Sunday, February 20, 2011

Alberta's Oil Sands: A Primer On the Industry and its Impact

I, an Albertan, have a front-row seat to an energy battle that is rapidly reaching epic proportions. During the past year, international interest in the oil sands has exploded and not in a good way. Canada, and specifically Alberta's Oil Sands, did not come out looking very good in both local and international media at the last International Climate Conference in Copenhagen. A media campaign called ReThink Alberta, launched last summer by Corporate Ethics International, an American organization, depicts Northern Alberta's transformation from a beautiful wildlife sanctuary into a dirty wildlife-killing wasteland. You can see the associated video as well as Alberta Environment minister Rob Renner's response here. This group also posted giant billboards of dying birds soaked in oil in many major American cities.

To try to neutralize these horrific images, our premier, Ed Stelmach, launched a political junket in Washington, encouraging Americans in power to realize that our bitumen is there for the offer as an environmentally safe source of energy from a politically friendly neighbour. The BP offshore oil disaster had recently occurred and this helped Alberta sell the oil sands as a safer alternative, but it also brought into focus the general danger of the world relying on oil for energy. Alberta is mired in controversy over our oil sands industry. It is blamed for both global warming and local pollution. Recent deaths of hundreds of migratory birds that landed on poisonous tailings ponds circulated in the media and led several local politicians and environmental protection groups around the world to question how effectively the industry protects wildlife. Some independent researchers are now making it their mission to study the effects of the industry on the ecosystem as well as on the people that live nearby. A Nature of Things Special TV presentation called Tipping point: The Age of the Oil Sands (watch the entire episode here), hosted by scientist and environmental activist, David Suzuki, brought these concerns into focus. Meanwhile the Alberta government has launched a series of advertisement campaigns both in Alberta and internationally to promote efforts made by the oil sands industry to reduce its environmental impact. The oil sands industry is expected to triple by 2015.

Albertans are growing more polarized in their opinions about the oil sands. We are becoming mired down in a media/public relations storm of opinions and pseudofacts at a critical time when we need to, and still have a window of opportunity to, influence the industry's fate: We can

1) embrace the industry wholeheartedly or
2) accept the industry conditionally with strict environmental protection measures in place or
3) pressure the industry to stop the expansion or
4) shut it down entirely.

By "we" I mean the Canadian government, the only body that has the jurisdiction to enforce restrictions, in response to our public pressure (and perhaps the Alberta government as well).

A middle road could be envisioned where the Canadian government and public pressure compel the industry into placing its expansion efforts on hold while it takes an intermediate step of finding and incorporating new technologies that reduce its environmental damage to a level that is agreeable to all parties, including the Albertan public and specifically the people living nearby and downstream of the Athabasca river, who are most affected by the industry, as well as international environmental groups and all levels of government. This step would require a unprecedented level of transparency, coordination of information sharing and cooperation from the industry and the industry must assume the risk that if no acceptable technologies can be found that will mitigate the environmental damage, for example if the tailings ponds cannot be fully reclaimed in a reasonable time period or if the stress on the fresh water systems cannot be reduced to an acceptable limit, then the industry will suffer a severe setback. However, if the industry successfully embraces the environmental challenges brought forth and works hard toward transparency and cooperation then both the public and investors can hail the industry for its forward-thinking and environmentally responsible reputation. There may be a way for the world to use the enormous reserve of oil sands energy for many years to come as we gradually wean ourselves from nonrenewable energy. The expense of oil sands oil, made higher because the environmental technology must be added to the cost, might help drive that ultimate transition. I urge you to keep these possibilities in mind as we explore the details and to determine for yourself which response is the best fit. Or perhaps you will have your own solution not addressed here.

First, both the public and the government (and company shareholders!) need to be properly informed about the science of the oil sands and the science of the environmental mitigation technologies that could be used, such as carbon capture technology, for example.

The Need for Energy

We in the industrialized world have become accustomed to a very high standard of living that consumes a great deal of energy, and countries like India and China, with far greater populations, are quickly evolving toward a similar standard. I, a typical Canadian, consume the energy equivalent of about 8200 kg of oil per year. That's close to about 10 barrels of sweet crude oil. If I multiply that by 34 million people in Canada, we as a country consume 340 million barrels of oil per year personally. We have to add industry and public consumption to this figure so we arrive at a total Canadian consumption of 730 million barrels of oil per year (using 2009 numbers). Alberta has total bitumen-based oil reserves in excess of 170 billion barrels, the second largest reserve in the world after Saudi Arabia, with a current production of over 1 million barrels of oil per day from bitumen reserves.

In reality we don't consume just oil for energy. In Canada, only about 32% of our energy comes from oil. A quarter each comes from natural gas and hydroelectric power, 10% comes from coal and the rest, 8%, comes from nuclear and renewable sources. Click here to see how Canada energy usage compares to the rest of the world. Unlike many other countries, particularly Germany, biofuels, wind and solar energy, are only used marginally in Canada, so far.  However, even countries serious about greening up like Germany have a long way to go to wean themselves from fossil fuels such as oil, coal and natural gas. Renewables account for 6% of Germany's total energy consumption compared to 1% here in Canada.

What Is Wrong with Fossil Fuels?

Fossil fuels provided the energy that made the industrial revolution possible, from coal-fueled steam turbines to the combustion engine. We would not be where we are today without them. But fossil fuels come with problems. They are a finite nonrenewable resource. The earth has only so much stored energy deposited in ancient reservoirs. Perhaps an even more urgent problem with these fuels is that they, as a result of their extraction and refinement as well as eventual combustion, release pollutants into the ecosystem, damaging it and creating health concerns for us. Most importantly of all, fossil fuels are strongly linked to global warming, a global threat not only to our survival but to the survival of all species. This will be discussed in more detail shortly.

The bitumen extracted from the oil sands in northern Alberta is a fossil fuel and it comes with these problems. And, as we will soon explore, bitumen has additional environmental hurdles to overcome as well.

How Do The Oil Sands Stack Up As a Sustainable Energy Source?

With an eye to making a significant shift toward sustainability, we can view the oil sands from a perspective that enables us to question its role in our future energy, rather than blindly accepting this familiar argument:

1) Our society is in danger of collapsing as the world runs out of energy.
2) The world is running out of energy and some of that energy must come from oil.
3) All remaining oil reserves including the oil sands must be exploited.

Can bitumen from the oil sands be incorporated into an energy mix that is sustainable from a long-term perspective?

What Bitumen Is

Bitumen is a naturally occurring mixture of heavy hydrocarbons. Like oil, it was created under great heat and pressure over millions of years from the biomass of ancient algae and other living organisms that once thrived during the cretaceous period, about 70 million years ago. It is, in fact, oil that is in the process of escaping to the Earth's surface and in that process it has been exposed to, and partly degraded by, bacteria.

From Bitumen to Synthetic Oil

The shorter hydrocarbon chains of bitumen were destroyed first as they were exposed to surface bacteria and what remains is a sticky black semisolid that consists of large highly branched hydrocarbon molecules which must be cracked, or broken, into smaller hydrocarbon molecules and then refined into usable synthetic crude oil, which I will refer to as syncrude in this article. Northern Alberta's bitumen, along with substantial natural gas deposits, resides in the Upper Devonian Grosmont formation. This deposit contains an estimated 50 billion cubic metres of heavy crude bitumen.

Bitumen, like all energy sources, can ultimately be traced back to energy from the Sun. During photosynthesis, algae and other plants trap light energy in chemical bonds where it is stored. When ancient plants died, their biomass was slowly converted into crude oil, natural gas and coal, depending on which conditions and geologic processes they underwent. These fossilized organic hydrocarbons contain energy stored in their carbon bonds. When they are burned, a combustion reaction takes place. The carbon bonds are destroyed, releasing water, carbon dioxide and energy. This is where the concern over global warming comes in.

Carbon Dioxide and Global Warming

Carbon in the form of atmospheric carbon dioxide acts as a thermal blanket over the Earth, trapping heat from the Sun inside the atmosphere and warming the planet. There is naturally a certain level of this so-called greenhouse gas and while it has varied naturally over the eons, it tends toward a state of equilibrium in which it varies little over thousands of years. If atmospheric carbon dioxide rises rapidly, however, as it has over the past decade, it not only puts tremendous strain on ecosystems, strains that could lead to potential mass extinctions of species because they cannot adapt fast enough to survive and reproduce, but it rapidly changes the chemistry of the oceans as well, causing, among other things, coral reefs and shellfish shells to dissolve, species which are important ecological anchors to the entire ocean ecosystem. On top of this, vast oceanic ice shelves in Antarctica and terrestrial glaciers all over the world are melting quickly and contributing to rising sea levels. This is already beginning to threaten coastal cities and development around the world. Finally, global warming is destroying the glaciers on which many populations, including ours here in Alberta, rely for fresh water, and contributing to increased drought and flood stress on agriculture around the world. The relationship between carbon dioxide and global warming is explored in depth in my article, "Earth's Atmosphere Part 8 – How To Care For Earth's Atmosphere."

Synthetic petroleum production from bitumen mining is a carbon-positive industry. A great deal of carbon that was once chemically bound up is released into the atmosphere. In order to slow down global warming or perhaps eventually stop it altogether, we need to reduce the world's carbon footprint to zero. Unfortunately, carbon dioxide emissions continue to increase globally. Even if we stopped emitting greenhouse gases today, future climate change is inevitable and we ourselves, will face challenges to our way of life to which we will have to adapt. Ever-increasing worldwide greenhouse gas emissions could lead to run-way global warming, a catastrophic series of possible future scenarios based on climate modeling. It remains a controversial idea despite support by a large consensus of climate researchers.

In an article written for Scientific American in 1998 by Richard George, CEO and director of Suncor Energy Inc., the process by which bitumen is mined and processed into syncrude is introduced. The article also provides an interesting pre-media-storm history of the oil sands that helps to put the industry into perspective. Bitumen must be strip mined, extracted from its sandy aggregate, upgraded into syncrude, and then shipped to refineries which turn it into usable fuels, all of which require energy, much of which comes from natural gas in Alberta. All of this adds to bitumen's carbon footprint, which I have found very difficult to pin down in my research. According to a study referenced in Wikipedia, the bitumen to liquid fuel process generates about 3 times the amount of greenhouse gases per barrel as the production of crude oil, 86 kg CO2 per barrel of oil compared to 29 kg CO2 per barrel, respectively. Alberta's oil sands are becoming Canada's fastest growing source of carbon dioxide emissions according to the World Wildlife Foundation and the Pembina Institute, which give the oil sands a failing grade because the Canadian government has not yet regulated its carbon emissions with any absolute targets.

Future Plans for The Oil Sands

Canadian bitumen is upgraded into syncrude, which can then be refined into gasoline (usually about 50% goes into this), diesel fuel, jet fuel, heating oil and kerosene. Much of the syncrude will ultimately be destined for refineries in the Midwest and the Texas Gulf, which are currently being retrofitted, an investment of $20 billion, to turn syncrude into fuel. Alberta has several upgraders northeast of Edmonton with plans to install a new one, at a cost of $5 billion, with the capacity to process diesel fuel and talks are underway for a future $5 billion refinery in Alberta so that more profits can be kept at home. A $5.5 billion new pipeline is also being considered, called the Northern Gateway Pipeline. Syncrude would be piped to Kitimat, British Columbia where it would be shipped to large and rapidly growing Pacific Rim markets. The proposaI is facing tremendous opposition from First Nations people who own the land it would traverse as well as environmental groups.

A From-Bitumen-to-Cars Business

These future plans are not without controversy. The United States has about 250 million cars on its roads, most of which run on gasoline, and China currently has almost 200 million cars on the road, a number that is rapidly increasing. Until alternatives like electric cars or fuel cell cars are embraced in significant numbers by major car manufacturers and the public, worldwide demand for syncrude will continue to increase, enough to make the planned tripling of operations here in Alberta economically feasible. Business is essentially an amoral operation. Owners and investors understandably place customer and shareholder satisfaction as their bottom line in a free market society like ours. Inadequate limits placed on the industry by both levels of government here as well as a lack of Canadian will to adhere to the international limits of CO2 emissions of the Kyoto protocol and a lack of cooperation by both Canada and the United States with the Copenhagen Climate Council makes me wonder if the Canadian government is taking too much luxury maintaining a laissez faire attitude toward the oil sands industry. As we reap the financial rewards will we be leading the world to environmental disaster? We must remember that we as consumers are complicit in the business of oil.

Efforts to Mitigate Environmental Damage

The oil sands industry in Alberta represents an enormous financial investment, estimated at about $140 billion from 1997 to 2010, made by many international companies as well as the Alberta government. If they were shut down tomorrow, the companies as well as Alberta's, and Canada's economies would be seriously affected. Even so, a few Canadian politicians are beginning to publicly ponder shutting down the oil sands.

Sufficient public pressure might influence the oil companies to invest in and implement environmental controls, and that is already beginning to happen.

Carbon Capture and Storage Plan

The Alberta government just announced that it will go ahead with a carbon capture and storage plan, a $2 billion investment. While this technology could significantly reduce CO2 emissions it will not eliminate them. It will be difficult to implement the technology in a complex system with multiple CO2 emission points and the technology itself is unproven. Carbon capture and storage has become a public relations necessity for the oil sands in an effort to clean up its "dirty oil" image. The federal and provincial governments strongly support the implementation while environmental groups question its actual effectiveness. This technology doesn't address the pollution attributed to the end-stage burning of the fuels. For example, new technologies, traffic management and changes in car use must be explored and applied. In the meantime, it may take a great deal of time to determine the effectiveness of carbon capture technology.

Reclamation of Former Mines and Tailings Ponds

The oil sands are also engaged in reclamation of oil sands land. Syncrude Canada Ltd. has invested $100 million into this effort over the last five years. Gateway Hill, a reclaimed forest in the former west mine area just north of Fort McMurray was recently opened to the public and is the first to receive government reclamation certification.  How effective this reclamation was is a source of controversy. Reclamation of the industry's tailings ponds is also underway and, in fact, Suncor Energy Inc. recently celebrated its first reclamation of a tailings pond into 220 hectares of wetland. Environmentalists as well as First Nations people living downstream are not impressed however. Dr. Lee Foote, a wetlands specialist and an expert on land reclamation at the University of Alberta, questions whether the new wetland is a functioning ecosystem rather than simply an area that has been made to appear alive and green. Other environmental groups agree that it is too soon to call the site reclaimed. Meanwhile, Suncor has been charged with violating storm water management regulations and there is growing concern that chemicals such as toxic and carcinogenic naphthenic acids and heavy metals from old tailings ponds are leaking into the Athabasca river, the major water supply in the area, as well as local water aquifers. The Pembina Institute, an Alberta environmental watchdog, details what is known about which chemicals are in the tailings ponds as well as the enormity of the area the "ponds" entail. The companies involved in the oil sands industry must find ways to address this unacceptable hazard to both the people who rely on the water supply as well as the ecosystem. Last but not least, reports of the deaths of thousands (per annum) of migratory birds that land in the tailings ponds is seriously damaging the industry's reputation both here and abroad. The full impact on the various species involved, some of which are endangered, for example the whopping crane, is not yet known, nor is a workable solution yet available. Both Suncor and Syncrude have said that their deterrent systems were fully functional when migratory birds recently landed during a freezing rainstorm.

As the world's oil reserves dwindle and oil becomes more expensive, revenue from the oil sands will increase. The companies involved could go a long way toward satisfying a jittery public that they are not ruining the Earth by not only devoting more resources to environmental research but forming a cooperative relationship with independent researchers to allow renowned scientists like freshwater expert Dr. David Schindler, full access to the operations to run fully independent testing, and to hear and respond to the research findings in a fully transparent way. I hope for a solution to the oil sands problem that can reach a compromise between the public vilifying the industry and the industry shutting out the public. I think there is a danger of opposing sides digging in and creating a stagnant impasse that jeopardizes the problem-solving process so badly needed.

The business of the oil sands is impressive. A world-class conglomerate of cooperative companies is coming together to create what will be one of the greatest capitalistic enterprises in history. The industry is well aware that its customers are ultimately us, as we all increasingly consume the fuels refined from bitumen to support our industries and lifestyles. I leave it up to you to decide if it is time to venture into the great energy unknown and trade in your current gasoline-powered car for an electric or hydrogen fuel model, for example. Maybe you already have. I ask you where you think the oil sands industry should be heading. Do you agree with what is happening and, if not, do you think public pressure will succeed in forcing the industry to sufficiently green up or will it succeed only in eliciting superficial responses from the industry which ultimately will have little environmental impact and serve to further muddy the waters of information? Can the world afford to wait and see what the full environmental impact of decades of oil sands production and end-use of its products will be, before governments step up and impose restrictions?

The oil sands industry is on the verge of becoming the largest environmental gamble in history. 50 years from now will we be thankful for the affordable fuel we have had access to, secure knowing that the sky didn't fall after all? Will we look back with regret, living in a mortally wounded world and wondering why we didn't do anything to stop it? Will we look back from an entirely new perspective where the economy, industry, infrastructure and our lifestyles adapted to the end of the fossil fuel age?

Added Note:

I recently watched "Earth: The Operator's Manual," a 1-hour special on climate change and sustainable energy that explores in particular our reliance on oil, natural gas and coal and our alternatives, on PBS (premiered in April, 2011). This is is the most scientifically presented well-rounded treatment I've seen and I highly recommend you view it (click to watch the whole episode below) as you consider Earth's complex energy issues.

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