With the decision by Canada to pull out of the Kyoto protocol, it's clear that the Canadian government cares more about protecting the polluters (particularly the tar sands industry) than the people. But our new report shows that the people hold the key to stopping the growth of tar sands oil production - and investors would be wise to take note.
The tar sands industry's plans are based on growth; it's planning for an incredible 140 per cent rise in production by 2025. But these plans depend entirely upon the industry's ability to build major pipelines that can take the oil to the coast, from where it can be exported to international markets.
This morning, we released a report warning investors that the increasing public opposition to tar sands is now posing a serious threat to the industry - and to investors.
The planned pipeline projects that would allow access to new markets are facing unprecedented delay and possible failure - largely due to growing public opposition from a diverse coalition of indigenous peoples, landowners, farmers, national security advocates and environmentalists in Canada, as well as by people in the UK and around the world.
Recently, consideration of the Keystone XL and Northern Gateway pipelines have been postponed by the US and Canadian governments - and these delays are a harbinger of ongoing controversy for every possible pipeline route.
The popular rejection of this extraordinarily polluting and expensive source of oil is just one of the risks faced by producers. There are many others - from constraints on greenhouse gas emissions and water use to the growth of competing oil supplies from Latin America and elsewhere. Legislation in Europe may discourage increasing tar sands oil processing for Gulf Coast refiners, and the building of new oil upgrading capacity - needed to process the oil - has all but ground to a halt in Canada since the start of the recession in 2008.
If Canada's decision to pull out of Kyoto was driven by the desire to protect the oil sands industry, it's likely to backfire. With governments globally aligning themselves ever closer to the polluters and against the people, the sense of public outrage at tar sands continues to grow. If investors want to make better choices about the energy stocks they hold, their choices should better reflect the social and environmental issues inherent in the energy sector.
The report, Getting to Market: Emerging Investor Risks in the Tar Sands, was produced by Oil Change International, Greenpeace UK and Platform.
