Tar Sands: How Trade Rules Surrender Sovereignty and Extend Corporate Rights


Neoliberalism exacerbates climate change and codifies the subjugation of indigenous communities through trade agreement rules that allow corporations to control natural resources and challenge government regulations. Liberalized trade and economic regimes promote policies that incentivize unrestricted extraction and access to resources without adequate consideration for maintaining social and environmental integrity. These policies result in systemic mismanagement of natural resources. Currently, free trade negotiations on energy focus primarily on unconventional fuels, characterized by notably higher life-cycle greenhouse gas (GHG) emissions than conventional oil. Tar sands are a form of unconventional oil and are a model of how trade rules negatively influence climate policy and aid in the violation of vulnerable communities. In a broader sense we are all affected by climate change, from the frequency of weather extremes we experience to the food crops we grow and consume, to the price we pay at the grocery store. Free trade has failed, for people and the planet, and we need to acknowledge its shortcomings before we can seriously address climate change and move away from the precipice of climate-induced disaster.

Agriculture is intrinsically connected to climate patterns. Crops are vulnerable to weather extremes and volatility. Subsequently, commodity market prices are influenced by the volatility of crop harvests. The frequency of drought, floods and other extreme weather–related phenomena have increased due to climate change. Since its establishment, the Intergovernmental Panel on Climate Change (IPCC) has reported on human activity’s contribution to increased greenhouse gas (GHG) emissions and the resulting climate change impacts.1 These IPCC findings are reinforced in the National Climate Assessment from the U.S. Global Change Research Program.2

In light of these facts, the current path of industry and consumption seem counterintuitive. Conventional oil reserves have been dwindling and oil companies are investing in unconventional sources to replace the projected conventional deficits. Unconventional sources, by nature, require more energy expenditure for extraction and processing, and therefore emit more overall life cycle GHGs. Unconventional fuels magnify climate change effects in exchange for comparatively less net energy output than conventional oil. The tar sands in Alberta, Canada are a source of unconventional oil.

The extraction and processing of tar sands bitumen is characterized by the stripping of boreal forests, evisceration of peatland and bogs, extensive water use resulting in toxic tailings ponds, high volumes of natural gas use to heat water in a steam assisted extraction process and greater carbon emissions due to more laborious processing.3 These attributes alone constitute a catastrophe. However, expanding this catastrophe are a number of negative social impacts attributable to the tar sands and its management. Foremost, the Athabasca Chipewyan First Nation and the Mikisew Cree First Nation in Alberta have experienced violations of their treaty no. 8 rights, a treaty meant to maintain traditional practices and livelihoods, infringed upon by tar sands water use and tailings disposal.4 Furthermore, the Albertan Government has practically given the tar sands away, instituting a lax royalty structure to entice foreign investment, receiving little in return for resource extraction.5,6 Low government revenue and increased inflation has led to withering infrastructure, unable to handle the increased demands of intensive development, all while oil industry profits have soared.7 The Albertan province is set to capture 95 percent of the GDP value of the tar sands as well as 86 percent of the new employment opportunities.8 This has driven unsustainable economic growth in a regionally biased way, leading to negative effects on exports in other Canadian industrial sectors, also known as Dutch Disease.9,10 The emphasis Canada has placed on its bitumen resources has bound its dollar to the market price of oil (Figure 1), leaving the country and its assets vulnerable to oil’s price volatility.11 Additionally, the over-emphasis on such a carbon intensive industry has pushed Canada off course from meeting its 2020 Copenhagen Accord commitments (Figure 2).12

The U.S. Energy Information Administration (EIA) reports that January 2014 U.S. crude oil imports from Canada (106,540 thousand barrels) overtook all OPEC countries combined (102,741 thousand barrels). This is indicative of the trajectory U.S. oil imports have taken for the last 20 years (Figure 3).13 The U.S. Congressional Research Service estimates 46 percent of Canada’s crude oil production comes from the tar sands,14 a number projected to increase as conventional reserves decline and a greater portion of the tar sands is developed (Figure 4).15

It is imperative that we understand what is driving the consumption of such a socially subversive and environmentally catastrophic energy source. Canadian tar sands expansion has been facilitated by a liberalized trade framework. NAFTA has already established unfettered access to Canadian energy products by the United States, effectively ceding Canadian sovereignty of these resources in times of need by establishing binding trade obligations.16 Opening markets through the current negotiations of the Transatlantic Trade and Investment Partnership (TTIP), between the U.S. and the EU, and the Comprehensive Economic and Trade Agreement (CETA), between Canada and the EU, present a potential for greater oil industry profits from increased tar sands development. Pressure stemming from these negotiations have already led to reductions in EU carbon pollution standards17 and calls to dismantle laws written to ensure national control of natural resources in the U.S. and Canada.18,19

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