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Oil sands in Canada

Oil Sands in Canada

Canada’s Oil Sands

The oil sands in Canada contain huge oil reserves. The government calls it “ethical energy”, environmentalists protest.

The rhythmic drumming and shrill singing of the Indians lies over the lawn in front of the parliament in Ottawa. Some 1000 people have gathered to demonstrate against the expanding oil sands industry.¹

They are also trying to prevent the construction of a huge pipeline from Canada to the USA. “Our country will never be the same again,” says an Indian woman from northern Alberta. Her community suffered from a pipeline leak a few months ago. Maud Barlow, chairman of the Council of Canadians, calls oil from tar sands “the dirtiest oil in the world”.

The controversy over the extraction of oil from Canadian tar sands is growing louder. Environmental groups in the USA and Canada are working against it. The Canadian industry and government are promoting the “ethical oil”. This is supposed to make America less dependent on supplies from undemocratic states. In concrete terms, the dispute revolves around the construction of the Keystone Pipeline by the Canadian company Trans Canada. It leads from Alberta’s oil sands fields to the refineries on the US Gulf Coast. The US government wants to decide on the seven-billion-dollar project by the end of the year.

Canada is one of the oil-richest countries in the world. It has resources of 175 billion barrels of oil, which can be extracted with today’s technology.  One barrel is 159 litres. 170 billion barrels are found in oil sands, a mixture of viscous, tar-like bitumen, sand and clay.² Canada currently produces about 2.8 million barrels of crude oil per day, of which about 1.5 million are from oil sands. By 2025, oil production is projected to increase to 4.7 million barrels, of which 3.7 million barrels are oil sands.

Blessing or curse

The energy-hungry USA are already the main consumers of Canadian oil.³ The new underground pipeline is to be 2600 kilometres long. From 2013, up to 830,000 barrels of crude oil per day will flow through the 90-centimetre diameter pipe system. It starts in northern Canada and goes down to the Gulf of Mexico.

Advertising campaigns, calls for boycotts and demonstrations on the one hand, an advertising initiative by industry and the Canadian government on the other. With the expansion of the oil sands industry in northern Alberta, the bitter dispute over the source of energy is growing. Critics point to landscape destruction and toxic sludge ponds, the high water consumption, studies on health hazards for humans and animals and the enormous CO2 emissions.

For the industry and the conservative government under Prime Minister Stephen Harper, which likes to present its country as an energy superpower, oil sands are an indispensable source of oil. The criticism is based on fictions, not facts. Oil from Canada, a democratic country with strict environmental rules, is more ethical than oil from Saudi Arabia, for instance.

However, there are also economic objections. Analysts like Todd Hirsch of ATB Financial in Calgary point out that an oil price of about 80 dollars is necessary for new oil sand projects to be profitable.⁴ This is the range in which the price per barrel is currently moving. However, the economic outlook is anything but good. This could weigh on the oil price in the future and delay the expansion of oil sands mining.

Pros and Cons of Oil Sands

There are also supporters and critics of oil sands extraction in the USA. Hearings took place this week in the US states of Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas, through which the pipeline will pass. The final hearing will take place on 7 October in Washington. The US government’s decision on whether the pipeline is in the national interest and whether it should be built is expected in December. The approval on the Canadian side has already been obtained.

There is resistance to the pipeline, particularly from US Democrats, as Barack Obama has taken steps to turn the tide towards clean energy. Critics argue that the pipeline will make the USA more dependent on oil sands. And even in conservative Nebraska, there is protest. The pipeline touches the area where the Ogallala Aquifer is located, a huge groundwater reservoir. But after a preliminary assessment of the environmental impact by the US State Department of Energy’s Energy Division did not contain any fundamental objections to the project.

In view of the 20,000 jobs that TC Energy Corporation has announced that the pipeline construction would create in the US, it is considered likely that the US President will agree. For Canada’s Prime Minister Harper this is beyond question. “US energy needs are enormous and the alternatives for the US are not good,” says Harper. Nevertheless, he has sent his ambassador Gary Doer from Washington to the US province to promote the pipeline there.

Once the decision has been made, Canada’s government will be able to turn its attention to a second area of conflict: Europe. The government vehemently opposes the negative assessment of oil from oil sands in a planned EU fuel directive because of its environmental impact.

REFERENCES

¹ Anti-oilsands sit-in urged for Ottawa, https://www.cbc.ca/news/politics/anti-oilsands-sit-in-urged-for-ottawa-1.1084426

² Oil and its geography, https://atalayar.com/en/content/oil-and-its-geography

³ Crude oil facts, https://www.nrcan.gc.ca/science-data/data-analysis/energy-data-analysis/energy-facts/crude-oil-facts/20064

⁴ The worst of the oil price downturn is over, says ATB, https://www.cbc.ca/news/canada/calgary/atb-hirsch-downturn-over-1.3832569

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