The Canadian tar sand deposit – the largest oil deposit in North America and the second-largest in the world – is worth $1.5 trillion or $34,591 for every man, woman and child in the country, according to the (quite credible) Canadian think tank, the Centre for the Study of Living Standards.

That’s one and a half trillion tons of trouble for environmental policymakers in Canada and the United States.

The Canadian tar sand deposit – the largest oil deposit in North America and the second-largest in the world – is worth $1.5 trillion or $34,591 for every man, woman and child in the country, according to the (quite credible) Canadian think tank, the Centre for the Study of Living Standards.

That’s one and a half trillion tons of trouble for environmental policymakers in Canada and the United States.

The CSLS report is basically a scold to Statistics Canada, which had been working on a total-value estimate less than one quarter this size. The CSLS conclusion implies a bonanza that much outstrips environmental considerations and other social costs.

But closer reading shows:

• the social cost of greenhouse gas emissions created in the mining and refining stage is nearly $70 billion.
• the CSLS ignored the social cost of downstream emissions (accounting for 70 to 80 per cent of GHG output.
• the CSLSmade no attempt to value environmental damage or social costs not directly related to climate change.

In fairness, the CSLS authors make a nod toward the environment and suggest: “This is an
area that demands further research.”

But the paper points to two kind or trouble.

First, there is a fundamental economists’ arrogance to the notion that you can attach an accurate dollar value to dirty commodity without having to account for even most of that commodity’s potentially devastating social costs.

Second, and more immediately important for policymakers, it shows how much money can be made mining the tar sands – fair warning of how excited oil companies, their employees and the (Canadian) politicians who are so deeply in their debt will be to continue exploiting this resource.

It also points to the problems that President-elect Barack Obama will have if he tries to curtail the purchase of tar-sands oil on the basis that it is a filthy alternative to “light crude” that flows so freely in places like Saudi Arabia and Venuzuela.

As the CSLS notes, the tar sands are “the largest contributor to Canadian emissions growth. Since the early 1990s, output growth in the oil sands sector has been so great that total emissions from this source have increased even as emissions per unit of output (intensity) have declined by as much as 45 per cent. These trends are expected to continue into the foreseeable future and the oil sands are projected to account for 41-47 per cent of ‘business-as-usual’ Canadian emissions growth between 2003 and 2010.”

If Canada and the United States are going to get serious about reducing GHG emissions, it seems obvious that they would start with the biggest and fastest growing point source on the continent. There are, unfortunately, 1.5 trillion reasons why that will be one of the hardest places to make progress.