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What Happens in Canada Doesn’t Stay in Canada

Tar Sands Debate Has Implications for the United States

SOURCE: AP/Jeff McIntosh

In this 2005 file photo, mining trucks carry loads of tar sands after being loaded by huge shovels at the Albian Sands project in Ft. McMurray, Alberta, Canada. How the tar sands debate plays out in Canada has significant implications for the United States.

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Canada and its tar sands industry are working feverishly to put a fresh face on an energy development process that has long exacted a heavy toll on the environment. As makeovers go, it’s a heavy lift.

For a first-time visitor to Canada’s tar sands developments in the vast boreal forest of northeastern Alberta, the overwhelming impression is the huge scale of the enterprise. From the size of the energy resource, to the acreage ripped up in strip mining the ore, to the $5 million trucks (one 13-foot tire: $60,000) that stand 24 feet high and can carry loads of 400 tons, to the sprawling factories that separate out the gooey tar-like bitumen from the soil and upgrade it to synthetic oil, to the tailings ponds containing leftover slurry, to the energy demands for processing, and finally to the global warming pollution the industry emits—everything here is big.

Also big is a lobbying and public relations campaign by the tar sands industry in concert with the governments of Canada and Alberta to reframe the debate over an often-vilified energy source that is frequently referred to by critics as tar sands. The stakes are huge in a world where battling climate change and harnessing renewable energy is increasingly seen as an imperative and where U.S. states—a key market for Canadian energy—are moving to develop low-carbon fuel standards for the transportation sector.

And while many in the United States may think that what happens in Canada largely stays in Canada, the truth is that similar unconventional oil development is possible in the western United States. Pilot research and development projects to exploit vast underground oil shale reserves on federal land in Colorado, Utah, and Wyoming have been underway for several years—the latest iteration of the oil industry’s dream to develop what the Department of Energy estimates is 2 trillion barrels of oil locked up in shale rock. Methods to access that oil are similar to those used in tar sands.

First developed by Suncor Energy (then Great Canadian Oilsands Company) in the mid-1960s, tar sands have developed into a mature and important source of petroleum—to both Canada and the United States. Canada ranks second to Saudi Arabia as a global oil power with 176 billion barrels of reserves—the vast majority of it in oil shale. It is also by far the largest oil supplier for the United States, sending 2.5 million barrels a day south across the border.

“The linkage to the United States is fundamental,” said Suncor Energy Vice President for Sustainability Gord Lambert during a briefing for several dozen energy and economic development specialists from U.S. western states on a recent fact-finding tour sponsored by Canada’s national and provincial governments. The Center for American Progress was invited to join the tour.

Trips like ours are part of a broad effort by Canada to spread more benign messages about tar sands: that new technologies are reducing the environmental impacts of developing the resource, that Alberta has emerged as a world leader in cutting emissions of climate-changing pollutants, and that states in the American West and Midwest that are the biggest consumers of Alberta oil have a big financial stake and should think carefully about low-carbon fuel standards that could restrict imports of oil from the north.

An article last month in ClimateWire explained that nearly 20 states are considering such standards, and a top official from Canada’s embassy in Washington, D.C. has been on the road visiting governors reminding them that companies and jobs in their states thrive by supplying the tar sands industry with everything, from truck tires to pipe.

Alberta’s tar sands industry is centered near Fort McMurray, a northeastern Alberta city of about 65,000 people that sprung to life in the boreal forest where the Athabasca and Clearwater rivers merge. It’s a classic energy boom town where just two years ago one of our tour guides paid $465,000 (Canadian dollars) for a singlewide trailer home.

While incredibly abundant here, the bitumen—a viscous form of petroleum mixed with sand, clay, and water—is not easy to access. Deposits are 200 to 250 feet thick but lie between 100 and 150 feet below the surface. The ore is traditionally extracted by removing the overburden and strip mining, and it then is loaded onto trucks, crushed, and mixed with water—it takes two to four barrels of water for every barrel of bitumen—to form a slurry. A separation process releases the bitumen from the sand and clay and sends it to upgrading facilities. The slurry is deposited in huge tailings ponds where solidification prior to land reclamation can take 30 years.

It’s a messy, energy-intensive process. And strip mining has its limits—it can reach only about 20 percent of the ore. The rest is too deep. So the industry says it will be increasingly turning to in situ—in place, underground—development. Wells are drilled up to 250 meters deep and high-temperature steam is pumped in along a horizontal axis for hundreds of meters, melting the bitumen, which is then pumped to the surface. Recovery rates approach 70 percent versus as little as 5 percent for strip mining. There’s also a much smaller footprint on the land, no tailings ponds, and thus quicker recovery.

“With in situ it takes us from 30 years of recovery to three weeks,” says Lambert. “We never want to do another tailings pond.”

The Pembina Institute, a Canadian nonprofit think tank that focuses on sustainable energy, is less enthusiastic about the in situ process. In a report card issued last month on nine operating in situ facilities, Pembina concluded, “there is significant room to increase the environmental performance” of projects using the technique. The institute reported that on average these new projects using in situ technology “have higher greenhouse gas and sulfur dioxide emissions intensities than mining.”

Provincial government officials in Alberta—which has 10 percent of Canada’s population but emits 40 percent of the country’s global warming pollution—eagerly tout the province’s recent efforts on climate change. Their first climate change action plan dates to 2001, followed up with legislation in 2003, and a detailed strategy in 2008 for reducing projected emissions in 2050 by half or 200 million tons. Nearly 70 percent of that cut would come from carbon capture and storage, a big bet on a technology still in its infancy.

The province’s “cap and allowance” system covers large polluters above 100,000 tons of greenhouse gases per year who must meet reduction targets or pay $15 per excess ton into a clean energy technology fund or purchase in-province offset credits. The fund, now at $125 million, supports clean energy, efficiency, and carbon capture-and-storage projects.

Here again the Pembina Institute is underwhelmed, as detailed in its 2009 report “Clearing the Air on Oil Sands Myths” (tar sands to its critics). The directive to cut emissions by 50 percent by 2050 is from a business-as-usual baseline, notes the report, so the actual cut from 2005 levels would be by just 14 percent, and in the medium term Alberta’s emissions would be 20 percent above 2005 levels in 2020.

Further, unlike international climate change reduction directives that use 1990 levels as a baseline, Alberta uses 2005, which would allow emissions 16 percent above 1990 levels. Tar sands production, the institute argues, “is approximately three times more GHG-intensive than Canadian conventional oil production…”

In response to government officials who point out that Alberta tar sands represent just 5 percent of Canada’s global warming pollution and one-tenth of 1 percent of the world’s, Pembina notes projections by the national environmental ministry that the tar sands industry’s national share will rise to 12 percent in 2020, representing nearly half of the emissions growth between 2006 and 2020. Alberta’s heavy reliance on carbon capture and storage to meet its targets, Pembina says, would require a much higher price on carbon and large investments and technological breakthroughs as yet not supported by government policies.

Even the Alberta government’s own one-year report card is less than stellar on the province’s overall goal of reducing the environmental impacts of tar sands development, which was outlined in its 2009 report, “Responsible Actions: A Plan for Alberta’s Oil Sands.” “Just two of the province’s short-term goals, to be completed by 2012, have been completed,” according to the Calgary Herald, and no progress has been made in reducing greenhouse gas emissions.

How the tar sands debate plays out in Canada has significant implications for the United States. Not only does our reliance on heavy oil from Canada make it harder to reach climate pollution reduction goals, says Liz Barratt-Brown, a senior attorney with the Natural Resources Defense Council, but Canada’s experience might be a preview if our own oil shale resources are developed.

“There’s a lot of analogies here,” Barratt-Brown says. “What happens in Canada is not just Canada’s business. It’s ours.”

Tom Kenworthy is a Senior Fellow at the Center for American Progress.

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