British banks including the state-owned RBS are underwriting the exploitation of Canada’s tar sands which environmentalists have called the most destructive project on earth.

If there was a competition for the world’s most insanely environmentally-damaging idea, extracting oil from tar sands would certainly be a contender.

Tar sands are bitumen deposits. They’re found all over the globe – there are deposits in Jordan, Madagascar and Congo-Brazzaville – but the largest are in Alberta, in western Canada. The Alberta tar sands are so extensive that they’re the world’s second largest oil reserve, after Saudi Arabia.

But before the last decade, they weren’t regarded as a serious source of usable oil. The oil was just too poor quality, and was far too difficult and expensive to extract.

Rising oil prices, concerns about oil security and peak oil have changed all that. Virtually all the world’s major oil companies now have an operation in the tar sands and production is rapidly expanding.

BP, the only big oil company not already involved, is to decide in the next few months whether or not to go ahead with its ironically-named ‘Sunrise Project’, which is projected to get them 200,000 barrels of oil a day.

The development of the tar sands is catastrophic for local people and, through its contribution to climate change, for the world.

There are two ways of getting the oil out, both of them destructive. Deposits near the surface can be dug out through open pit mining, leaving enormous craters behind, while deeper deposits have to be forced out with pressurised steam. This uses huge amounts of water and power.

The tar sands operations now account for about 20% of all Canadian natural gas use, and it’s predicted that this could go as high as 60% by 2030. In fact, the power requirements are so great that it’s been suggested that 25 (yes, 25) nuclear reactors might be needed to supply them.

The results for local people are polluted water, acid rain, soaring rates of rare cancers and a landscape transformed into something like the surface of the moon. The tar sands development has turned the Athabasca region of Alberta into a gold rush area, but it’s multinationals, not local people who are reaping the profits.

It’s not even as if the province itself is getting rich from it; in fact, public services and infrastructure are struggling to keep up with the results of the oil boom. The treaty rights of local First Nations are also being infringed in the rush for tar sands oil.

Tar sands oil extraction has pushed up Canadian greenhouse gas emissions so far that, per head, Canadians have some of the highest GHG emissions in the world. Unlike its US neighbour, Canada was a signatory to the Kyoto treaty, but it’s on course to exceed its Kyoto target by a whopping 30%.

It isn’t just the power used to get the oil out that’s the problem. The oil itself is particularly carbon intensive when it’s burnt. The landscape destroyed by the mining operations is mostly peatland, which absorbs carbon if you leave it alone, but emits it again once you start digging through it.

The main market for the tar sands oil is the US – Canada is the US’s single biggest oil supplier. But the oil company feeding frenzy wouldn’t be possible without funding from the UK. British banks Barclays, HSBC and RBS have all underwritten tar sands projects.

Between 2007 and 2009, RBS underwrote tar sands loans to the tune of $7.5 billion. Since the government bail out of RBS left them with 84% of the shares, ultimately, the money that’s funding this is ours.

This April will see a wave of protests against RBS, BP and other companies and governments which are allowing the tar sands lunacy to go ahead.

Despite the financial interests ranged against us, there are optimistic precedents. Even before the tar sands development, Alberta was an oil province; a one-party state ruled by the same right wing bunch for the last 38 years. It isn’t, however, the only Canadian province with oil.

British Columbia, for example, has off-shore oil deposits it would love to develop, but issues about First Nations treaty rights and environmental concerns have so far got in the way. Is this because politicians in BC are just more reasonable and principled than the Albertan variety? Well, probably not.

British Columbia’s oil is still under the sea because strong left campaigns, going back to anti-Vietnam protests over thirty years ago, have kept it there.