1. OIL AND GAS:

New front to open in Keystone XL wars over challenges of extraction

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The political conflagration over the Keystone XL pipeline has touched on its jobs impact, its environmental footprint and its potential safety risks, but rarely on the unique challenges of tapping the Canadian oil sands crude it would carry -- until this week.

As gasoline prices climb, lawmakers are beginning to cast their gazes past XL's 700,000-plus barrels per day of Canadian fuel to the estimated 170 billion barrels of technologically extractable oil that lies beneath that nation's three major deposits of heavy bitumen. The House Energy and Commerce Committee's energy and power subpanel, site of Congress' most intense debates over the $7 billion XL line, tomorrow plans to take a longer view at Canadian efforts to cut the emissions generated by the fuel-chugging process of turning oil sands into usable crude.

That oil sands crude generates higher greenhouse gas emissions than its conventional cousins is an inconvenient truth for many proponents of Keystone XL and other Canadian energy infrastructure projects. But Energy and Commerce Republicans made it clear Friday that they intend to tell a success story of the "improved environmental performance at oil sands production facilities," according to a memo released in advance of the hearing.

"[G]overnment- and industry-led research is contributing towards lower emissions, water consumption, and energy intensity for many oil sands operations," panel aides wrote in the memo.

Those positive notes set for sounding by industry and government representatives -- including the chief of Alberta Innovates, a project launched by Canada's oil-rich province to explore high-technology carbon reduction strategies -- include rates of water recycling higher than 90 percent at in situ oil sands facilities where superheated water is used to pry bitumen from the ground (Greenwire, Aug. 16, 2011).

Another Canadian emissary of environmental progress in the oil sands region who will testify is William McCaffrey, president of Canadian fuel company MEG Energy and a board member of the In Situ Oil Sands Alliance, an industry partnership formed to harness "creativity and expertise to advance technology forward in the oil sands." In situ processes represent an estimated 80 percent of oil sands extraction and are estimated to eventually eclipse conventional strip mining, which can only be used for bitumen deposits closer to the surface of Canadian soil.

Yet two environmentalist witnesses, including an anti-oil sands campaigner from Greenpeace, are poised tomorrow to strongly challenge the industry's argument that Canada is making leaps and bounds toward cleaner oil sands extraction.

Simon Dyer of the Pembina Institute is likely to hew to his group's call for "responsible" oil sands production rather than a full halt to it, a stance rare among green groups north or south of the border -- but that modulated approach has amplified Pembina's past critiques of scientific monitoring efforts.

Pembina last month described itself as "cautiously optimistic" about an agreement by the Canadian and Albertan governments to bolster their tracking of the air, water and soil effects of oil sands mining and in situ processing. Yet the institute's depth of expertise about extraction technologies could prompt Democrats on the panel to seek affirmation from Pembina of how far the industry has yet to come before truly curbing the ecological effects of its operations.

While Republicans clamoring for President Obama to reverse his rejection of Keystone XL often point to the 100,000 barrels of daily crude it would carry from North Dakota's Bakken Shale play to the Gulf Coast, tomorrow's hearing also gives them an opening to talk up the security benefits of shifting oil imports from the unstable Middle East to more friendly Canada.

Rep. John Sullivan (R-Okla.) touched on this argument in his response to Obama's plans to visit Cushing, Okla., on Thursday. That oil-storage mecca would be the starting point for the southern leg of the XL pipeline, which Obama supports.

"I want to hear the president explain to Oklahomans why he rejected the Keystone XL pipeline and turned his back on using the oil and gas resources in our own backyard instead of spending $1 billion per day for OPEC oil," Sullivan said.

Also on hand at tomorrow's hearing will be Anton Dammer, a former director of the Energy Department's Office of Naval Petroleum and Oil Shale Reserves who now consults on issues of unconventional energy extraction.

Schedule: The hearing is tomorrow at 10 a.m. in 2123 Rayburn.

Witnesses: Anton Dammer, independent consultant; MEG Energy Corp. President William McCaffrey; Murray Smith, president of Murray Smith & Associates; Alberta Innovates CEO Eddy Isaacs; N-Solv Corp. President John Nenninger; Pembina Institute Policy Director Simon Dyer; and Greenpeace climate and energy campaigner Melina Laboucan-Massimo.