“The projects themselves are enormous and ugly — but even uglier is the freight of carbon they contain,” said Bill McKibben, a Middlebury College professor who has been a leading voice against the pipeline. “That’s the second-largest pool of carbon on Earth. . . . No one who is serious about fighting climate change can want to see that oil out of the ground and into the air.”
The oil sands will be needed even if people use oil more efficiently, said John Abbott, executive vice president for heavy oil at Shell Canada. World population growth and improving living standards in developing countries will soon double global oil demand.
“All forms of energy have an impact, and it’s Shell’s role to ensure that whatever form of energy it generates is done in the most environmentally acceptable manner that the industry knows how to do,” Abbott said. “Once we get to that point, you cannot expect any more from an industry.”
This year, Shell and its partners will decide whether to go ahead with a project that would capture and bury carbon dioxide emissions from a plant near Edmonton that upgrades the quality of tar sands oil. Alberta and the federal government have agreed to put in $865 million, more than half the cost over the first decade. Shell would bury about a million tons of carbon dioxide a year, bringing the greenhouse gas profile of its oil sands close to parity with other U.S. imports, Shell said. Overall, however, the oil sands industry emits more than 30 million tons of carbon dioxide a year and will emit more as it expands.
“The big question is how do we reconcile oil sands growth with the fact that we’re entering a carbon-constrained future,” Grant said.
The oil sands emissions are pushing Canada over its internationally agreed-upon greenhouse gas targets, but Travis Davies of the Canadian Association of Petroleum Producers says they make up 0.1 percent of global emissions and shouldn’t be singled out.
Evaluating the environment
Many Canadians are angry that environmental groups have targeted the oil sands industry.
At the Tavern in Fort McMurray, a poster just inside the door says: “Conflict Oil” with a photo of Venezuelan President Hugo Chavez. Beneath him, it says “forced labor.” Under “Ethical oil” is a smiling, clean-cut guy in a hard hat. Below him, it reads: “Good jobs.” A best-selling book called “Ethical Oil” argues that tapping the oil sands is ethically preferable to helping the economies of Saudi Arabia or Venezuela, countries that lack many human rights.
Canada’s public safety ministry raised a ruckus in February when it listed environmentalism and its “grievances, real or imagined,” as a cause that could inspire terrorism.
“Do we have challenges? Yes,” said Brad Bellows, spokesman for MEG Energy. But he said much of the criticism of oil sands development was “political, misleading or downright wrong.”
To many Canadians, the oil sands development takes a modest bite of land in a province two-thirds bigger than California. From a helicopter, the mammoth trucks look like toys and the forest stretches north as far as the eye can see.
But to some, the oil sands development is still huge and ugly and raises environmental issues that include the effects on caribou, the loss of wetlands and the giant “tailings ponds” used to store mining waste.
“I had an uncle who lived in New Jersey, and I used to go visit. It crossed my mind recently that maybe that was their model of what the oil sands would look like: 1960s New Jersey,” said David Schindler, a professor of ecology at the University of Alberta who has studied water in the oil sands area since the 1970s and has pressed for tighter regulations.
The process of extracting the bitumen hasn’t changed since it was patented in the 1920s by a University of Alberta scientist, Karl Clark. Essentially, the oil sands are mixed with warm water. The sand sinks to the bottom, the water and suspended clay sit in the middle and the oil floats on top.
It’s the scale of the operation that’s daunting. Syncrude, a joint venture of half a dozen companies that includes China’s Sinopec and Arkansas-based Murphy Oil, is one of the biggest oil sands producers. From the air, its plant, which partially refines the viscous oil, juts up along the Athabasca River. Piles of sulfur the size of giant warehouses sit in the open. Clouds of dust kicked up by the big trucks float over the land. Across the river, deep gashes have been cut in a cleared field to drain the water from wetlands that will be stripped away.
Shell’s Jackpine and Muskeg mines are up Highway 63 — often called the world’s biggest cul-de-sac, it comes to a dead end at the northern-most oil sands projects. Across the Athabasca River, the forest parts to reveal open fields where Shell, which is expanding its operations, has started peeling back the top layer of soil to be stored in large mounds for reclamation. There is an airport big enough for jets to land with supplies and dorms for 2,500 workers.
From a black sandy ridge nearby, one can peer into the Jackpine mine. About 15 of the monster-size trucks lug the black sands to conveyer belts that feed into a series of processing facilities, which mix the sands with water, skim off the oil and spit what’s left over — known as tailings — into dark “ponds.” The tailings contain water, fine silts, bitumen, toxic napthic acid and solvents. Ditches outside the berms collect water and pump it back into the ponds.
The payoff: For every 400-ton truckload of oil sands, the companies get 200 barrels of oil. With crude oil selling for $80 to $100 a barrel, that’s very profitable.
Shell does internal evaluations of project economic viability using a hypothetical carbon emissions price of $40 a ton for carbon dioxide, even though at the moment there is no carbon tax or cap-and-trade program imposing such a fee. But the $40 price is well above prices on Europe’s existing carbon exchange, and the oil sands still pass financial muster, Abbott said.
Moreover, most energy companies spend vast sums exploring for reservoirs. They’re spared that expense here. The tar sands are oil rich and everywhere. There’s no such thing as drilling a dry hole.
And Canada is a stable democratic country. The life of an oil sands project could be 40 or 50 years, much longer than the life of a Gulf of Mexico well. Not counting capital costs, which are huge, operating costs are in the range of $35 to $40 a barrel, Abbott said.
In the future, more of the oil sands will be extracted with the technique of injecting steam into the earth. The advantages: It doesn’t leave the same gaping holes and there aren’t any tailings ponds. The helicopter pilot summed it up: “Steam goes down, money comes up.” It is also the way to reach deeper, below 400 feet, where most of the oil sands lie.
But the “steam-assisted gravity drainage” method, as it is known, still involves drilling pads, pipelines, power plants to generate steam and facilities for separating the oil and storing some of it.
Schindler says it isn’t clear whether the steam injection process will contaminate deep saline aquifers, which feed rivers.
“It’s a big peat land, so it’s like having a big sponge slowly seeping water into the rivers,” he said.
And the long lanes cut in the forest for power lines, pipelines and railroads as well as the noise of machinery could drive away caribou, Schindler said.
Can the companies clean up when they’re finished here?
The reclaimed areas won’t be as flat for one thing; the ground, now less compact, will be higher, which means fewer wetlands. Moreover, the Pembina Institute says only 1 percent of the tailings ponds have been replanted. Even if land can be reclaimed, a costly undertaking, the greenhouse gases will be long gone into the atmosphere.
Cheryl Robb, a Syncrude media relations person, stopped her pickup at an area the company has reclaimed.
A field of young trees — jack pines, aspen, spruce — was springing up above an idyllic pond. Small cannons sounded just over the hill to scare off birds that would die if they landed on the oily surface of tailings ponds. Trucks and buses barreling down Highway 63 were audible. Beyond the hill, the stacks and pipes of a processing facility loomed in the distance.