One in, one out, of boycott of Canada’s oil sands

Fortune 500 companies hesitate about tightening screws on “dirty” fuel

BY GARY PARK FOR GREENING OF OIL

An environmental group jumped the gun in bragging it had signed up both a trendy organic grocery chain and an upscale home furnishings retailer to target the carbon footprint of Alberta’s oil sands.

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Whole Foods Market and Bed Bath & Beyond were presented on Feb. 10 by ForestEthics as the first U.S. corporations to reduce their consumption of products derived from bitumen deposits by ensuring their own trucks burned only fuel from conventional sources, such as gasoline and diesel from traditional, less viscous, oil deposits.

It was immediately seen as more than mere symbolism, given that Whole Foods has 54,000 employees in 290 stores on both sides of the U.S.-Canada border, although none in Alberta, home to Canada’s largest known bitumen deposits. BB&B runs 930 stores and posted a $3 billion profit last year. Both are on the Fortune 500 list of companies. 

ForestEthics elation short-lived

But the sense of elation in ForestEthics was short-lived. Within 24 hours, it issued a release, saying it had “incorrectly communicated a desire to limit or avoid fuels from the Canadian tar sands.”

However, Whole Foods showed no signs of backing down. “Fuel that comes from the tar sands refineries does not fit our values,” it declared.

“We lead on issues … that’s what we do and it’s what’s expected of us,” said company vice-president Michael Besancon.

Whole Foods estimates its switch to conventional fuels will affect about 10 percent of its trucking mileage, but insists it has to start somewhere. Initially, BB&B vowed to give preferential treatment to fuel suppliers who avoided the use of “alternative energy with higher greenhouse gas discharges.”

“Our current and particular concern ... is fuels produced by refineries taking feedstocks from the Canadian tar sands,” BB&B said.

But it said “characterizations that we have ‘rejected’ any particular fuels are not accurate as we are not in a position to do so.

“We have encouraged our third-party transportation providers to be aware of the issues associated with fuels generally and in the context of our attempts to decrease our own greenhouse gas impacts, we have asked them to lessen their use of fuels which they know would be counter to this goal, where feasible.”

Looking to embarrass oil sands producers

ForestEthics, which hopes to sign up at least 30 Fortune 500 companies for the campaign, boasted that the two retailers would be just the first to join a campaign to embarrass oil sands producers.

“The goal here is to demonstrate to Alberta and to the oil patch that this problem isn’t going away,” said executive director Todd Paglia. “In fact, it’s going to get a lot worse.”

Spreading the gospel message gathered pace in Ontario on Feb. 10 when 1,200 store managers of global giant Wal-Mart got a sermon from British Columbia environmentalists David Suzuki.

Canada’s Environmental Minister Jim Prentice admits he is growing apprehensive about the head-in-the-sand attitude of the oil sands industry.

He said it’s time for the industry to step up its communications campaign and dispel misconceptions surrounding oil sands operations.

“The oil sands, at the end of the day, are an essential part of the overall supply-demand balance in North America,” he said. “But they do have to be developed in an environmentally responsible way. Industry in particular is going to have to tell its story and explain the real facts.”

Emissions from oil sands operations down 30 percent

Those “facts” include the fact that Canada’s hydrocarbon future is inextricably tied to the oil sands, which could double its volumes to about 2 million barrels per day, or more, by 2015, of which more than 60 percent is destined for U.S. markets; that emissions from each barrel of crude extracted from the oil sands are 30 percent lower than they were 20 years ago; and that Canada’s share of global greenhouse gas emissions is just 1.8 percent.

But the Canadian Association of Petroleum Producers, or CAPP, has failed to deliver on its frequent promises to counter misinformation being spread by critics of the oil sands.

However, CAPP vice-president Greg Stringham said the “onus is on the industry to make sure the environmental performance of the oil sands is improving. What we are trying to do … is get people to decide whether that performance is meeting the environmental regulations that are in place and to show that technology is really making a difference.”

Producers say ForestEthics campaign a publicity stunt

The industry’s initial response is to suggest the move is little more than a publicity stunt and to argue that it is virtually impossible for consumers to know the crude source of the diesel that fuels their trucks because refiners deliver mixed feedstock batches and swap product with competitors for efficiency reasons.

The challenge tripped up British-based Virgin Airlines when it considered the possibility of refusing to use oil sands-derived jet fuel, only to find it was impossible to trace the source of that fuel.

Impossible to trace source of majority of fuel

Alan Knight, a British-based sustainable development consultant, said the efforts would be achieve more by pressuring the industry to improve its environmental performance and increase spending on new clean energy technology.

Companies that were determined to be lagging behind could then be targeted, he said.

Boycotting only buries rather than solves problems and probably makes them worse, Knight said.

Besancon disagreed with Knight’s view said Whole Foods has been assured by its suppliers that they can trace their fuel sources to Alberta bitumen.

He said Whole Foods has already switched its Indiana distribution center from Marathon Oil to CountryMark, a farmer-owned co-operative that produces its own conventional crude which is processed in a small refinery.

But Besancon conceded that the company’s British Columbia and Ontario fuel outlets likely include synthetic crude.

Marathon spokesman Paul Weeditz said the oil sands are “extremely important” to North American’s energy security and will play a vital role in future energy needs.

“We also recognize that as part of our commitment to responsible operations we are going to continually look for ways to reduce the carbon footprint … and find more efficient ways to utilize these resources.”

Links of interest

ForestEthics Web site

Financial Times: Suppliers of oil sands fuel shunned

The Globe and Mail: Bed, Bath & Beyond backs away from boycott

Contact Gary Park via publisher@petroleumnews.com