July 27, 2010
Alberta’s oil reserves are the second largest in the world and international companies have found a foundation in Canadian sands. Despite high costs - especially environmental costs - dirty energy drives Alberta forward.
_By: Sindre Sverdrup Strand (article awarded PWYP Norway’s 2010 stipend for journalism students)_
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[img_assist|nid=402|title=|desc=SOURCES: Google Maps, Pembina Institute, Energy Alberta|link=none|align=right|width=200|height=640] **IT’S** a warm spring day on the Suncor oil sands field. The only thing that could be confused with clouds, are the columns of smoke rising from the refinery. The air is heavy with the sour scent of oil, and trucks weighing up to 60 tons run for every hour of both the day and the night. Robert McMillan sits behind the wheel of a Ford pick-up that might reach halfway up on one of the immense tires. – _Do you see the load of that truck_ , asks his companion John McCormac. – _Can you see how dark the soil is? That’s good feed._ The Ford stops by one of the 120 tons crushers just as one of the huge trucks dumps its load into it. One ton of hydraulic force grinds sand, gravel and oil down on the conveyor belt that goes to the next feeder. After yet a trip through a feeder and a belt, the ground soil is transported to one of the huge, steaming boilers, where sand and oil is separated. [img_assist|nid=397|title=|desc=Robert McMillan (to the left) and John McCormack. – But you can just write the hansim Irishman, jokes McCormack.|link=none|align=left|width=296|height=175]Walking up the 156 steps in plant 86, the air gets warmer and denser, while the smell of foil threatens to become unbearable. On the top of the boiler, the thick, black bitumen is being skimmed off. This is the very basis of operations here. The oil runs in thin streams down walls pipes and steps, and huge pipes run to and fro the plant in all directions. – _There are 15 kilometres of pipes here,_ John McCormack tells us, before he continues his round as a maintenance supervisor. Approximately 290 600 barrels of processed bitumen run daily through the pipes on Suncor’s sites. Water is run in to the separation tanks, and the leftovers are flushed out with water. Hydro transport is the technology that makes the business so lucrative, and up to 12 barrels of water can be necessary to produce one barrel of bitumen. On average 2,5 barrels of water will never be useable again. h4. Bird’s eye view Seen from a small airplane over the fields, the ponds dominate the landscape. The so-called tailings ponds, man-made lakes where the leftover water and sediments from the extraction process is flushed out, make up most of the local footprint of the sands. – _The industry hasn’t got a good track record of cleaning up after them,_ sighs biologist Simon Dyer. As the head of the think tank Pembina’s oil sands watch, he knows what he’s talking about. – _Here at Pembina, we focus on sustainable energy development. For us, the oil sands have become a case study of un-sustainable development,_ Dyer says. h4. Steam and emissions Oil sand extraction is done in two different ways today. In one, the oil rich sand is dug out of the ground by big diggers, before it’s dumped into the crushers and boilers McCormack and his colleagues maintain. The other way is to extract the bitumen on the spot, using steam and chemical solvents. [img_assist|nid=396|title=|desc=THE old bucketwheel diggers are a long time retired. Here in Norway, minister of the environment Erik Solheim, thinks the entire business is a relic of the past.|link=none|align=left|width=250|height=405]In this steam-driven business, Norwegian Statoil has decided to set up shop. Next year, the Statoil plant will start full scale production, and already have there been many public outcries. Even though the technology is the pride of the Alberta government, our own minister of the environment, Erik Solheim, is less than pleased. - _Oil sand extraction is a relic of the past, and not something we should look to in the future,_ he says. Oil sand extraction demands huge quantities of water, but while the day mining on general takes 2,5 barrels of water per barrel of bitumen, the SAGD-drilling (Steam Assisted Gravity Drainage) only uses one barrel per barrel bitumen. Simon Dyer with the Pembina Institute shares Solheim’s lack of enthusiasm. – _If we look at the emissions, SAGD has higher carbon emissions than day mining. There are higher emissions of sulphur dioxides, and the water usage is still way too high. Seen from my perspective as a biologist, SAGD is a fragmentation of the forest that will ruin the habitats of many now endangered species._ On the in flight to Fort McMurray, Dyer’s warnings are backed up by the view. Hundreds of straight lines mar the forest below. Trees and nature have had to make place for the new technology. This part of Canada is covered by vast areas of untouched nature, but 800 square kilometres of forest have already been levelled for the benefit of the industry. In the municipality of Wood Buffalo, where we just landed, almost every square kilometre is leased out for future development. The Pembina Institute just published the In-situ report card «Drilling Deeper», where they looked at the stats behind the steam driven extraction. Engineer Marc Huot can tell that, after a year of digging, the results were far from uplifting. – _Even with a method where a 100 per cent score is determined by the top of the class, we had to fail four of the nine projects._ And the numbers only tell one story. When Huot asked the companies for feedback on one year of research, only three of nine got back to him. – _That was very frustrating. How can we expect that the industry is willing to make changes to be more environmentally friendly when only three out of nine are willing to talk to us on something where we did the work for them?_ h4. Development In the southern tower of Petroleum Plaza sits the executive floor of Alberta Environment. Here, research leader Preston McEachern sums up the province’s environmental policy in «sustainable development». – _The legislation, Alberta’s environmental defence and enhancement plan, is balanced with economical values, but it’s a very environmentally conscious piece of legislation,_ he says. And just last year, McEachern explains, a directive was passed to make the industry clean up all tailings five year after dumping. The task that faces the province and the industry is immense. Tailings ponds now cover 140 square kilometres, an area bigger than [the city of] Drammen back in Norway. h4. A reasonable payback – _What you in Norway have done, is to treat your oil development as an investment and the transformation of one kind of wealth to another. What we’ve done in Alberta, is simply to blow it. New roads, more tax cuts and public services,_ says André Plourde. [img_assist|nid=392|title=|desc=HOW many of the jobs «created» in the oil sands are jobs we steal from tomorrow, asks economy professor André Plourde.|link=none|align=right|width=175|height=253]The professor of economy has specialised in energy economy, and is one of the «architects» of today’s royalty regime. But he has no doubts that the industry is getting away cheap with the regime as it stands. – _When it comes to royalties, it’s my opinion that they are way too low, and especially when oil prices are high. One can only conclude that the government of Alberta has decided to prioritise encouraging a high activity over securing a high revenue flow for the people of the province. But if the goal is to generate jobs, I think one should ask the question if this really is the industry we most want to create jobs in._ Plourde also says that the government’s relationship to the industry in many cases has been too cozy. – _I think this is deserved criticism, both regarding to process and results: There has been a tendency to decide things behind closed doors. The government consults industry, and often industry alone, and then we’ve got a brand new directive. The process I was a part of, was an open one, but that was something of an «out-runner»._ But Plourde emphasizes that the oil has been a great asset to Alberta. – _We have a high standard of living here in Alberta. We’ve got high levels of social funding and low tax levels. When I last calculated, Albertans had 180 per cent more money than the average Canadian, and this is directly connected to the health of the oil and gas industry._ The high standard of living and the huge sums generated by the industry does however leave many questions unasked. – _Let’s ask this way: Are the owners of this resource getting a reasonable payback for their property? I would say no,_ says Plourde. h4. Our land In the middle of the oil sands area, you can find the native reserve Fort McKay. In a spacious, well furnished office at the council building, sits Cree chief Jim Boucher. On the wooden desk lie documents and office utensils, and in a corner is an office putter. On top of a shelf sits the traditional headdress, and a collection of decorated clubs and tomahawks lies on a table. Fort McKay itself is clean, calm and well functioning – a stark contrast to most native societies in Canada. [img_assist|nid=395|title=|desc=BOTH existing and planned oil sand activity in Wood Buffalo is on traditional Fort McKay soil. For chief Jim Boucher and his community, the cooperation with the industry is a necessary evil.|link=none|align=left|width=271|height=175]– _We’ve done things a little differently here in Fort McKay,_ the chief says. But times haven’t always been this good in the small community. – _My people have lived in this area for thousands of years. For a long time, this was lucrative land for hunting and trapping, but when the anti fur campaigns in Europe ruined our economy, we had nothing to go to. My people didn’t have the ability to participate in the modern economy_. What eventually proved to be the salvation, was something the community had opposed from the very beginning. – _When the oil sand development started in the nineties, we went against their applications. We’re still not positive towards the development, but we don’t have an alternative. So we decided to take part in the new economy._ Thanks to visionary leadership and positive action, the Fort McKay natives managed to get a foothold in the industry through the Fort McKay group of companies. Now, the oil based economy of Fort McKay contributes with 94 per cent of the revenue for the Canadian First Nation government. – _The oil sands development poses a threat to our traditional way of life. People are worried for their health and for the destruction of the land. Trapping lines and hunting is being ruined by construction and tailings ponds, but without the oil sands, this region would be economically depressed,_ says Boucher. Outside flows the Athabasca River. The ice just let go, and several flakes run freely down with the flow, while the Cree chief looks at the scene through his office window. – _This was once a bread basket for my people, but now there is hardly any fish in the river. We’re losing our land more and more for every day that passes,_ he says. – _But we don’t really have a choice. Either you participate in the regional economy, or you watch from the side line._
[img_assist|nid=402|title=|desc=SOURCES: Google Maps, Pembina Institute, Energy Alberta|link=none|align=right|width=200|height=640] **IT’S** a warm spring day on the Suncor oil sands field. The only thing that could be confused with clouds, are the columns of smoke rising from the refinery. The air is heavy with the sour scent of oil, and trucks weighing up to 60 tons run for every hour of both the day and the night. Robert McMillan sits behind the wheel of a Ford pick-up that might reach halfway up on one of the immense tires. – _Do you see the load of that truck_ , asks his companion John McCormac. – _Can you see how dark the soil is? That’s good feed._ The Ford stops by one of the 120 tons crushers just as one of the huge trucks dumps its load into it. One ton of hydraulic force grinds sand, gravel and oil down on the conveyor belt that goes to the next feeder. After yet a trip through a feeder and a belt, the ground soil is transported to one of the huge, steaming boilers, where sand and oil is separated. [img_assist|nid=397|title=|desc=Robert McMillan (to the left) and John McCormack. – But you can just write the hansim Irishman, jokes McCormack.|link=none|align=left|width=296|height=175]Walking up the 156 steps in plant 86, the air gets warmer and denser, while the smell of foil threatens to become unbearable. On the top of the boiler, the thick, black bitumen is being skimmed off. This is the very basis of operations here. The oil runs in thin streams down walls pipes and steps, and huge pipes run to and fro the plant in all directions. – _There are 15 kilometres of pipes here,_ John McCormack tells us, before he continues his round as a maintenance supervisor. Approximately 290 600 barrels of processed bitumen run daily through the pipes on Suncor’s sites. Water is run in to the separation tanks, and the leftovers are flushed out with water. Hydro transport is the technology that makes the business so lucrative, and up to 12 barrels of water can be necessary to produce one barrel of bitumen. On average 2,5 barrels of water will never be useable again. h4. Bird’s eye view Seen from a small airplane over the fields, the ponds dominate the landscape. The so-called tailings ponds, man-made lakes where the leftover water and sediments from the extraction process is flushed out, make up most of the local footprint of the sands. – _The industry hasn’t got a good track record of cleaning up after them,_ sighs biologist Simon Dyer. As the head of the think tank Pembina’s oil sands watch, he knows what he’s talking about. – _Here at Pembina, we focus on sustainable energy development. For us, the oil sands have become a case study of un-sustainable development,_ Dyer says. h4. Steam and emissions Oil sand extraction is done in two different ways today. In one, the oil rich sand is dug out of the ground by big diggers, before it’s dumped into the crushers and boilers McCormack and his colleagues maintain. The other way is to extract the bitumen on the spot, using steam and chemical solvents. [img_assist|nid=396|title=|desc=THE old bucketwheel diggers are a long time retired. Here in Norway, minister of the environment Erik Solheim, thinks the entire business is a relic of the past.|link=none|align=left|width=250|height=405]In this steam-driven business, Norwegian Statoil has decided to set up shop. Next year, the Statoil plant will start full scale production, and already have there been many public outcries. Even though the technology is the pride of the Alberta government, our own minister of the environment, Erik Solheim, is less than pleased. - _Oil sand extraction is a relic of the past, and not something we should look to in the future,_ he says. Oil sand extraction demands huge quantities of water, but while the day mining on general takes 2,5 barrels of water per barrel of bitumen, the SAGD-drilling (Steam Assisted Gravity Drainage) only uses one barrel per barrel bitumen. Simon Dyer with the Pembina Institute shares Solheim’s lack of enthusiasm. – _If we look at the emissions, SAGD has higher carbon emissions than day mining. There are higher emissions of sulphur dioxides, and the water usage is still way too high. Seen from my perspective as a biologist, SAGD is a fragmentation of the forest that will ruin the habitats of many now endangered species._ On the in flight to Fort McMurray, Dyer’s warnings are backed up by the view. Hundreds of straight lines mar the forest below. Trees and nature have had to make place for the new technology. This part of Canada is covered by vast areas of untouched nature, but 800 square kilometres of forest have already been levelled for the benefit of the industry. In the municipality of Wood Buffalo, where we just landed, almost every square kilometre is leased out for future development. The Pembina Institute just published the In-situ report card «Drilling Deeper», where they looked at the stats behind the steam driven extraction. Engineer Marc Huot can tell that, after a year of digging, the results were far from uplifting. – _Even with a method where a 100 per cent score is determined by the top of the class, we had to fail four of the nine projects._ And the numbers only tell one story. When Huot asked the companies for feedback on one year of research, only three of nine got back to him. – _That was very frustrating. How can we expect that the industry is willing to make changes to be more environmentally friendly when only three out of nine are willing to talk to us on something where we did the work for them?_ h4. Development In the southern tower of Petroleum Plaza sits the executive floor of Alberta Environment. Here, research leader Preston McEachern sums up the province’s environmental policy in «sustainable development». – _The legislation, Alberta’s environmental defence and enhancement plan, is balanced with economical values, but it’s a very environmentally conscious piece of legislation,_ he says. And just last year, McEachern explains, a directive was passed to make the industry clean up all tailings five year after dumping. The task that faces the province and the industry is immense. Tailings ponds now cover 140 square kilometres, an area bigger than [the city of] Drammen back in Norway. h4. A reasonable payback – _What you in Norway have done, is to treat your oil development as an investment and the transformation of one kind of wealth to another. What we’ve done in Alberta, is simply to blow it. New roads, more tax cuts and public services,_ says André Plourde. [img_assist|nid=392|title=|desc=HOW many of the jobs «created» in the oil sands are jobs we steal from tomorrow, asks economy professor André Plourde.|link=none|align=right|width=175|height=253]The professor of economy has specialised in energy economy, and is one of the «architects» of today’s royalty regime. But he has no doubts that the industry is getting away cheap with the regime as it stands. – _When it comes to royalties, it’s my opinion that they are way too low, and especially when oil prices are high. One can only conclude that the government of Alberta has decided to prioritise encouraging a high activity over securing a high revenue flow for the people of the province. But if the goal is to generate jobs, I think one should ask the question if this really is the industry we most want to create jobs in._ Plourde also says that the government’s relationship to the industry in many cases has been too cozy. – _I think this is deserved criticism, both regarding to process and results: There has been a tendency to decide things behind closed doors. The government consults industry, and often industry alone, and then we’ve got a brand new directive. The process I was a part of, was an open one, but that was something of an «out-runner»._ But Plourde emphasizes that the oil has been a great asset to Alberta. – _We have a high standard of living here in Alberta. We’ve got high levels of social funding and low tax levels. When I last calculated, Albertans had 180 per cent more money than the average Canadian, and this is directly connected to the health of the oil and gas industry._ The high standard of living and the huge sums generated by the industry does however leave many questions unasked. – _Let’s ask this way: Are the owners of this resource getting a reasonable payback for their property? I would say no,_ says Plourde. h4. Our land In the middle of the oil sands area, you can find the native reserve Fort McKay. In a spacious, well furnished office at the council building, sits Cree chief Jim Boucher. On the wooden desk lie documents and office utensils, and in a corner is an office putter. On top of a shelf sits the traditional headdress, and a collection of decorated clubs and tomahawks lies on a table. Fort McKay itself is clean, calm and well functioning – a stark contrast to most native societies in Canada. [img_assist|nid=395|title=|desc=BOTH existing and planned oil sand activity in Wood Buffalo is on traditional Fort McKay soil. For chief Jim Boucher and his community, the cooperation with the industry is a necessary evil.|link=none|align=left|width=271|height=175]– _We’ve done things a little differently here in Fort McKay,_ the chief says. But times haven’t always been this good in the small community. – _My people have lived in this area for thousands of years. For a long time, this was lucrative land for hunting and trapping, but when the anti fur campaigns in Europe ruined our economy, we had nothing to go to. My people didn’t have the ability to participate in the modern economy_. What eventually proved to be the salvation, was something the community had opposed from the very beginning. – _When the oil sand development started in the nineties, we went against their applications. We’re still not positive towards the development, but we don’t have an alternative. So we decided to take part in the new economy._ Thanks to visionary leadership and positive action, the Fort McKay natives managed to get a foothold in the industry through the Fort McKay group of companies. Now, the oil based economy of Fort McKay contributes with 94 per cent of the revenue for the Canadian First Nation government. – _The oil sands development poses a threat to our traditional way of life. People are worried for their health and for the destruction of the land. Trapping lines and hunting is being ruined by construction and tailings ponds, but without the oil sands, this region would be economically depressed,_ says Boucher. Outside flows the Athabasca River. The ice just let go, and several flakes run freely down with the flow, while the Cree chief looks at the scene through his office window. – _This was once a bread basket for my people, but now there is hardly any fish in the river. We’re losing our land more and more for every day that passes,_ he says. – _But we don’t really have a choice. Either you participate in the regional economy, or you watch from the side line._