[ASSURAS] Looking to Canada's oil sands to solve America's energy problems.

[FRED UPTON] Here's an area that we can use North American assets, North American oil, to offset what comes from overseas.

[ASSURAS] But is the environmental cost of a proposed pipeline through America's heartland to get that oil too high?

[RANDY THOMPSON] The land is important to people that live here. And the oil companies, they could care less about the land.

[ASSURAS] Plus, we go to the heart of Canada's oil sands region where those companies say they're caring for the environment while extracting its riches.

[DON THOMPSON] We don't destroy the land, we borrow it, and then we turn it back to nature, just as this area around here proves.

[ASSURAS] But some residents claim they're paying a price with their health.

[MIKE MERCREDI] There's been no cancers in my family, and then my uncle was diagnosed with cancer, and nobody knew where it came from.

[ASSURAS] And an exclusive interview with Energy Secretary Steven Chu on the future of the pipeline. Will it be built?

[CHU] It's one of those things that, it's not perfect, but it's a tradeoff.

[ASSURAS] This is "energyNOW!"

Hello, everyone. I'm Thalia Assuras. Welcome to "energyNOW!", a weekly look at America's energy challenges and what we're doing about them. More and more, the U.S. is looking north to Canada to meet the challenges of importing foreign oil. We already import more oil from Canada than from any other country, and the Canadian province of Alberta holds the world's third largest oil reserves -- 170 billion barrels, an amount that theoretically could meet all U.S. oil demand for almost a quarter century.

The thing is, it's an unusually thick kind of oil, called oil sands crude by the industry, labeled tar sands oil by others. And the plan is to build a pipeline to get it to Texas refineries on the Gulf Coast. That pipeline project has ignited one of the biggest environmental battles of the year.

[Demonstrators in Lincoln, Nebraska, chanting "No pipeline!"]

[ASSURAS] From the streets of Nebraska...

[Demonstrators in Washington, D.C., chanting "Hey-ho, tar sands no!"]

[ASSURAS] ...to the president's doorstep this summer, passions have been ignited over TransCanada's proposed Keystone XL pipeline. At the White House, more than a thousand arrests, including Hollywood celebrities.

[DARYL HANNAH, ACTRESS/ACTIVIST] It's not if there will be a spill, it's when there will be a spill. They are inevitable with pipelines.

[ASSURAS] It's a battle that's also been playing out over the airwaves, the oil industry declaring the Canadian oil is critical for America.

[MAN IN ExxonMobil AD] That's good for our country's energy security and our economy.

[ASSURAS] Opponents -- again, with Hollywood heavyweights weighing in...

[MARK RUFFALO, TarSandsAction.org] All that new oil will worsen global warming.

[ASSURAS] ...warning of an environmental disaster just waiting to happen.

[ANNOUNCER, DirtyOilSands.org AD] It would pump millions of gallons of the dirtiest oil in the world 2,000 miles across America's heartland.

[TEXT ON SCREEN] To see interviews with U.S. lawmakers about the pipeline go to energyNOW.com.

[ASSURAS] Members of Congress have also been duking it out over the pipeline.

[CONGRESSMAN] Yes, it's the dirtiest oil in the world.

[CONGRESSMAN] This is real energy security.

[REP. FRED UPTON (R-MI) CHAIRMAN, ENERGY & COMMERCE COMMITTEE] It's either going to come here, or it's going to go to China or someplace else. Why not rely on our friend, the Canadians, create the jobs here, and offset some of the oil that otherwise would come from someplace that's not nearly so friendly?

[REP. STEVE COHEN, (D) TENNESSEE] You need to have jobs, but they need to be safe, clean jobs that are good for the future of the Earth and good for the people that would be employed as well.

[ASSURAS] The heated debate over the Keystone XL pipeline is about to come to a head. The Obama administration is expected to decide by the end of the year whether the pipeline can proceed, a decision to be made by the White House because there's an international border involved.

The U.S. already gets more than a million barrels a day of oil sands crude from Canada, and if pipeline company TransCanada gets the go ahead for Keystone XL, it could bring another 830,000 barrels a day across the border. TransCanada already operates Keystone 1, from Alberta to refineries in the American Midwest. The XL would supplement that line, adding 1,700 miles of pipe from Alberta through six states -- Montana, South Dakota, Nebraska, Kansas, Oklahoma, and ending at refineries on the Texas Gulf Coast.

In today's show, we're going to explore all sides of the oil sands controversy. We'll take you to the oil sands region of Canada a little later, but we begin here at home, in Nebraska, where the controversy over the $7 billion proposed pipeline is broiling, as you'll see in this "energyNOW!" Spotlight.

[RANDY THOMPSON] Kind of represents what my parents spent a lifetime to get put together.

[ASSURAS] When farmer Randy Thompson looks out over his family's land, he worries about what the future might hold.

[RANDY THOMPSON, MERRICK COUNTY LANDOWNER] The pipeline would come across just west of those trees down there and it would cut right through the middle of this patch.

[ASSURAS] So it's going to go through the crops, and through your pasture.

The pipeline would carry extra-thick crude oil infused with toxic chemicals like benzene, and a potential rupture is what concerns Thompson the most.

[RANDY THOMPSON] You have a spill or a leak of some kind, it's going right into our water supply.

[ASSURAS] And the water supply is for drinking?

[RANDY THOMPSON] Drinking, irrigating our crops and watering our livestock. You know, it's everything to an operation like this.

[ASSURAS] And Thompson says it's not just his farm that could be at risk. Such a spill could contaminate the underground Ogallala Aquifer that runs from South Dakota to Texas. It provides 2 million people with drinking water and 30% of the agricultural fresh water in the entire country.

And then there are Nebraska's environmentally sensitive sand hills, 60 miles north, where Thompson used to ranch. Even without leaks, he says, just locating the pipeline there would cause significant damage.

[RANDY THOMPSON] That may be an unfixable problem, because the wind erosion blowing the sand up there, it's going to be very difficult to get that all revegetated. 'Cause it's taken thousands of years to get that grass to grow on that sand.

[ASSURAS] So, at 63 years old...

[RANDY THOMPSON] It can be done, with some willpower.

[ASSURAS] Randy Thompson has become an unlikely activist, headlining grassroots protests against the Keystone XL pipeline.

[TEXT ON SCREEN] To see more from the Keystone XL protests, go to energyNOW.com.

[Demonstrators chanting "No pipeline!"]

[RUSS GIRLING, CEO, TRANSCANADA CORPORATION] We're not going to contaminate the drinking water.

[ASSURAS] More than a thousand miles north, in Calgary, Alberta, the heart of Canada's oil business, TransCanada President Russ Girling says the pipeline doesn't threaten Thompson's land.

[GIRLING] The facts are, you know, pipelines are the most safest mode of moving crude oil and crude oil products around North America. The incidence rate is very small, relative to moving it in other forms, whether that be by barge or by rail, by truck, or the other sort of major forms. And by orders of magnitude, pipelines are safer.

[ASSURAS] Still, TransCanada is feeling the fallout of other companies' oil spills. This July, an ExxonMobil spill tainted Montana's Yellowstone River, and crude is still being cleaned up more than a year after an Enbridge spill in Michigan's Kalamazoo River. And in little over a year in operation, TransCanada's existing Keystone 1 had over a dozen leaks.

How do you explain Keystone 1?

[GIRLING] Have to be clear, is that we've had zero breaks in the pipeline itself below the ground. When it comes above the ground, we've had some seals and some valves break. We've had one spill that was somewhere around 500 barrels. The balance have been 10 barrels or less.

[ASSURAS] From pipeline leak sensors that trigger automatic shutdowns to restoring vegetation along pipeline routes, Girling says TransCanada has bent over backwards to be environmentally responsible.

[GIRLING] This is a picture of the pipelines that cross the aquifer today. Thousands and thousands of miles. We're adding another 243 miles across the aquifer.

[ASSURAS] Just to get away from all of that controversy, why don't you just go all the way around?

[GIRLING] It's longer, which means more ripping up the ground, more environmental impact, more landowners that you're going to impact.

[ASSURAS] For all the concerns about the environmental impact, the pipeline's economic impact could be enormous. TransCanada claims the project will create nearly 140,000 jobs.

[RON KAMINSKI] It's going to be a huge deal.

[ASSURAS] Back in Nebraska, labor union leader Ron Kaminski says Keystone 1 proved how valuable such a project can be.

[RON KAMINSKI, LABORERS' LOCAL #1140] Think about all of the people that come into that town to live, to rent a hotel, to go eat at the local restaurant, to drink at the local bar. Buy groceries from the local grocery store. Those are all off-shoot jobs that really aren't accounted for. With construction of the first Keystone line, it was a big economic boom for those towns.

[ASSURAS] TransCanada says the vast majority of landowners along the proposed Nebraska route have signed agreements allowing the pipeline on their property.

[RON JOHNSON] It's not a very long distance on my land.

[ASSURAS] Ron Johnson is one of them and says the issue is really about American sacrifices to get oil from the Middle East.

[JOHNSON] I bought this place and hope to give it to my kids. This is my dream. And I don't want anything to spoil it. But, at the same time... I don't want kids giving up their lives for oil because I have a dream.

[ASSURAS] Johnson has already agreed to lease his land rights to TransCanada.

But neighbor Randy Thompson is holding out, and hopping mad, saying that TransCanada has essentially resorted to bullying tactics. "We will initiate eminent domain only as a last resort, where good faith efforts have not resulted in a voluntary agreement."

[RANDY THOMPSON] Well, in other words, if I don't accept their offer, then... They call that "negotiations," see? They make the offer. They say, "Here's how much we're going to pay you. You either take it, or we're going to take you to court." And a lot of landowners have signed off because they're intimidated by a huge corporation. I mean, it's like facing off with a giant.

[ASSURAS] A giant that is confident it will win.

You've already waited 30-plus months for approval from the United States. Is there a point where you're just going to say, "Listen, forget Keystone XL"?

[GIRLING] Life is hard sometimes. I think most Americans are supportive of what's logical. They want us to do it well, and we will.

[ASSURAS] It's going to happen, yes or no?

[GIRLING] Absolutely.

[ASSURAS] The White House decision on the pipeline is expected by the end of the year, but the final showdown might come down to Nebraska farm country and Randy Thompson.

Are you willing to face off with this giant in court? Would you do it?

[RANDY THOMPSON] Damn right, I will. That's what our courts are for.

[ASSURAS] Randy Thompson showed me TransCanada's offer of about $17,900, a one-time payment for building the pipeline through his land. Now, he calculates that comes to a dollar a day for him over the line's expected 50-year life span. As he said, not a very good commission.

Coming up, Energy Secretary Steven Chu's take on the pipeline in an exclusive interview, but first... we go north to Canada's oil sands, where oil developers say they are working hard to be friends of the Earth. But critics say, just look at the wildlife to see the oil sands' devastating effects. More on the Canadian oil sands controversy when we come back.

[TEXT ON SCREEN] In the United States, oil-sands resources are mostly concentrated in Eastern Utah, with an estimated 12 to 19 billion barrels in place. Source: Department of Interior.

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[ASSURAS] Welcome back, as we continue our look at Canada's oil sands and the proposed Keystone XL pipeline through America's heartland to bring that oil to Texas. The controversy over oil sands crude goes beyond the building of a new pipeline. As we mentioned at the beginning of the show, critics call the region the "tar sands." Now, that label emphasizes their view that extracting the oil harms people and the environment. But not everyone agrees. So, we sent "energyNOW!"'s Michael Davie far north, right to the source, to get the full story.

[DON GORMAN] Straight, straight, straight.

[DAVIE] Meet Don Gorman, he's a shovel maintenance planner for Syncrude, one of the largest oil sands mining operations in the world.

[GORMAN, OIL SANDS WORKER] I've been working out at the mine sites for the better part of 15 years now myself. Living at Fort McMurray now since 1980.

[DAVIE] In the last decade, the population of his town, Fort McMurray, Alberta, has increased 80%. And about 95% of residents have found employment.

[GORMAN] If it wasn't for me being able to secure employment in the oil sands, I don't think that we'd be as successful as we are today. I mean... it pays good money. It's a great job. It's rewarding.

[MARK HUOT, PEMBINA INSTITUTE] Compared to conventional oil that most people think of, oil sands processing is very different. It's far more energy intensive, much more intensive on the environment and far more complicating.

[DAVIE] Complicating because the oil here is bitumen, a tarlike substance that can be hockey-puck hard, and it's mixed up with sand, water and clay. To get to it, companies have to clear large areas of the boreal forest and then drill it out, or dig it out with open pit mining, a process environmentalists like Mark Huot of the Pembina Institute say is too destructive.

[HUOT] Surface disturbance of oil sands mining is -- it can't even be compared to conventional oil. It's a large open pit mine. The entire surface has been removed in order to extract this resource.

[DAVIE] To release the oil from the sands, it has to be superheated and chemically treated.

[HUOT] Much more difficult to get oil out of it, much more greenhouse gas emissions and a whole bunch of other impacts.

[DAVIE] The U.S. National Energy Technology Laboratory estimates that gasoline produced from Canadian oil sands puts 17% more carbon dioxide into the air than average gasoline.

So this was actually a mine right here?

[DON THOMPSON] Yes, you're standing on an old oil sands mining area.

[DAVIE] Don Thompson is the president of the Oil Sands Developers Group. He says oil sands emissions are overstated by the industry's critics.

[DON THOMPSON] We have reduced our emissions per barrel by 29% since 1990. Technology is what we have used to do that and technology is how we will continue to improve in the future.

[DAVIE] And by law, all companies must reclaim lands disturbed by oil sands operations.

[DON THOMPSON] I don't know any source of energy that does not have an environmental footprint, and oil sands clearly does. We don't destroy the land, we borrow it, and then we turn it back to nature just as this area around here proves.

[DAVIE] Since operations began in the 1960s, the industry has reforested about 10% of its footprint.

[FIRST NATIONS MEMBERS, FORT CHIPEWYAN, ALBERTA, CHANTING]

[DAVIE] Still, some in Alberta say the industry's already gone too far.

[MIKE MERCREDI] Growing up here was... was beautiful.

[DAVIE] Fort Chipewyan is located on the Athabasca River, 175 miles downstream of the mining area. Mike Mercredi is a member of the First Nations community there and used to work in oil sands.

[MERCREDI] I drove the heavy haulers there. And I was actually good at my job.

[DAVIE] But six years ago, Mercredi says he began to see the industry in a different light.

[MERCREDI] There's been no cancers in my family and then my uncle was diagnosed with cancer and nobody knew where it came from. And then he ended up passing away. And then a couple years later, my auntie was diagnosed with cancer and she passed away.

[DAVIE] What do you think caused the cancer?

[MERCREDI] I believe it's the tar sands development.

[DAVIE] But for Mercredi, the concern is not just about cancer.

[MERCREDI] Unhitch this?

[DAVIE] Fishing was once the mainstay of Fort Chipewyan's economy. But Mercredi says the huge volume of water used by the oil sands mining operations has impacted the fishing industry.

[MERCREDI] Then you can see the evidence on the ground. There are all those rocks exposed, and the grass, and even on the sides with the shade where it's all bright colored -- that's where it was all underwater before.

[DAVIE] So the local fishermen have to go way further out into the lake to fish?

[MERCREDI] Yeah. Further out where it's deeper.

[DAVIE] And for Mercredi, it's not just the quantity of the water, it's the quality.

[MERCREDI] The pollution in the oil sands mine that comes out of the stacks around the oil sands where it's being developed goes into the air and then comes back down onto the snow. And then, when the snow melts in the springtime in the runoff, it gets into the rivers, into the streams.

[DAVIE] Mercredi believes the pollutants then contaminate local food sources.

[MERCREDI] Right now, no one's really sure, but everyone and our elders believe that it's from the tar sands.

[DAVID SCHINDLER, KILLAM MEMORIAL CHAIR] This white fish, as you can see, has a pretty severe spinal deformity.

[DAVIE] David Schindler has been studying the impact of oil sands production in the Athabasca River.

[SCHINDLER] This one has a big tumor on its back.

[DAVIE] What about this big guy over here?

[SCHINDLER] This big white fish has some mouth and eye deformities, and these, again, are quite common.

[DAVIE] Last year, Schindler and a team of scientists released a study connecting oil sands mining to river pollution. In the water, Schindler found toxic metals like mercury and polycyclic aromatic compounds. Some of these compounds have been linked to cancer.

[SCHINDLER] What we showed was that the industrial development in that area has increased those very dramatically. In some cases, it looks like 10- to 50-fold more, depending on the chemical. The concentrations we found are very small, but they are a big increase from the almost undetectable levels that were there to begin with.

[DAVIE] A study by the Royal Society of Canada found no evidence of oil sands contaminants causing elevated human cancer rates. When Schindler's team released their findings, the Alberta government set up an expert panel to review the study. The panel said, "We generally agree with the conclusion," but they also said, the health and environmental impacts of the oil sands development are still unclear and called for further study.

[MERCREDI] I wish it would stay the way it was, because it's a pretty good life. Once it changes, I mean, it's changed forever. It won't go back.

[GORMAN] I think the oil sands are better for Canada. Um... I mean, it creates new jobs, creates new opportunities, and as time goes by, you develop new technologies to make the oil sands a better commodity. I mean, I know it's not the best solution, but it's the solution that we have right now.

[DAVIE] Oil sands production in Canada has tripled since 1995, and according to government estimates, the country may double its current output of heavy crude by the end of the decade. In Fort McMurray, Alberta, Michael Davie, "energyNOW!"

[ASSURAS] The Canadian Association of Petroleum Producers says it supports more health studies in the oil sands region as long as they are "led by the responsible health authorities and grounded in good health science." And the oil sands industry says the production process is getting cleaner. In fact, the plant outside Fort McMurray that converts oil sands into crude oil is spending $1.6 billion on new equipment to cut air pollution by more than half. The plant owner, Syncrude Canada, says the project should be finished next year.

The oil sands -- or tar sands, depending on your viewpoint -- weren't always controversial and it's held a great deal of promise for quite a while, as you'll see in this energyTHEN from 1942.

[Film projector running]

[ANNOUNCER] The Dominion of Canada is developing vast new oil reserves from oil-bearing sands in Alberta. So rich are these sands in the precious fuel that billions of barrels are expected to be taken out during the forthcoming months to meet the ever-growing demand for oil and gasoline. There's enough sand and oil here to last a hundred years.

[ASSURAS] Of the 3 million barrels of oil a day that Canada produced last year, more than half came from oil sands. That's according to the country's Environment Ministry. And, by the way, the U.S. buys 99% of Canada's oil exports.

Let's check the numbers in the energyNOW! Reality Meter. Last year, the U.S. imported more than 9 million barrels of crude oil a day, almost 2 million of that came from Canada, 22% of total U.S. oil imports, making our neighbor to the north our biggest foreign supplier of crude. But other countries have a growing interest in Canadian oil. Asian oil companies, including some from China, are investing in the oil sands region. Plus, Canada is considering another pipeline called the Northern Gateway, to ship oil sands crude to the Pacific coast for sale in the Asian export markets.

Coming up, Energy Secretary Steven Chu on the future of the proposed Keystone XL pipeline. Will the Obama administration approve it?

[CHU] It's certainly true that having Canada as a supplier for our oil is much more comforting than to have other countries supply our oil.

[ASSURAS] Our exclusive interview on the controversial pipeline that will go straight through the middle of America, next.

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[BILL McKIBBEN, FOUNDER, 350.org] This pipeline question, this Keystone question, will be the clearest test we've had of Obama's commitment to fighting global warming.

[ASSURAS] That was environmental activist Bill McKibben, one of the organizers of this summer's oil sands protest outside the White House. The protesters say the Keystone XL pipeline project is too dirty to proceed. But the U.S. State Department, which is running the review process, recently said Keystone XL would have no significant environmental impact. Other federal agencies are now weighing in, including the Department of Energy.

Secretary of Energy Steven Chu recently gave "energyNOW!" a wide-ranging interview in which we talked about the pipeline. I asked him if oil sands crude is critical to the nation's energy picture.

[CHU] It's certainly true that having Canada as a supplier for our oil is much more comforting than to have other countries supply our oil. And so I know there's been concerns about this, but, you know, both the technologies that are used to extract tar sands oil, which are improving dramatically, and so I think that could go forward. But I think, in the end, what we need to do is diversify our supply of oil. Right now, our transportation needs come almost exclusively from oil. And so we have a multiple-part strategy. The president said electric vehicles is a big part of this. Energy efficiency. Driving, you know, by 2025, 54 miles to a gallon, instead of, before the administration took office, 25 miles to the gallon. That's going to save Americans $1.7 trillion in gasoline prices. And it will make our cars that we make in the United States competitive worldwide, in a world market where we see oil prices and gasoline prices increasing.

Another part of it is biofuels. There's tremendous research in biofuels, next-generation biofuels. So we can get drop-in substitutes for diesel fuel, for gasoline, and for jet fuel.

Efficiency, biofuels, batteries. Those are the things that we need to diversify our supply of oil. Those are the things that will add to our prosperity.

[ASSURAS] Right, and the president has actually said that by 2025, he wants to cut the nation's oil imports by a third, but has said that the United States should look to Canada as well. Would that mean bringing the oil sands or tar sands oil into this country, even though its opponents call it "dirty oil"?

[CHU] Well, as I said, there are great technological improvements in cleaning up the extraction of that oil. It is a better, more reliable supplier. Canada, we have been good neighbors for a long period of time. But in the end, I will go back to what I said before. We have to diversify our transportation energy from oil. And that's the most important thing we need to do.

If we don't do that, look at what's happening in China, India, and the rest of the developing world. China now has the largest car market in the world. Last year they sold 16.7 million cars. In one year. They passed the United States. They're going to go to 20 million cars in a year. Great wealth is being generated in China. They want to drive cars. The demand for gasoline is going to skyrocket. The same is going to be true of India later. Guess what's going to happen to the oil prices.

So we see these whipsaws. It spikes up, it drops down, spikes up, drops down. This is going to continue. Unless we are less dependent on oil as a country, we will be whipsawed. And that's the most important thing.

[ASSURAS] You did bring up the fact that it is Secretary of State Hillary Clinton who's going to have to approve the pipeline or not, but you, as one of eight members of the cabinet, will be advising her. Do you think it should be built?

[CHU] Well, I think it's one of those decisions where... you're going to have to trade off a reliable supply. You also have to note that the companies that are extracting these tar sands are making great strides in improving the environmental impact of the extraction of this oil and will continue to do so. And they should be encouraged and pressed to do so. But in the end, it's one of those things that, it's not perfect, but it's a trade-off. And meanwhile, I, as Secretary of Energy, are going to focus on batteries for electric vehicles, biofuels, energy efficiency.

[ASSURAS] We'll let you know when the Obama administration makes its decision. And you'll hear more from Secretary Chu next week when we focus on the tough times facing some clean energy companies and the administration's plans to turn things around.

In the meantime, though, if you have an opinion on the pipeline, weigh in on our Web site poll at energyNOW.com. Here's the question -- "Do you support the proposed Keystone XL pipeline project?"

That's it for this week's "energyNOW!" Reach out to us on YouTube, Facebook, or Twitter. Search for us at energyNOWnews. I'm Thalia Assuras. See you next week.

[END SHOW]