DUST IN THE WIND - ALBERTA'S ENVIRONMENTAL POLICIES
The industry claims that total restoration of the original
forest is possible, but it’s difficult to see how a complex
ecosystem, adapted to harsh, cold growing conditions,
can be replaced. David Schindler, Professor of Ecology at
the University of Alberta, compares the reclaimed land to
“a golf course where the lawn mower is broken — a hard
land with a little pond at the bottom.” According to
Schindler, only about two percent of the wetland areas
have been reclaimed. “Right now the big pressure is to get
that money out of the ground, not to reclaim the landscape.
I wouldn’t be surprised if you could see these pits
from a satellite 1,000 years from now.”
Do you really believe that when the oil is gone, the oil company's are going to honor their commitment. If you really need to see a history of the oil business enviromental record, go here.
The development of Canada's oil sands is laying waste to its great northern forest and western plains, say critics who point to skyrocketing greenhouse gas emissions, diverted rivers and razed backwoods. And the devastation can only get worse, they say, as energy companies pump billions of dollars into new projects to triple local oil production to some 3.0 million barrels per day within the next decade.
The Athabasca, Peace River and Cold Lake Oil Sands, at an estimated 173 billion barrels, rank second behind Saudi Arabia in petroleum resources.
But due to high extraction costs, the deposits were long neglected except by local companies.
While conventional crude oil is pumped from the ground, oil sands must be mined and bitumen separated from the sand and water, then upgraded and refined.
Since 2000, skyrocketing crude oil prices (now at about 70 dollars a barrel) and improved extraction methods have made it more economical to exploit the sands, and lured several international oil companies to mine the sands.
Open pits now dot the northern part of Alberta province where vast tracts of the Boreal Forest once stood, and giant mechanical shovels now devour black oil-encrusted soil day and night.
In an article in the June 2006 issue of Rolling Stone magazine, former US presidential candidate Al Gore offered a scathing sketch of the oil sands industry as wasteful and a blight on Canada.
"For every barrel of oil they extract there, they have to use enough natural gas to heat a family's home for four days," Gore told the magazine.
"And they have to tear up four tonnes of landscape, all for one barrel of oil. It is truly nuts," he said, urging Americans, who are the main buyers of Canadian oil, to break their addiction to oil.
For Canada, which has stepped back from its 1997 Kyoto Protocol commitment to reduce carbon dioxide emissions to 6.0 percent below 1990 levels by 2012, the oil sands boom is a mixed blessing.
It creates wealth and jobs, but the industry is already Canada's worst polluter and is bound to double its harmful CO2 emissions by 2015, now at 29 megatonnes annually, according to a government environmental audit.
"It's almost impossible for us to reduce our greenhouse gas emissions if we want to boost production from 2,000 to 250,000 barrels within a decade," said Michael Borrell, president of Total Canada, a scion of the French oil behemoth Total SA.
The government has proposed a 20 percent reduction in the "intensity" of the sector's CO2 emissions, but total emissions would still rise as oil production billows.
The boom is also prompting fears of local water shortages and declining water quality as oil companies drain 349 million cubic meters of water from the Athabasca River each year for use in oil production, then dump it into area tailing ponds.
A report by the Sage Centre and the World Wildlife Fund (WWF) on global warming said Alberta would have to curtail new oil sands projects, which now use 2.0 to 4.5 barrels of water and large amounts of energy to produce one barrel of oil, if warming persists.
The WWF called for no new water-taking permits for energy companies, noting water flows in the Athabasca River, down 20 percent since 1958, could diminish by another seven to 10 percent if temperatures continue to rise.
"Climate change (is) an issue because the flow in the Athabasca River has constantly been dropping and as the glaciers (that feed the river) disappear in Jasper National Park, it's gonna get worse," said Simon Dyer of the Pembina Institute, an environmental group.
"Those people they just don't care about the environment," said Terry, a young aboriginal in Fort McKay in the heart of the oil sands. "Some people fish (in the Athabasca River) for fun ... but nobody should eat the fish around here."
Higher than average cancer rates at the nearby Fort Chipewyan Indian Reserve were recently linked to oil industry contamination of the environment, said reports.
Alberta law requires oil companies to restore excavated lands, but out of some 44,000 square kilometers (17,000 square miles) leased to them since 1967, "not a single square meter (foot) of land has been reclaimed," Dyer lamented.
earlier related report
Canadian Govt Clashes With Senate Over Kyoto Protocol
Ottawa (AFP) June 22 - Canada's Prime Minister Stephen Harper vowed Friday to ignore measures that would harm the economy after the Senate passed a private member's bill to force his government to meet its Kyoto Protocol duty. "Obviously this government isn't going to implement any measures that would do severe damage to Canadian jobs or to the Canadian economy," Harper told reporters at the close of the spring parliamentary session.
"We will continue implementing our (own) national system of regulations."
The act, passed by the Liberal-dominated Senate 53-20, requires Canada to "meet its global climate change obligations under the Kyoto Protocol."
But Harper's Conservative government has repeatedly said the greenhouse gas emissions cuts required under the international pact are unattainable.
A previous Liberal administration had agreed under the Kyoto Protocol to reduce CO2 emissions to 6.0 percent below 1990 levels by 2012, but a 2006 government environmental audit found emissions had instead increased by 35 percent.
In April, the government unveiled a plan to cut Canada's CO2 emissions linked to global warming by 20 percent by 2020, based on 2006 levels, and by up to 70 percent by 2050.
The outcome of the Senate vote is both controversial and problematic for Harper's minority government because it could find itself unwittingly breaking the law, said Liberal senators.
Harper countered: "The (Speaker of the) House ruled that this is not a money bill. Frankly, there are pretty strict constitutional limitations in what someone can achieve with a bill that is not a money bill. The bill cannot impose billions of dollars of costs upon the government or the Canadian economy."
ADDITIONAL INPUT
The oil industry, rather like mining, is a mucky business. Its activities - and ours in consuming products such as petrol and plastics - directly contribute to global warming. It would be fair to say then, that ethical investors have hardly been fans of the industry.
But in recent years there has been a grudging acceptance that - like it or not - the world will remain dependent on oil for a long time, even as we try to move towards a low-carbon economy.
All but the most diehard of environmentalists now accept that oil companies serve a necessary, if undesirable, purpose.
But the critique of business-as-usual is gathering force, thanks in large part to the hugely expensive, dirty and carbon-intensive oil sands projects. Most of the world's oil sands are located in Alberta, in northern Canada, giving the country estimated reserves of a staggering 179 billion barrels, second only to Saudi Arabia.
Currently, Canada's oil sands produce just over a million barrels a day but planned projects would triple this by 2020. If companies expand at the rate they say they will, the country could become one of the largest oil producers in the world.
With concerns over energy security rising, the prospect of a stable non-Opec OECD country such as Canada becoming a big oil producer is attractive to many in the West.
There are a dozen or so companies operating oil sands projects in Canada, including Shell, ConocoPhillips, Exxon and Total. A year ago BP entered into a joint venture with the US firm Husky Energy which is scheduled to start producing oil in 2012.
Carbon-intensive
Conventional oil production involves drilling into rock to find reservoirs of the black stuff sloshing around. Because the oil is in liquid form, it's relatively easy to force to the surface. However, extraction from oil sands is more difficult, and results in a much larger carbon footprint.
Most existing oil sands projects have more in common with mining than conventional oil production. The forest is cleared, and vast pits are dug out of the clay and sand to get to the oil below. Hot water is pumped into the oily sludge to separate the oil from the sand and clay. Even then, the untreated oil is in the form of thick bitumen, with a consistency of peanut butter.
Huge upgraders are needed to treat it before it can be transported by pipeline and refined conventionally.
Analysts estimate that the resulting carbon emissions are between 2.5 and eight times higher than emissions from conventional oil production.
Canadian environmental organisation the Pembina Institute estimates that by 2030 the emissions produced by Canadian oil sands projects could total more than a quarter of the UK's current emissions.
Environmental impact
But the environmental problems aren't restricted to carbon emissions and deforestation, serious though they are. Oil sands consume vast amounts of water, which in northern Alberta are drawn from the Athabasca river.
The industry insists that flow rates in the river are only affected slightly by the process, but many local leaders disagree.
Oil sands projects also leave behind all the by-products of the mining process: clay, sand, the recycled water used to separate the oil and the toxic chemicals used in the process. These are pumped into vast, toxic 'tailings ponds'.
According to the Pembina Institute, there are about 5.5 billion cubic metres of these tailings ponds in Canada, some as big as 13 square kilometres and visible from space.
There are concerns that these ponds will leak into the water table, polluting rivers and wildlife. More worryingly, there do not seem to be clear plans about how to treat them.
All these issues - carbon emissions, deforestation and pollution - represent serious long-term environmental and reputational liabilities for the companies involved. Ethical investors take note.
Economics of oil sands
As recently as the summer, the frenzy to develop Canada's oil sands was in full swing. Soaring costs for everything from property in Fort McMurray, the nearest town to the projects, to labour, reflected the oil rush. But that was when oil prices were $147 a barrel. Today, they are less than half that peak and companies including Shell are scaling back their expansion plans.
The problem is economics. According to Goldman Sachs, oil sands developers need oil prices to be at least $70 a barrel to make a decent return.
Royal Dutch Shell and BP
Shell currently produces about 150,000 barrels of day - 5 per cent of its total production - from oil sands. This will soon rise by 100,000 and by 2020, it wants to get 15 per cent of its oil from these projects by 2020.
A fortnight ago Shell chief executive Jeroen van der Veer said he was delaying plans to add an extra 100,000 barrels per day from oil sands, but before ethical investors rejoice, no one is expecting prices to stay this low for long. Sooner or later, oil sands will become profitable once again.
And with a third of Shell's potential reserves made up of undeveloped oil sands, the company is unlikely to turn its back on Alberta in a hurry.
In 1999, Lord Browne, who was then running BP, decided to sell off the company's oil sands interests in Alberta, believing that the projects were too expensive.
Despite the recent slump in oil prices, BP's new-found enthusiasm for oil signs shows no signs of abating.
Making oil sands 'greener'
Oil sands projects vary vastly in terms of how much carbon they produce. According to research firm Trucost, Shell's Muskeg River Mine project in Alberta is less carbon intensive than BP's conventional exploration and production projects.
The industry and government are promoting carbon capture and storage technology, which stores emissions from power plants underground, as a way of making the projects greener.
However, the unproven and uneconomic technology, even if it works and attracts the financial support that is required, is at least a decade away from deployment.
Companies have also promised that once their operations have ceased, they will remediate the affected land so that it resembles its original state.
But local leaders say it is impossible to properly repair the land, which includes boreal forests and peat bogs.
What investors should do
The Canadian and Albertan governments have a poor record on reducing their emissions. Environmental regulations governing the oil sands projects do not require absolute cuts in carbon, for example. Ethical investors should not rely on the authorities to force oil companies to clean up their act. Transparency on their environmental performance also needs to be improved.
This year Co-operative Asset Management launched a campaign to try to persuade oil sands companies to delay their investment plans until they have proved that oil sands and ecologically and financially sustainable.
The recent slump in the oil price - for as long as it lasts - has won them a reprieve.
Oil Sands are deposits of bitumen, a molasses-like viscous oil that will not flow unless heated or diluted with lighter hydrocarbons.
How the Japanese export deforestation to
Australia.
