Quantcast
Environmental News for a Healthier Planet and Life

Public Opposition Costs Tar Sands Industry a Staggering $17B

Energy
Public Opposition Costs Tar Sands Industry a Staggering $17B

Once viewed by those in the fossil fuel industry as one of their brightest hopes for more big profits, tar sands extraction is looking riskier and costlier.

Opposition to Keystone XL and other tar sands-related projects has cost the industry dearly.
Photo credit: Shutterstock

As Republicans in the U.S. continue to look for ways to ram through the Keystone XL pipeline after years of persistent and intensifying resistance from community and environmental groups, farmers and Native tribes, and TransCanada, the biggest company developing the Alberta tar sands, moves forward with a proposal for the even longer Energy East pipeline, there are signs that extracting oil from tar sands bitumen, one of the dirtiest forms of energy extraction, may be hitting some hard times.

And the protests may be a big part of the impact, along with plummeting oil prices, which are making both tar sands extraction and fracking less lucrative. Anti-tar sands actions have cost the industry $17 billion in revenue from 2010—about the time the anti-fracking campaign started—and 2013, according to a report published by the Institute for Energy Economics and Financial Analysis (IEEFA) and Oil Change International. It assesses for the first time how much the opposition has cost the industry—and what the carbon impact of that has been.

"The Keystone XL tar sands pipeline is one of the most talked-about North American energy and political issues of the era. Once thought inevitable, the project and Canada’s plan to expand tar sands production have been confronted by an accumulation of economic and political risks creating a veritable ‘carbon blockade,'" it says.

The report, Material Risks: How Public Accountability Is Slowing Tar Sands Development, revealed that tar sands exploration and extraction has lost almost $31 billion in that time period. It estimated that 55 percent of that was due to protests against tar sands development. Another $13.8 billion has been lost due to changes in the oil market.

“Industry officials never anticipated the level and intensity of public opposition to their massive build-out plans,” Oil Change International's executive director Steve Kretzmann told the London Guardian. “Legal and other challenges are raising new issues related to environmental protection, indigenous rights and the disruptive impact of new pipeline proposals. Business as usual for Big Oil—particularly in the tar sands—is over.”

It pointed out that lack of access to a market for its product "caused in large part by public accountability actions driven by pipeline campaigns," played an important part in the cancellation of three major tar sands projects so far in 2014, projects that would have released 2.8 billion tons of carbon into the atmosphere.

And, as Big Oil salivates over the possibility of a Republican-controlled Congress pushing President Obama to the wall to approve Keystone XL—possibly even with threats of impeachment if he does not give in to industry wishes—they're facing the unimpeachable reality of an oil glut and price drops, making investment in tar sands extraction still more unprofitable. The study said that nine of the ten leading Canadian tar sands producers underperformed the stock market in the last five years.

The report concludes, "It is expected that sometime during late 2014 or early 2015 the United States government will make a critical decision that could move the project forward or cause [Keystone XL's] cancellation or further delay. Whatever the decision, the storyline of unfettered growth attached to Keystoneand other tar sands projects has been permanently altered. Growing public sentiment to find alternatives to fossil fuels will drive much of the dialogue."

"This falling price—coupled with the growing grassroots mobilization against tar sands and—means that actually it’s the anti-oil movement who, for once have reason to be cheerful, no matter what happens in the midterm elections," wrote Oil Change International contributing editor Andy Rowell.

YOU MIGHT ALSO LIKE

Energy East Pipeline: TransCanada's Keystone XL on Steroids

Cumulative Climate Impacts of Tar Sands Pipelines

As Keystone XL Dominoes Fall, Time to Arrest Tar Sands Industry

Journalists film a protest by the environmental organization BUND at the Datteln coal-fired power plant in North Rhine-Westphalia, Germany on April 23, 2020. Bernd Thissen / picture alliance via Getty Images

By Jessica Corbett

Lead partners of a global consortium of news outlets that aims to improve reporting on the climate emergency released a statement on Monday urging journalists everywhere to treat their coverage of the rapidly heating planet with the same same level of urgency and intensity as they have the COVID-19 pandemic.

Read More Show Less
EcoWatch Daily Newsletter
Airborne microplastics are turning up in remote regions of the world, including the remote Altai mountains in Siberia. Kirill Kukhmar / TASS / Getty Images

Scientists consider plastic pollution one of the "most pressing environmental and social issues of the 21st century," but so far, microplastic research has mostly focused on the impact on rivers and oceans.

Read More Show Less
Trending
A laborer works at the site of a rare earth metals mine at Nancheng county, Jiangxi province, China on Oct. 7, 2010. Jie Zhao / Corbis via Getty Images

By Michel Penke

More than every second person in the world now has a cellphone, and manufacturers are rolling out bigger, better, slicker models all the time. Many, however, have a bloody history.

Read More Show Less
Scientists are studying barley, the key ingredient in beer. Ridofranz / Getty Images

Researchers at UC-Riverside are investigating how barley, a key ingredient in beer, survives in such a wide variety of climates with hopes of learning what exactly makes it so resilient across climates.

Read More Show Less
Air France airplanes parked at the Charles de Gaulle/Roissy airport on March 24, 2020. SAMSON / AFP via Getty Images

France moved one step closer this weekend to banning short-haul flights in an attempt to fight the climate crisis.

Read More Show Less