June 8, 2006
Canada Wrests Oil from Sands, But at What Cost?
By Wojtek Dabrowski
AURORA MINE, Alberta -- Canada's vast oil sands, the biggest source of oil outside Saudi Arabia, don't give up their riches easily.
The world's largest haul trucks -- house-sized monsters with wheels the size of pick-up trucks -- ship the muck away for crushing and mixing with hot water before further extraction and upgrading. The start-up costs are huge, but with oil around $70 a barrel, the rewards are large as well.
But while the black gold brings billions of dollars to the oil firms and the province of Alberta, critics say the operations are taking too big a toll on the environment.
"I think that oil companies need to be held accountable financially and politically for the damage that they're causing to ecosystems," said Lindsay Telfer, the Prairie chapter director of the Sierra Club of Canada.
She said oil sands production generates about three times as much greenhouse gas emissions as conventional oil production, and it takes three to six barrels of water to produce a barrel of oil -- much of it from the nearby Athabasca River.
But the companies point proudly to areas where they have restored the land after they finished mining, and they say they are committed to bringing the wilderness back to its former splendor once the mining ends.
Syncrude Canada Ltd., which operates the gaping hole in the ground known as the Aurora Mine some 45 miles north of Alberta's oil boomtown of Fort McMurray, is the world's largest producer of synthetic oil from the tar sands.
It is a partnership of energy companies Canadian Oil Sands Trust, Imperial Oil Ltd., Petro-Canada, ConocoPhillips, Nexen Inc., Nippon Oil Corp. unit Mocal Energy Ltd. and Murphy Oil Corp..
Syncrude mines about 180 million tonnes of oil sands a year, turning it into some 250,000 barrels of oil a day. Like other companies developing the region, it is eyeing further expansion.
Syncrude's utilities complex already cranks out enough electricity each day to power a city of 500,000 as it works nonstop to turn the tar-soaked earth into synthetic crude.
The company boasts of its energy efficiency and its land reclamation program, where it restores the land it mines at a cost of about C$7 million ($6.5 million) a year.
One such rolling green plot, which was an oil-sands mine about 20 years ago, looks idyllic, bordered by young trees and populated by bison.
But every few seconds, a loud pop breaks the calm as propane-powered cannons scare waterfowl away from nearby ponds. The water in those pools is contaminated by leftovers from oil-sands mining and could harm the birds.
"Basically, we don't want birds to land on process-affected water," Syncrude spokesman Alain Moore said.
Environmentalists and local residents are also worried about air quality, fears that were highlighted last month when Alberta's environment regulators shut down a C$8.4 billion ($7.6 billion) Syncrude expansion just 10 days after it began operation.
Syncrude thinks problems with a flue gas desulfurizer -- the very unit designed to cut sulfur dioxide emissions -- were behind residents' complaints regarding a smell described as a mixture of cat urine and bodily odor. It expects to fix the problem within a month or two.
But Chief Executive Charles Ruigrok also said Syncrude and others are getting a bad rap on greenhouse gases.
"I think we need to be transparent here. If you grow the production in oil sands, you're going to grow total greenhouse gas emissions from oil sands production," he said recently.
But he said the oil and gas industry is not the main culprit in emissions of the gases, widely believed to cause global warming.
"Consumers, whether it be through heating their homes, driving their vehicles, represent the lion's share of greenhouse gas emissions in this country," he said.
Under the Kyoto treaty on global warming that it ratified in 2002, Canada has promised to cut greenhouse gas emissions by 6 percent from 1990 levels by 2012. However, the federal environment minister says that's an impossible goal as emissions are now 35 percent above the 1990 levels. The government says the treaty needs to be rethought.
For its part, Syncrude expects to cut its per-barrel carbon dioxide emissions by 24 percent between 1990 and 2012, partly with the help of a lower-temperature extracting process and new technologies.
It says it has cut its emissions of sulfur dioxide per barrel by 50 percent since 1983, and plans to reduce them further by adding flue-gas scrubbers to a pair of its cokers -- the units that crack bitumen into smaller molecules at the start of the upgrading process.
But overall emissions from the region will still rise as companies crank up oil production, and environmentalists like Telfer say the pace of development overshadows the efficiency improvements attained by the oil companies.
"It's still having a pretty major net negative impact on our ecosystems," she said.