This week in Ottawa, Prime Minister Stephen Harper will try to sell President Obama on a North American agreement on global warming and energy that shields the carbon-heavy tar sands industry from punitive measures. He's sure to lobby for an tar sands exemption to Section 526 of the US Energy Bill, which prohibits federal agencies from purchasing any transportation fuel whose lifecycle greenhouse gas emissions exceed those of conventional petroleum sources. His argument will sound something like this: Canada is one of the few remaining places on earth where oil reserves are not only abundant (Canada is second only to Saudi Arabia in oil reserves) but easily accessible to Western oil producers. America desperately hopes to reduce its dependence on foreign oil and is already the largest importer of Canadian oil. Why rock the boat; it's a match made in heaven.
 
Except that it isn't. While Canada is a much more attractive trading partner than OPEC, a pact with Canada that fails to penalize the heavier carbon contributions of tar sands relative to conventional oil is the equivalent of a public policy that encourages smoking filtered instead of unfiltered cigarettes because the latter are sold by rascals.
Building the tar sands' presence in the US energy landscape would place a huge impediment toward President Obama's ability to make progress on the climate front. Tar sands emit three times the amount of greenhouse gases than conventional oil does during the production process, and the end-product burns dirtier as well.[1] Tar sands operators have no fix for this the dilemma, except to point to carbon capture and sequestration technology, which is expensive, unproven, and many years away from widespread application if and when all the kinks are worked out. Not even industry executives are claiming it's a magic bullet for neutralizing their climate footprint.
 
Regional impacts are heavy as well because refining the dense, mucky tar sands is an enormously resource-intensive process.  It requires either landscape-obliterating surface mining or an energy-intensive steaming process that is currently drawing from the Athabasca River twice the amount of water used annually by the population of Calgary.[2] A total of twenty square miles of toxic tailing ponds dot the landscape – the same ponds that made headlines last spring when hundreds of migrating ducks swam into them and couldn't swim out, and similar to the coal plant holding ponds that flooded communities across Tennessee in the Tennessee Valley Authority catastrophe this winter. First Nations communities living downstream from tar sands operations have reported elevated cancer levels that are under investigation.
 
This bad rep has produced a growing backlash not just among environmentalists and indigenous groups, but with investors as well. Last June, shareholders at ConocoPhillips and Chevron voted on proposals calling for greater disclosure on the environmental and social impacts of the companies' expanding tar sands operations (filed, respectively, by the authors' firms, Trillium Asset Management Corporation and Green Century Capital Management). Because many institutional barriers exist that depress voter support of shareholder-initiated proposals, such environmentally-themed resolutions are lucky to attain double-digit support in their first year on the ballot – but these proposals received nearly 30%. Shareholders, whose motives seldom include tree-hugging or altruism, are starting to see the word "risk" written all over the tar sands – not just the risk of litigation or reputational harm, which oil company shareholders develop a high tolerance for – but the very real risk that consumers will reject products with such a high carbon output once the U.S. implements carbon constraints.
 
Another risk clear to investors: oil price volatility. Because the process is so expensive, tar sands do not become economical to develop unless oil prices are $80 per barrel.[3] As a result of the collapse in oil prices, companies have shelved $230 billion in planned capital spending on the tar sands.[4] The Globe and Mail recently recommended that we seize this moment to reassess the industry's full-speed-ahead approach during boom times.
The risks involved with exemption of the tar sands from Section 526 are substantial.
President Obama is eagerly setting the US up for long-awaited climate leadership on the global stage, with plans to introduce a national low-carbon fuel standard and other carbon-regulating legislation. An exception made in US policy for the tar sands' particularly dirty oil will undermine his important efforts to promote clean, renewable energy. 
 

[1] Ethical Funds. – needs citation.
[2] Pembina – needs cit.
[3] Merrill Lynch – needs cit.
[4] "In the past six months, dozens of companies have halted, suspended or outright cancelled $230-billion in planned capital spending, according to the Canadian Energy Research Institute, which calculated that
Alberta could now produce half as much oil by 2015 as expected a year ago, at the height of the boom." - NATHAN VANDERKLIPPE Globe and Mail Update, February 12, 2009