The energy bubble has burst when you need tar sands

Shell, BP and other oil companies at the centre of the tar sands revolution in Canada are facing a backlash from the Co-operative and other members of the ethical investment community determined to bring a halt to these operations for environmental reasons.

A joint report from Co-operative Investments and the wildlife charity WWF released today will be followed up in September by a meeting of the UK Social Investment Forum (UKSIF) to press for an end to this carbon-intensive activity.

The tar sands business, by which crude oil is produced through highly carbon and water-intensive extraction and treatment procedures, risks tipping the world into an irreversible process of global warming, critics claim.

The Co-op and WWF are calling for a global halt to new licensing for tar sands and similar oil operations known as “unconventional fuels”.

They want the UK and other countries to prohibit the sale and distribution of any oil products with higher emissions than traditional petrol.

The move comes as Shell and other industry leaders have pledged to spend more than $125bn (£63bn) by 2015 to develop these new sources of petrol at a time of very high crude prices and fears of supply shortages.

The oil companies say the world needs these reserves, which are expensive to produce but are located in a politically stable area, unlike the traditional reserves of the Middle East or Russia. But critics say the environmental price is disastrous.

Paul Monaghan, head of social goals and sustainability at the Co-op group, said: “The current rush to invest in unconventional fossil fuels is wholly inappropriate and, due to their carbon intensity, these projects risk dangerous levels of climate change.”

The new report, Unconventional Oil: Scraping the Bottom of the Barrel, will be used as the basis for discussion with the Co-op’s 6.5 million customers and for garnering support from more than 200 other members of the UKSIF.

James Leaton, senior policy officer at WWF-UK, said: “Unconventional fuel sources may seem attractive in the short term but ultimately the environmental and economic costs are unthinkable.

“Companies and investors claim to recognise the need to tackle climate change and support international efforts such as Kyoto [climate change protocol]. In oil sands we have an activity that is going against this imperative and undermining Canada’s Kyoto commitments, so it is time for investors to challenge this strategy.”

Shell said: “The global demand for energy is growing. This will mean greater demand for oil and gas, too. Supplies of accessible, conventional oil and gas cannot keep up with the demand growth. As a result, society has little choice but to add other sources of energy including ‘unconventional’ fuels like oil sands.”

BP said fossil fuels were still going to be needed well into the future even if there were tough restrictions on carbon dioxide emissions.

“Reserves of oil sands represent a significant untapped resource from a politically stable country. The Husky joint venture [BP is planning] will use a process known as steam-assisted gravity drainage, not mining, which produces oil in-situ with a significant reduction of both water use and overall environmental footprint,” it said in a statement.

BP added that it was a “keen” supporter of mandatory market mechanisms such as cap-and-trade programmes on greenhouse gases: “We support national and international trading programmes and have factored the future costs of carbon in our analysis of the project’s value.”

Source - The guardian