"although the processes for producing useful liquids from Canadian oil
sands result in roughly three times the upstream greenhouse gas
emissions of the average barrel of US supply, the well-to-wheels
lifecycle emissions are only 17% higher than average."
How does that work? 3x higher upstream emissions and the same downstream consumption efficiency (gasoline from tar sands and from light sweet crude oil both end up in the gas tank of the same internal combustion vehicle). That does't make any sense (unless they are including transportation energy usage within the "downstream" energy figure, but that makes little sense as well, since transporting oil, even across the globe, is remarkably efficient relative to the energy content of the transported oil, given the energy density of petroleum).
I also have to agree with Marc that your pessism about the future of U.S. oil demand reductions isn't something I share. We're seeing a major uptick in fuel economy and a push towards plug-in hybrid vehicles on the horizon that offers the potential to majorly decrease overall U.S. emissions within a 20-year time frame.
It's important to note the real tradeoffs between energy security and climate security in particular cases. When those cases arise though, we should be very careful about prioritizing investments in long-standing and expensive energy infrastructure expansions that lock us into a high-emissions energy pathway. Tar sands, coal-to-liquids, etc. are not truly in our nation's long-term interests. I worry we are throwing away far too much money - along with our climate security - to get at these dirty fuels. Better to kick the oil addiction altogether - pull the plug on oil and plug into the electric grid with PHEVs - than continue to search for dirtier and more devestating "fixes."
On a related note: just take a look at these images for a look at the scars tar sands extraction leaves on Canada's landscape.