Clouds on the horizon for tar sands?

Canada before and after tar sands extraction. Producing tar sands oil is also at least three time more carbon intensive than making normal crude. © Jiri Rezac / WWF-UK

Some dirty oil news bubbled up over the weekend, as big oil companies including Shell and BP mobilise to try and stop tar sands oil being banned from the sixth largest economy in the world.

That would be California, personal fiefdom of 'surprisingly green governor' Arnie Schwarznegger. In an effort to cut vehicle emissions 10 per cent by 2020, he has brought in laws that require a cut in the carbon content of fuels sold in the state. "Our cars have been running on dirty fuel for too long," intoned Arnie, in his rich Austrian accent.

Not only did the legislation require cleaner fuel, it also required carbon costs for fuels to be calculated over the full life-cycle of fuel production. This means counting the carbon emissions from the beginning of production right through to the end use.

This accounting method - because it's more accurate - hits tar sands particularly hard. Tar sands oil has extra carbon costs associated with getting the difficult-to-process bitumen out of the ground (one popular method for extraction involves pumping not-entirely-carbon-free natural gas into the ground to squeeze the bitumen out), and then refining the thick, molasses-like bitumen down to the equivalent of crude oil produces more emissions still.

Producing a barrel of oil from tar sands creates at least three times more carbon emissions than getting a barrel from conventional sources.

Because tar sands oil is so dirty, the Californian legislation would basically block it from the Golden State. That would be bad news for companies like BP, who are dipping their investment toes into the chemical-soused waters of tar sands, and Shell, who have about a third of their oil reserves - future production capacity - in tar sands.

So entirely predictably, the National Petrochemical & Refiners Association - which includes Shell and BP - is now trying to get the legislation scrapped, arguing that it's 'unconstitutional'. Why unconstitutional? Because apparently not being able to burn tar sands oil threatens the US 'energy security'.

The chair of the California Air Resources Board, Mary Nichols, is pretty unimpressed:

"Their actions are shameful. This [legislation] is a critical tool to help us break our dependence on fossil fuels. It will protect us from volatile oil prices and provide consumers with cleaner fuels and provide the nation with greater energy security.

"Our analysis shows that producing alternative fuels under this standard can save consumers as much as $11 billion over the next decade, and that's in California alone. Instead of fighting us in court, they should be working with us to provide consumers in California and the rest of the nation with the next generation of cleaner fuels."

Opting for tar sands, the dirtiest form of oil production, is reinforcing the link between energy production and fossil fuels - and then some. Maybe that's why BP is under fire from its own investors over the issue - with organizations like the Co-op and UNISON, who are invested in the company through their pension funds, asking pointed questions about how their money is being spent.

We know that decarbonising our economy would create jobs, fuel investment, and deliver actual energy security by reducing our dependence on fossil fuels. But if a clean energy future is a step forward, it's pretty clear that tar sands is a step back - and one that the biggest oil companies seem hell-bent on pursuing.