the most destructive project on Earth

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A Sticky Situation

Alberta's tar sands pose messy challenge for investors and ducks alike

By Emily Stone and Shelley Alpern

21 Nov 2008

 

 

Photo: Stop the Tar Sands

 

What could beat Amazonian deforestation, massive coal plants next to elementary

schools, factory farming, mountaintop removal, and giant trash heaps in the

middle of the ocean for the title of " the most destructive project on Earth " ?

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Cue the tar sands, a vast expanse of the Albertan province opened up to rampant

drilling, surface mining, and pipelines through what was once a strikingly

beautiful section of the Canadian boreal forest. Canada's Environmental Defense

deemed it " the most destructive project on Earth " last February.

 

While this region holds immense ecological and aesthetic value on the planetary

exterior (it is the largest remaining unspoiled forest and wetland ecosystem and

one of the most biodiverse carbon sinks on Earth), its subterranean layers are

rich with oil that is deeply embedded in an earth and sand mixture called

bitumen. Starting to imagine what this project might look like?

 

Some have likened it to Mordor, the fictional land ravaged by the Dark Lord in

the Lord of the Rings trilogy. Huge swathes of forest -- the tar sands

developments are visible from space -- have been leveled to mine the earth, make

way for processing facilities, and provide space for tailing ponds. The projects

strain the freshwater capacity from the Athabasca River, and the downstream

pollution is linked, some believe, to rising cancer rates in indigenous

communities.

 

 

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ADVERTISING POLICY

 

The world's leading oil and gas companies are salivating over Alberta's tar

sands, thanks to record oil prices for much of 2008 and declining access to the

fossil fuel resources in countries like Russia and Venezuela. Alberta is

estimated to be home to 60 percent of the world's more easily accessed oil

reserves.

 

The pipe dream of North American oil independence has spurred a gold rush to

this fossil fuel playground. A who's who of Western oil companies comprises the

all-star lineup of tar sands players -- Chevron, ConocoPhillips, Imperial Oil,

Shell, BP, Syncrude, Statoil, PetroCanada, and more. Unfortunately, tar sands

drilling and mining has only just begun. Companies plan to spend as much as $125

billion to expand mining, drilling, and refining operations over the next 10 to

15 years. And neither the Canadian federal nor provincial governments have

stepped up to the challenge of planning for the cumulative impact of all the

development.

 

Alongside environmental watchdogs, shareholders are raising red flags and

demanding that drillers move slowly and cautiously. In the U.S., our firms,

Green Century Capital Management and Trillium Asset Management Corporation, two

socially responsible investment companies, have been mobilizing at Chevron and

ConocoPhillips. The Canadian mutual funds company Ethical Funds has engaged a

number of Canadian oil and gas firms and produced several useful reports on the

tar sands. Investors in the U.K. and Europe have been approaching BP and Shell.

 

Green Century and Trillium filed shareholder resolutions in 2008 at Chevron and

ConocoPhillips, outlining key risks and asking the companies to report on

environmental damage resulting from their expanding tar sands operations,

including the implications of discontinuing expansion plans.

 

 

Athabasca tar sands.

Photo: katakanadianIncluded in the laundry list of obvious risks to the

companies, the investors noted impending costly regulations on carbon emissions

in both Canada and the U.S. (the tar sands' largest customer); declining

operational water availability; reputational damage due to impact on air

quality, water quality, and wildlife; and the possibility of litigative and

competitive threat.

 

In making our case to our fellow shareholders, Green Century and Trillium noted

the particularly worrisome hazard surrounding tailing ponds from mining

operations, acutely toxic pools of sludge that cover almost 20 square miles of

forest and bogs. Last year, these nasty puddles were splashed across

international headlines when an entire flock of 500 migrating ducks was found

dead in one of Syncrude's massive tailing ponds.

 

Nearly 30 percent of both companies' shareholders supported the proposals

presented by Green Century and Trillium. This is a very high vote in the

rarefied world of shareholder proposals -- not quite a vote of no confidence,

but a strong signal to executives that a critical minority of stockowners is not

on board with the program.

 

Green Century and Trillium are now pursuing follow-up meetings with both

companies to discuss last year's resolutions and the companies' plans to address

investor concerns.

 

In the end, the tar sands are a textbook example of our failure as human beings

to look beyond short-term profit maximization. In a rational global economy

capable of looking to long-term rewards, we would now be enjoying the economic,

political, and environmental benefits of two decades of aggressive efficiency

measures, phased-down fossil-fuel use, and the mass distribution of renewable

energy technologies.

 

Instead, we have new financial maelstroms threatening our economy every week,

the " most destructive project on Earth " annihilating one of our planet's most

valuable ecological resources, and ... hundreds of unnecessarily dead ducks.

 

 

Emily Stone is the Shareholder Advocate at Green Century Capital Management.

Shelley Alpern is the Director of Social Research and Advocacy at Trillium Asset

Management Corporation.

 

 

 

 

 

 

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