When two of the world’s most famous billionaires, Bill Gates and Warren Buffett, took a tour of the oil sands in northern Alberta in mid-August, it caught the attention of journalists. The visit by the two tycoons is a sign of the growing U.S. interest in the region, which contains an estimated 1.7 trillion barrels of crude bitumen—the heaviest and thickest form of petroleum, resembling molasses.
Among some Alberta residents, there is a growing sense that oil-sands development is bringing some very high environmental costs. Simon Dyer, director of the oil sands program at an environmental think tank called the Pembina Institute, told the Georgia Straight in a phone interview that his organization did some polling last year and found that seven in 10 respondents supported a “pause” in development. He noted that extracting petroleum from the oil sands requires a massive amount of energy and water to separate the petroleum from the sand, rock, and other substances.
“They’re moving four tonnes of the stuff to extract a single barrel from the oil sands,” Dyer said, “two tonnes of overburden and two tonnes of the oil sands itself just to get one barrel.”
The 1.7-trillion-barrel figure is about 30 percent higher than the proven oil reserves around the globe. It’s estimated that there are nearly three times as many barrels of oil in the Canadian oil sands than the combined proven reserves of Saudi Arabia, Iran, Venezuela, and Iraq. However, not all of the oil in Alberta and parts of western Saskatchewan is easily accessible. According to the Alberta Energy Resources Conservation Board (ERCB), only six percent of the bitumen is in shallow deposits.
The ERCB reported last year that there are an estimated 172.7 billion barrels of remaining reserves that can be extracted with current technology; the ultimate potential is in the range of 315 billion barrels. The world’s largest producer, Saudi Arabia, has reported approximately 260 billion barrels of proven reserves.
Strategy West Inc., a Calgary consulting firm, released a report in August pointing out that 80 to 85 percent of the “oil sands” are made up of sand, clay, and other mineral matter; only one to 18 percent might contain crude bitumen. The report stated that there are 15 oil-sands deposits, with most of the activity occurring in three areas covering 140,000 square kilometres: Athabasca Wabiskaw-McMurray, Peace River Bluesky-Gething, and Cold Lake Clearwater.
Dyer listed a host of environmental consequences. For example, 41 to 47 percent of the greenhouse-gas-emission increase in Canada from 2003 to 2010 will be directly attributable to oil-sands projects, he said. Every day, the industry creates 1.8 billion litres of tailings; these waste deposits, often in large lakes, now cover 130 square kilometres. Woodland caribou herds have declined by 50 percent in the last 10 years in northeastern Alberta as a result of the cumulative impact of oil-sands developments, he claimed. The industry is the biggest user of water from the Athabasca River. There have been reports of clusters of rare cancers in a Native community downriver and, more recently, a two-mouthed fish was pulled out of Lake Athabasca.
Dyer acknowledged that no one knows what created the two-mouthed fish, but he alleged that there isn’t a great deal of interest on the part of the government to get to the bottom of these types of questions. “We’ve already leased 65,000 square kilometres, which is an area twice the size of Vancouver Island,” he said. “We’ve done that with no environmental assessment whatsoever. You can lease land in those land sales we hold every two weeks. That starts the ball rolling on the development process, right? By the time we get to the environmental-assessment stage, it’s too late. And no project has ever been turned down.”
Cheryl Robb, a spokesperson for the Alberta environment ministry, told the Straight in a phone interview that last October the provincial government adopted a different method for evaluating developments. “We’re calling it the cumulative-effects management approach,” she said. “The idea behind it is, instead of looking at projects on a one-by-one, project-by-project basis, as a government we are going to be looking at a regional perspective”¦and involving different stakeholders from the region.”
She said that broad objectives will be set for a region “from an environmental perspective, based on scientific outcomes”. On the issue of tailings, she said that “mature companies” such as Syncrude and Suncor recycle water from the ponds and use it in their industrial processes, reducing intake from the Athabasca River.
“We do know the impact of tailings ponds is one of the major environmental concerns that we have to address,” Robb said. “That’s why we have invested millions of dollars into”¦research into dry tailings, and different ways to manage that. We just don’t have anything right now ready to implement, but it is something that is a priority and is being researched heavily.”
Robb also noted that this summer, the Alberta government committed $2 billion to promote the use of carbon-capture-and-storage technology, which would enable greenhouse gases to be stored underground. EnCana has a project in southeastern Saskatchewan that has already stored more than 10 million tonnes, according to the Canadian Association of Petroleum Producers.
Dyer said that carbon capture and storage is achievable at a cost of $100 per tonne. “That’s economically viable,” he claimed, adding that it isn’t being done because companies that don’t meet greenhouse-gas intensity targets only have to pay a $15-per-tonne fee.
On August 18, the Pembina Institute, Toxics Watch Society of Alberta, and the Fort McMurray Environmental Association formally withdrew from the multistakeholder Cumulative Environmental Management Association, claiming in a news release that it had “lost all legitimacy” for addressing environmental management of the oil sands. In the same release, Pembina Institute policy director Chris Severson-Baker claimed that the Alberta government was engaging in a “talk and drill” approach to developing the oil sands.
Ann Dort-McLean, president of the Fort McMurray Environmental Association, told the Straight in a phone interview that the sheer volume and expansion of the oil-sands developments is overpowering her community. She said there are 20,000 to 30,000 workers living in camps in her town because there isn’t enough housing. “The government hasn’t taken any responsibility or leadership in making sure that the rapid expansion isn’t to the detriment of our environment,” she said. “You have a community in a crisis situation over infrastructure issues and housing, both residential and commercial.”
The Canadian Association of Petroleum Producers, on the other hand, argues that oil-sands development is “controlled by strict, government-approved environmental standards that are among the most comprehensive in the world”. In a document sent to the Straight, CAPP also noted that the oil-sands are responsible for four percent of Canada’s greenhouse-gas emissions, but account for just 0.1 percent of global emissions. “Regulations, which came into effect on July 1, 2007, require facilities emitting more than 100,000 tonnes of GHGs annually [to] reduce emissions intensity by 12 per cent,” the document states.
But critics say that reducing intensity won’t have an effect on overall emissions as long as more projects keep coming on-line. Dyer said that by 2020, oil-sands projects will account for 12 percent of Canada’s greenhouse-gas emissions if companies aren’t required to capture carbon and store it underground. There are 1.4 million barrels produced per day now; that’s forecast to increase to five million barrels per day in 2030.
In September, the Vancouver International Fringe Festival will include a play about the oil sands called Crude Love (see page 41), which is a love story with a backdrop of U.S. military interest in the region. The recent visit of Gates and Buffett to northern Alberta suggests that Americans are paying attention. And why not? Someone is going to have to help meet U.S. demand for 20 million barrels of oil a day, and these days many Venezuelans, Iraqis, and Iranians are not very fond of the American government.