Oil sands and devastation

0 Comments | Deseret News (Salt Lake City), Sep 28, 2008 | by Rob Gillies Associated Press

FORT MCMURRAY, Alberta -- The largest dump truck in the world is parked under a massive mechanical shovel waiting to transport 400 tons of oily sand at an open pit mine in the northern reaches of Alberta.

Each Caterpillar 797B heavy hauler -- three-stories high, with tires twice as tall as the average man -- carries the equivalent of 200 barrels of heavy oil worth about $23,000 per haul at today's prices.

"It's like sitting on your back porch and driving your house," said Todd Dahlman, the manager of Shell Canada's Muskeg River open- pit oil sands mine in Alberta's Athabasca region.

Shell, which has 35 of the massive loaders working 24 hours a day, seven days a week, has ordered 16 more -- at $5 million each -- as it expands its open-pit mines. And it is not alone among major oil companies rushing to exploit Alberta's oil sands, which make Canada one of the few countries that can significantly ramp up oil production amid the decline in conventional reserves.

Shell, Exxon-Mobil, Chevron, Canada's Imperial and other companies plan to strip an area here the size of New York state that could yield as much as 175 billion barrels of oil. Daily production of 1.2 million barrels from the oil sands is expected to nearly triple to 3.5 million barrels in 2020. Overall, Alberta has more oil than Venezuela, Russia or Iran. Only Saudi Arabia has more.

Oil companies also want to tap into Utah's oil-shale and oil- sands resources. The U.S. House of Representatives, responding to growing public demand for more domestic energy, voted Wednesday to end a quarter-century ban on oil and natural-gas drilling off the Pacific and Atlantic coasts -- and a more recent ban on developing oil shale in Utah, Wyoming and Colorado.

The three Western states may have up to 1.8 trillion barrels of oil trapped in oil shale, by some estimates. Environmental groups strongly opposed lifting a moratorium on issuing final rules to allow leases for development, saying it will threaten wild areas, use huge amounts of scarce water and increase global warming. Many critics of developing Utah's oil shale and sands have pointed to the devastation in Canada.

High prices are fueling Alberta's oil boom. Since it's costly to extract oil from the sands, using the process on a widespread basis began to make sense only when crude prices started skyrocketing earlier this century.

But the enormous amount of energy and water needed in the extraction process has raised fears among scientists, environmentalists and officials in an aboriginal town 170 miles downstream from Fort McMurray. The critics say the growing operations by major oil companies will increase greenhouse-gas emissions and threaten Alberta's rivers and forests.

"Their projected rates of expansion are so fast that we don't have a hope in hell of reducing greenhouse-gas emissions," said Dr. David Schindler, an environmental scientist at the University of Alberta.

Oil-sands operations, including extraction and processing, are responsible for 4 percent of Canada's greenhouse-gas emissions, and that's expected to triple to 12 percent by 2020. Oil-sand mining is Canada's fastest growing source of greenhouse gases and is one reason it reneged on its Kyoto Protocol commitments. Experts say producing a barrel of oil from sands results in emissions three times greater than a conventional barrel of oil.

Worries about environmental damage have gotten enough attention that even the oil industry realizes it must tread softly on the issue. "Industry has to improve its environmental performance," Brian Maynard, a vice president of the Canadian Association of Petroleum Producers, said recently.

Dave Collyer, Shell's chairman in Canada, said world demand means oil companies must exploit unconventional sources of energy.

"You have to consider the environmental impact in a broader context," Collyer said. "There is significant economic benefit from the development of oil sands. The oil sands represent a very secure, reliable, long-term source of supply to the United States. People in the U.S. will have to judge whether that supply stacks up to other alternatives."

The oil industry's Maynard also said companies would be able to develop techniques to protect the environment in the same way they made the process of oil-sands extraction commercially viable over the past 20 years. "It will take time," he added.

But David Suzuki, Canada's most prominent environmentalist, cautioned against accepting the argument that the oil industry would develop safer techniques such as carbon-capture storage, noting that the time and money needed to determine such methods could not be predicted.

"They say, 'No, no we're going to do research and really clean up our act.' Well, you can't give these guys permission to go ahead on the promise that something is going to happen in the future," Suzuki said.

He and other critics warn the environmental ramifications are too dire to ramp up oil-sands production. They argue that Canada's boreal forest, one of the largest intact ecosystems in the world, is being torn up to make way for the mines.