risk divestment. We’ve let most of our control over the oil sands go to international players, including the global news media and opinion makers. So we’re now at the mercy of all of these players—not just the ones of our own choosing. #

Shannon Phillips is an independent journalist based in Lethbridge. She also writes for the Parkland Post and Vue Weekly.

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