“If anything characterizes the 21st century, it’s our inability to restrain ourselves for the benefit of other people.”
This quotation from James Katz comes from an article on the annoying use of cellular phones in public or at inappropriate times. It applies just as well to an issue currently being protested in Alberta as a new legislative session begins: the oil sands.
If oil companies had to bear all the direct and indirect costs associated with production in the oil sands, it seems doubtful that the industry would exist. Those costs include air and water pollution, the large-scale use of fresh water supplies, deforestation, soil contamination, the wholesale destruction and of large tracts of land, and heavy greenhouse gas emissions.. The Pembina Institute – probably Canada’s best environmental NGO – has a website devoted to oil sands issues.
With oil likely to hit $100 a barrel this week, it seems probable that ever more of Alberta’s northern boreal forest will be carved up for petroleum.
Sharing the spoils
Nov 6th 2007
From Economist.com
OIL prices seem to hit a new peak each week. This is good news for governments which take a cut of revenues. And coffers will swell further as companies explore new sources of oil that had previously been too pricey to extract, such as oil sands in Alberta, Canada. The province’s government recently announced an increase in royalties from 47% to 55% of net revenues in 2010. But this is still a relatively small share compared with many countries. The tax man in Norway, Russia and Libya takes over 70% of revenues.
Graphic
This presentation is also informative. You can get it as a PowerPoint slideshow.
Alberta’s oil sands, located in-between Fort McMurray, Peace River, and Lloydminster, accounted for about 25% of Canada’s total oil production in 2001.
Within 5 years, oil sands production is expected to surpass 1 million barrels/day and by 2010, 1.9 million barrels/day.
Alberta’s oil sands deposits total 2.4 trillion barrels of oil, and established reserves are only second to Saudi Arabia’s 263 billion barrels at 175 billion barrels.
In the interests of fairness and balance, here is the argument in favour of the oil sands. (YouTube video)
This Week in Petroleum 11-7-07
$100 Edition? – to be updated following the release of the report
“It seems that every bit of news lately favors higher oil prices. In the wake of a perfect storm of weather-related and geopolitical events, Tapis went through the $100 mark overnight, and WTI is knocking at the door. In case you have been asleep for a week, the Fed cut interest rates, Mexico’s oil-rich Tabasco region is underwater, and oil companies are evacuating platforms in some parts of the North Sea ahead of a fierce storm predicted to generate 35-foot waves. The wind is howling in Aberdeen already, and did so throughout the night. (A member of my team is stuck offshore and will have to ride out the storm, forecast for Thursday.)”
Here is a cool graphic showing one day worth of air travel in the US.
More information is here.
Sweating the sands
Nov 1st 2007 | OTTAWA
From The Economist print edition
Alberta raises oil royalties—but by less than meets the eye
WHEN Ed Stelmach, an unassuming farmer from rural Alberta, became the surprise choice of the province’s ruling Conservatives to replace the abrasive Ralph Klein as provincial premier, political pundits found it hard to recall a single initiative he had championed in four previous cabinet jobs. This month, however, Mr Stelmach finally made his mark. He announced what he accepted was a controversial decision to raise oil and gas royalties, which average about C$10 billion ($10.5 billion) a year, by 20% from 2010.
About 12 barrels of water are needed to produce each barrel of bitumen from surface mined oil sands. Most of this water can be recycled, but a significant portion forms a mud-like suspension called fluid fine tailings. These tailings are stored in above ground containment areas, many of which are large enough to be visible from space. Current proposals would see these tailings pumped back into the mined-out area and covered with water to create an artificial lake. While this form of reclamation seems economical, its long term effectiveness and environmental sustainability is largely unproven.
The cash nexus
Is there really so much money in environmental devastation that it can’t be stopped?
In the Nov. 12 New Yorker, Elizabeth Kolbert published an article (unavailable online; abstract here) typical of her style: spare, restrained, vivid, cogent, devastating. The topic was Canada’s tar sands, now being profitably exploited by the major oil companies: Shell, Conoco-Phillips, Chevron, and ExxonMobil.
And they’ve only just begun. According to Kolbert, the oil majors intend to invest more than $75 billion over the next five years in building infrastructure to transform a little bit of Canada into fuel for our cars.
“Thanks in large part to what’s happening in the tar sands,” Kolbert reports, “Canada has become America’s No. 1 source of imported oil; the country supplies the United States with more petroleum than all of the nations of the Persian Gulf combined.”
Petroleum derived from tar sands emits 15 to 40 percent more total greenhouse gas per barrel than the conventional stuff. To show what extracting it does to landscapes, the New Yorker ran an aerial photo of a used-up area in Alberta, home to the tar sands. It’s as if some malign giant tried mightily to skin a vast swath of the earth with a dull blade.
Toward the end of the article, Kolbert delivers what I found to be a chilling denouement. She quotes a Canadian politician: “There is no environmental minister on earth who can stop the oil from coming out of the sand, because the money is too big.”
This, mind you, in a country that signed the Kyoto pact.
O Canada, what are you doing?
Tar sands are the enemy of the planet
“What we have here is arguably the most environmentally destructive activity man has ever attempted, with a compliant government, insatiable demand, and an endless supply of capital turning it into “a speeding car with a gas pedal and no brakes.” It sucks down critical and rapidly diminishing amounts of both natural gas and water, paying neither for its consumption of natural capital nor its environmental destruction, to the utter detriment of its host. And all to eke out maybe a 10% profit, if it turns out that the books haven’t been cooked, and if the taxation structure remains a flat-out giveaway.”
The Canadian unit of Royal Dutch Shell PLC formally opened a 2,500-person capacity, state-of-the-art housing complex in Alberta last month that will house the company’s oil sands workers.
Called Albian Village, the facility is the centerpiece of Shell Canada’s $12 billion project in Wood Buffalo. Each room features a flat-screen television, high-speed Internet and daily maid service.
The complex also features recreation facilities, fitness classes and a full dining facility, all at no cost to the oil workers who come to Alberta’s oil sands, where even inexperienced truck drivers can expect to pull down C$100,000 per year…
In Fort McMurray, the regional capital in northern Alberta, jobs start at $100,000 per year, leading to the population almost doubling since 1999 to 65,000.
Under the proposed federal emissions trading program, tar sands developers will be eligible for up to $700 million in “carbon credits” – even as they increase their greenhouse gas emissions.
Meanwhile, Ontario will get nothing for closing its coal-fired plants, thereby eliminating about half of the province’s greenhouse gas emissions.
Sounds absurd, right? But that is the analysis of World Wildlife Fund-Canada, and it is supported by officials from the provincial government and its utility, Ontario Power Generation.
Here’s why: rather than mandate absolute reductions in greenhouse gas emissions, the federal government has opted for cuts in the “intensity” of emissions.
Thus, the overall output of greenhouse gases from Alberta’s tar sands will rise as production expands, but as long as the per-barrel level of emissions comes down, the oil companies will be rewarded.
A study by the Tyndall Centre for Climate Change Research, a respected British institute, commissioned by WWF-Canada to look at the federal emissions trading proposals, calculates that reward at up to $700 million.
“This is a plan in which it pays to pollute,” says Mike Russill, president of WWF-Canada.
Source
New report: Alberta Tar Sand Companies Undermining Our Environment
By Kevin Grandia on water quality
A survey released today by the Alberta-based Pembina Institute and the World Wildlife Fund finds that companies involved in the development of the Alberta tar sands are seriously lacking when it comes to protecting our environment.
Tar sand companies were invited to respond to a survey based on 20 different environmental indicators in five categories: environmental management, land impacts, air pollution, water use and management of greenhouse gases.
The results are embarrassing and Canadians should be outraged that so much profit is being made with so little concern for the impact it’s having on our environment.
See also:
Oil sands report card
* January 15th, 2008
Extracting bitumen from the oil sands is very energy intensive; and, as a result, oil sands mine operations are major emitters of greenhouse gases (GHGs). Syncrude’s and Suncor’s oil sands mining operations are Canada’s 3rd and 6th largest emitters of GHGs respectively.
Syncrude emitted 10.3 million tonnes of GHGs in 2005, equivalent to the emissions of 2.7 million personal vehicles.
(Source: Pembina)
Canada is faced with the challenge and international legal obligation, under the Kyoto Protocol, of reducing absolute GHG emissions by 6% below 1990 levels by 2008-2012. Because of years of inaction by government and industry, current projections suggest that, by 2010, emissions will be 32% higher than 1990 levels. This trend of rapidly increasing GHG emissions stands in stark contrast to the urgent need to significantly reduce GHG emissions worldwide. Developed countries such as Canada need to reduce emissions by 80% or more below the 1990 level by 2050 – and, by 2020, be well on track to doing so – if we are to limit average global warming to 2ºC above the preindustrial level and thereby avoid the worst impacts of climate change.
Research from the Tyndall Centre commissioned by WWF shows that the intensity based targets proposed by the Canadian Government fail to provide a framework that will provide the necessary reductions.73 In fact these targets would provide a perverse incentive, whereby companies could receive up to $700 million in credits just by delivering expected efficiency gains, but with absolute carbon emissions doubling or tripling.
(Source: Pembina)
An empire from a tub of goo
How did the quest to retrieve the treasure hidden beneath huge swaths of northern Alberta go from fool’s errand to monumentous payoff? Erin Anderssen, Shawn McCarthy and Eric Reguly explain.
The Globe and Mail has a website devoted to the oil sands.
“There are a lot of great investments that you can make. If you are investing in tar sands or shale oil then you have a portfolio that is crammed with subprime carbon assets.
And it is based on an old model.
Junkies find veins in their toes when the ones in their arms and their legs collapse.”
–Al Gore
The Dominian: News From the Grassroots
The Tar Sands Issue (#48) (PDF)
Green.view
The politics of sand
Aug 25th 2008
From Economist.com
What constitutes sustainability?
IT’S official: extracting oil from Canada’s vast deposits of bitumenous sand is unsustainable. So, at any rate, Britain’s Advertising Standards Authority (ASA) implicitly concluded when it ruled that Royal Dutch Shell was misleading the public by describing its tar-sands operation as “sustainable”.
WWF, the environmental NGO that lodged the complaint with the ASA, dislikes the tar sands (or oil sands, as Shell prefers to call them) because turning them into fuel consumes much more energy than refining crude oil does. If that energy is made by burning natural gas—as it is in all tar-sands projects at the moment—and so involves extra emissions of greenhouse gases, then the resulting fuel is two or three times as bad for the atmosphere as normal petrol or diesel. That is no good for the world’s climate, and so, in WWF’s view, unsustainable.