Oil Sands Semantics: I Say Potato, You Say Po-Tar Sands

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"The key descriptor falls into two categories: oil sands or tar sands. The former is the term more commonly used among industry types. To use the term 'tar sands' is to evoke the negative, to essentially tar and feather the debate."

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Based solely on the choice of a descriptor when talking about the retrieval of bitumen from the sands in the Athabasca basin in Alberta, it becomes obvious which side of the issue you take. Technically speaking the official term for this hydrocarbon source is "bituminous sands," but we rarely see this used in any main stream media article. Perhaps itís too cumbersome, or confusing, but it is the most accurate, as bitumen is indeed being extracted during the process.

Based solely on the choice of a descriptor when talking about the retrieval of bitumen from the sands in the Athabasca basin in Alberta, it becomes obvious which side of the issue you take. Technically speaking the official term for this hydrocarbon source is "bituminous sands," but we rarely see this used in any mainstream media article. Perhaps itís too cumbersome, or confusing, but it is the most accurate, as bitumen is indeed being extracted during the process. More commonly, the descriptor used falls into two categories: oil sands or tar sands.

The former is the term more commonly used among industry types, and those who arenít politically charging the debate. It too is accurate, as ultimately the goal is to pull oil, hydrocarbons, bitumen, energy from the ground, so to call it oil is to call it what it is.

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The latter is disingenuous and is used to taint the discussion right from the get go. Companies like Alberta Oil Sands (TSX:AOS), Athabasca Oil Sands Corp. (TSX:ATH) and Connacher Oil and Gas (TSX:CLL) are all involved in oil sands operations, and would completely send the wrong image if they were to rename themselves Alberta Tar Sands, Athabasca Tar Sands and Connacher Tar and Gas. And rightfully so, as theyíre not in the business of developing tar.

To call it tar sands is to evoke the image of tar pits like those found in California and elsewhere. These pools of asphalt are not being developed for hydrocarbon extraction, nor will they be, because they do not contain the same levels of oil found in the Athabasca. No, to use the term "tar sands" is to evoke the negative, to smear, to stickify, to dirty, to sully, to essentially tar and feather the debate.

Itís a common tactic used by the green movement, and on many occasions it is quite effective. For those outside of the sector, the nomenclature becomes confusing, and the images are meshed together as one. From a PR standpoint, the outcome is quite detrimental to the oil and gas sector.

But even more aggravating is when government uses the t-word. We would hope that our leaders would be educated enough to use terms properly, with the proper pronunciation. This is why after eight years of the Bush administration, hearing the word "nuke-u-lar" is akin to nails on a chalkboard.

Today, a Reuters report according to a draft agenda suggests that European Union (EU) officials on Feb. 23 are expected to vote on a draft law designed to label fuel produced from "tar sands" (thereís that term again) as "more polluting than that from other forms of oil." Now, weíre expected to believe that the EU is infallible, as its handling of the economy and its own energy supplies have proven quite to the contrary. But instead of taking into consideration the ethics involved, the label is dished out to put the spin on the energy source.

Now, of course, this is set to engage intense lobbying from Canada, where the argument has been made that the EU is unfairly discriminating against the country. The bill automatically labels most of the supply from the worldís third-largest oil reserves as "tar sands" in an effort to rank and label the most carbon-intensive options of supply.

Perhaps itís the climate in Europe thatís changing these minds. The sentiment has moved on from the "Not in my backyard" attitude when it comes to nuclear energy, post-Fukushima, and for natural gas fracking, after the documentary Gasland hit European theatres, to "Not in your backyard either" with this new labeling scheme.

I donít agree with Canadian journalist/superpest Ezra Levant a lot, if at all, but I do agree with his argument about the concept of "ethical oil." NATO countries are engaged in countless violent campaigns in areas of the world that provide "cleaner" oil supplies. But yet, we ignore the human costs involved with securing these supplies, and paste the image of human rights and peacekeeping over the actual motives that are sending our troops abroad.

Instead of embracing the fact that oil supplies from Canada are indeed safer when it comes to human sacrifice, or putting further research and development capital into cleaner oil sands technologies, we fight more difficult political battles in the Western world with ourselves. We argue over semantics, like oil sands versus tar sands. Itís ridiculous.

Complaints are heard about "big oil," yet the attacks very rarely are directed at OPEC. To be quite clear, Canada isnít a part of OPEC, nor will it ever be. Itís incredible that this is the way friendlier oil suppliers are treated.

Going forward, an anonymous source said to Reuters, "Itís very unlikely (the EU bill will) get a qualified majority, which means that this will go the Council." At least there are still some European nations who are opposed to this unfair labeling, especially from the Netherlands (home of Royal Dutch Shell), the United Kingdom (home of BP) and France (home of Total).

The drafted EU proposal would have "tar sands" oil assigned a default greenhouse gas value of 107 grams (g) of carbon per megajoule, thus informing buyers that it has more climate impact than conventional crude with 87.5g. If ratified, the ranking would attempt to reduce the carbon intensity of the EUís transport fuels by 6% by 2020 as part of wider goals to cut carbon emissions by 20% by 2020.

Perhaps a compromise could be made if lobbyists from Canada have any say in the matter. First, change the name from tar sands to oil sands, but keep greenhouse gas value for those who care about that sort of thing. Next, put an ethical value on the suppliesófor instance, informing buyers that zero soldiers had to die for each megajoule of oil sands, whereas 12 soldiers and 4 civilians had to die for each megajoule of oil from unstable countries. Something like that would be a little more honest, donít you think?

Joel Chury,
 VantageWire.com

G. Joel Chury is a veteran investment columnist for Resource World Magazine and the editor-in-chief of VantageWire.com. His knowledge of both the mining and oil and gas sectors along with his ability to sift through TSX.V data and press releases makes him one of the best up-and-coming newsletter writers on the Web.

With a diverse background that includes investor relations writing and consulting for publicly held companies and previous fieldwork as a surface land agent for oil and gas companies, Chury seamlessly translates technical results geared towards engineers and geologists into a more readable language thatís palatable for investors on the go. As well, Chury is an avowed silverbug, always willing to join the debate on where the precious metals market is heading.

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