Harper's Shell Game

Harper’s Shell Game Why Tar Sands Pipelines Are Not in Canada’s National Interest Research and writing Keith Stewart works on energy policy and green energy solutions for Greenpeace Canada, building on 14 years of experience as an environmental researcher and advocate. He has a Ph.D. in political science from York University and currently teaches a course on Energy Policy and the Environment at the University of Toronto. Acknowledgements Greenpeace Canada would like to thank our 86,000 Canadian supporters who fund everything we do, including this report. Without your individual and ongoing support Greenpeace could not function independently of government or corporate funding. We would also like to thank the Oak Foundation for its support of Greenpeace Canada’s climate and energy campaign. About Greenpeace Greenpeace is an independent, campaigning organization which uses non-violent, creative confrontation to expose global environmental problems, and to force the solutions which are essential to a green and peaceful future. Greenpeace’s goal is to ensure the ability of the earth to nurture life in all its diversity. Greenpeace is not affiliated with any political party. We do not solicit or accept donations from corporations or governments, in order that we may always act on behalf of the planet first and foremost. Greenpeace Canada relies on donations from individual supporters for approximately ninety five percent of our revenues, and on grants from foundations for the remainder. Greenpeace does not accept donations that could compromise its independence, objectives or integrity. Design: Peartree Design Photo Credits: © Jiri Rezac / Greenpeace TABLE OF CONTENTS Executive Summary 4 Introduction 5 Energy Superpower Ambitions 6 A Tar Sands Pipeline to Asia? 11 Shell in the Tar Sands: Fuelling Climate Change 15 Shell in the Tar Sands: New Mines, Old Problems 18 Investing in the Tar Sands: An Act of Desperation? 24 Tar Sands and Democracy: A Caustic Mixture 28 Tar Sands Mines and Pipelines: Not in the National Interest 30 Endnotes 32 3 EXECUTIVE SUMMARY The proposed Enbridge Northern Gateway pipeline from Bad for the economy: The Organization for Economic Alberta’s tar sands to the British Columbia coast has become Cooperation and Development, Deutsche Bank, and the a major political flashpoint because it is vital to achieving Alberta Premier’s Council on Economic Strategy have all Prime Minister Stephen Harper’s ambition of transforming warned that building Canada’s future on the tar sands is a Canada into a tar sands–based “energy superpower.” risky long-term investment strategy. Further investments in tar sands infrastructure will lock Canada into a high- To realize this vision, the Harper government has teamed carbon economy, at the expense of renewable energy up with multinational oil companies in an unprecedented alternatives. This risks leaving Canada ill-prepared to assault on nature and democracy. This report uses prosper in a world that is taking action on climate change. documents obtained under Access to Information legislation and from the public record to explore how and why one oil Bad for democracy: Documents obtained under Access company—Shell—has joined with the Harper government in to Information legislation detail the degree of collusion an aggressive “Oil Sands Advocacy Strategy” that aims to between Shell and the Harper government to undermine undermine environmental legislation in Canada, the United clean energy and environmental protection legislation that States and Europe. would limit the expansion of the tar sands. This behind- the-scenes lobbying strategy is accompanied by public In sharp contrast to many other oil companies, Shell has statements and legislative changes intended to intimidate long accepted the scientific consensus on climate change environmental and Aboriginal groups, who are labelled as and publicly called for action to reduce greenhouse gas “adversaries” in internal government documents and as emissions. Yet over the last decade, the company has largely “radicals” in the government’s public statements. abandoned its investments in renewable energy in favour of a major expansion of its tar sands operations. These This attempt to limit free speech is fundamentally expansion plans would enable production of enough oil undemocratic, but it is being aggressively pursued in order to fill Enbridge’s proposed Northern Gateway pipeline and to pre-empt a debate on what kind of energy strategy they include two major tar sands mining projects that are would be in Canada’s national interest. undergoing environmental assessments at the same time as The tar sands are not our only option for energy. The latest the proposed pipeline. research from the Intergovernmental Panel on Climate In addition to this carbon-intensive investment strategy, Change (IPCC) shows that we have the technology to solve Shell has played a key political role in the Harper government’s our climate crisis. The International Energy Agency (IEA) has lobbying against low-carbon fuels legislation in the US and detailed how it is much more cost-effective to start deploying Europe, and has actively supported the planned construction these technologies now than to wait. The worst option of all, of the Northern Gateway pipeline. according to the IEA, would be to proceed with business as usual and hence fail to stop global warming. The Harper government’s energy superpower ambitions may be in the interest of oil companies like Shell that now rely on Fortunately, we know what kinds of public policies are the more expensive and polluting oil from the tar sands to necessary to rapidly deploy these climate solutions and bring replace their rapidly declining reserves of conventional oil. about what Greenpeace calls an Energy [R]evolution. But such a strategy is not in the best interest of Canadians, Our challenge is that these policies are opposed by powerful because it is the following: interests, like Shell and the Harper government. These Bad for the environment: Scraping the bottom of the players are choosing to pursue the narrow, short-term barrel by increasing production of the more carbon- interests of oil industry profits over our common interest in intensive tar sands oil will put us on a pathway to building a green economy that will stop global warming. catastrophic levels of global warming. Tar sands expansion When viewed through the lens of this broader perspective, also increases the regional ecological destruction and it is clear that projects like Shell’s new tar sands mines and associated health impacts on local communities, while Enbridge’s Northern Gateway pipeline are not in Canada’s creating new risks from the inevitable oil spills in British national interest. Columbia from tar sands pipelines and tanker traffic. 4 There are related concerns over how the proposal INTRODUCTION disregards the rights of BC First Nations, who have Prime Minister Stephen Harper and his oil industry publicly and repeatedly stated their united opposition allies are willing to turn the proposal by Enbridge to to the project based on the threat it poses to the build a new tar sands pipeline through northern British region’s lands and waters—and hence to their culture Columbia into “the fiercest environmental standoff ever and livelihoods. seen in Canada”1 for one simple reason: without new There are fears over how the federal government’s pipelines, the planned expansion of tar sands oil output apparent determination to push this pipeline through at will come to a screeching halt. any cost will undermine Canadian democracy and the The looming bottleneck is a problem for the Alberta legal framework for environmental protection. and federal governments, who are eager to transform And beyond the pipeline itself, there are concerns Canada into a bitumen-based “energy superpower.” over how new pipelines would enable the rapid Their ambition to quadruple tar sands output is expansion of the tar sands, fuelling global warming facing two major constraints. First, existing pipelines and overloading regional ecosystems and downstream are near capacity, with some analysts suggesting communities with the toxic byproducts. that production could outstrip this capacity as soon On the technical side, the federal government has as 2015.2 Secondly, the demand for oil has been excluded upstream changes, such as increases in dropping in the US and is expected to continue to overall production, from the terms of reference for the decline, thanks to new vehicle fuel efficiency standards. review panel assessing the Enbridge pipeline, despite The solution to both of these problems is, according the fact that pipelines and tar sands expansion are to the federal government, to pursue direct access inextricably entwined. to growing Asian markets by building new pipeline The failure to consider upstream impacts is not an capacity that would ship bitumen from the tar sands to oversight. The Harper government is encouraging the British Columbia coast, where it could be loaded oil companies to invest in the tar sands in order to onto supertankers. fulfill the Prime Minister’s political ambitions of turning Enbridge’s proposed Northern Gateway pipeline is Canada into an “energy superpower.” To realize this also viewed as a vital piece of infrastructure by the ambition, the federal government has teamed up with major multinational oil companies. As they run out what it calls “like-minded allies” from the Canadian of cheaper, more easily–accessible conventional oil, Association of Petroleum Producers (with Shell they are disproportionately turning to the tar sands to undertaking key organizing work) in an aggressive replace their reserves. pro–tar sands campaign that seeks to reshape Shell, for example, is looking to triple its output from Canadian politics and society. the tar sands in the coming years.3 It has two massive Around the world, oil wealth has proven to have a new tar sands mining proposals going through the negative impact on democracy as corporate interests environmental assessment process in parallel with take priority over those of citizens.

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