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Financial Times: Protest builds amid contamination fears

By Sheila McNulty in Fort McMurray
Published: November 9 2007 02:00 | Last updated: November 9 2007 02:00

In the past few years, as countries such as Venezuela and Russia have made it increasingly difficult and expensive for international oil companies to explore for, and produce, oil, the ExxonMobils and Royal Dutch Shells of the world have sought refuge in the politically stable oil sands of Canada.

Here there are vast pools of oil trapped deep in sand, from which it is expensive and time-consuming to extract. But there is so much of it. The tar sands represent the world’s biggest proven reserve outside Saudi Arabia.

So a growing number of companies are seeking leases for long-term access to one of the world’s last remaining massive fossil fuel finds. So far, 4,200 leases have been handed out, and more applications are arriving all the time.

“Maybe half of the remaining oil reserves in the free world might be in Canada,” says Barry Munro, managing partner for the Calgary office of Ernst & Young. “If you are an international oil company, can you afford to not be looking for investment possibilities?”

Shell, like most oil companies, does not think so. Demand for energy is rising, with some suggestions that it will double by 2050, says Roxanne Decyk, Shell’s director of corporate affairs. Yet access to easy oil is declining, as well. “We don’t see how we can avoid having oil sands play a role.”

At this point, adds Mark Nelson, Chevron’s Canada president: “Any energy source is important.”‘

Yet even as investment picks up, the environmentalist movement against oil sands is building.

Not only is the process highly carbon-intensive, but more immediately important for those on the ground are the findings of toxicity studies by Jeffrey Short, research chemist at the Auke Bay Laboratory in Alaska, and colleagues who studied the impact of the Exxon Valdez oil spill – considered one of the most devastating man-made environmental disasters ever to occur at sea – on marine life.

Data reported by the Canadian government and industry on water monitoring dating back to the mid-1990s reveal concentrations of toxic polycyclic aromatic hydrocarbons (PAH) in sediments in the Athabasca River have been increasing with tar sands developments, says Mr Short.

While some of these PAH are from natural sources, biochemical evidence indicates the tar sands mining is a big contributor.

Fish exposed to PAH produce an enzyme to clear the toxin from their systems, and samples from the river show that enzyme, cytochrome P450-1A, “shot up substantially” near mining sites. These studies also reveal liver lesions in tar sands fish that match those with PAH exposure, he says.

“There may be a contamination issue here that is unappreciated,” Mr Short says.

John O’Connor, a family medical doctor in the area since 1993, has for years raised questions about possible pollutants from oil sands after seeing an unusual number of serious illnesses in Fort Chipewyan, a community downriver from oil sands development.

Most significant were five incidents of cholangiocarcinoma among the 1,000 residents, when the illness is so rare it is usually seen in no more than one in 100,000 people.

“I am just a family doctor. I’m not an expert. Are we dealing with something genetic? Pure bad luck? Or possibly related to a change in the environment?” he asks. The questions have scared the people of Fort Chipewyan, who note that the birds and moose taste different, as does the water, which leaves scum around their tea cups when emptied.

“How much more development could this river system take?” asks Archie Waquan, former chief of the Mikisew Cree First Nation tribe that lives in this town of 1,000.

The government insists oil is naturally occurring in the water, just as it is in the sands of Alberta, which could explain some of the issues being raised.

“We have been monitoring water quality since the 1970s,” says Rob Renner, Alberta’s environment minister. “There is no evidence of contamination.”

That is not enough for people concerned with developing oil sands the size of Florida. “We need a thorough investigation of the river, and how it has changed in the past 10 years, by an independent group,” says David Schlinder, a world-renowned biological scientist and water expert at the University of Alberta.

How soon – or even if – that will be forthcoming remains to be seen.

Copyright The Financial Times Limited 2007

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