President Obama made some very interesting comments yesterday supporting the exploitation of Canadian “oil sands” as well as U.S. coal reserves. These comments are sure to make many people a bit uncomfortable, including some of his own appointees on energy and climate. What I find particularly interesting is Obama’s full recognition that restraining GDP growth is simply not an option. It will be interesting to see how this argument develops as Congress considers cap-and-trade, which in its purest form necessarily results in a drag on GDP, leading to such fancy things like “safety valves” and other work arounds. And cap and trade without a cap is just a fancy derivatives market. If Obama recognizes that in a trade off between GDP and emissions which one will win, every time, how long will it be before every one else does as well?

Here is an excerpt from the ClimateWire story, with a passage highlighted:

President Obama said “clean energy mechanisms,” like carbon capture and storage, would allow the United States to continue consuming Canadian sand oil, an emission-heavy fuel that often requires strip-mining vast stretches of boreal forest in the province of Alberta.

The assertion yesterday came two days before Obama is scheduled to meet with Canadian Prime Minister Stephen Harper in Ottawa, and it promises to raise questions among environmental groups, which see the oil sands as a key contributor to climate change.

Canada’s accelerated development of the oil sands, a remote reserve of tar-like bitumen that offers more fossil fuel capacity than Saudi Arabia, is a flashpoint for Obama on his first international trip as president.

The president is weighing the benefits of having a neighborly source of oil against the negative result of its carbon emissions, which can be up to three times the emissions of conventional oil. It’s a calculation that comes as Obama tries to end the United States’ reliance on oil from the Middle East and Venezuela in 10 years.

As a backdrop, environmental groups are pressuring him to apply strict emission standards to the oil sands and their connected refineries. Some believe Harper is seeking special treatment for that sector, because of the benefits it provides to Canada’s economy and U.S. energy security.
Obama won’t say ‘dirty oil’

Obama declined to call the oil sands “dirty oil” in a White House interview yesterday with Peter Mansbridge of the Canadian Broadcasting Corp., but acknowledged that the process “creates a big carbon footprint.”

“So the dilemma that Canada faces, the United States faces, and China and the entire world faces is: How do we obtain the energy that we need to grow our economies in a way that is not rapidly accelerating climate change?” he said.

“I think, to the extent that Canada and the United States can collaborate on ways that we can sequester carbon, capture greenhouse gases before they’re emitted into the atmosphere, that’s going to be good for everybody,” Obama added. “Because if we don’t, then we’re going to have a ceiling at some point in terms of our ability to expand our economies and maintain the standard of living that’s so important, particularly when you’ve got countries like China and India that are obviously interested in catching up.”

He believes the worst climatic effects from the oil sands can be “solved by technology.” Canada’s emissions have risen 25 percent since 1990, more than half of which is attributed to its fossil fuel industries.

“I think that it is possible for us to create a set of clean energy mechanisms that allow us to use things not just like oil sands, but also coal,” Obama added.