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It’s a dirty business — the new gold rush that is blackening Canada’s name

The Times

November 4, 2009

Ben Webster

A giant mechanical digger gouges out a chunk of topsoil, grass and tree stumps, extending a neat furrow that stretches into the distance. Dozens of similar furrows run parallel with the regularity of a ploughed field.

Yet no crop could grow in the pitch-black surface exposed by the machine working 1,000ft below our helicopter. This is the edge of a fast-expanding open-cast mine in the Canadian tar sands, one of the world’s most polluting sources of oil.

It takes only a few minutes to fly across the 200 sq miles (520 sq km) of mines, processing plants and man-made lakes of toxic water. But Canada has so far extracted only 2 per cent of a resource that it hopes will turn it into a global energy superpower.

BP and Shell are among dozens of oil companies preparing to raise production from 1.3 million barrels a day at present to 2.5 million by 2015 and 6 million by 2030.

Canada faces a dilemma as it prepares for next month’s UN climate summit in Copenhagen. It wants to present itself as environmentally responsible but also wants the profits from the tar sands, which cover an area of Alberta’s natural coniferous forest larger than England.

The sands contain 174 billion barrels of proven reserves, the world’s second-largest reserves after Saudi Arabia. With improved techniques, Canada hopes to extract between 315 billion and 1.7 trillion barrels.

A Co-operative Bank study calculated that, even if all other carbon dioxide emissions stopped, fully exploiting the tar sands would still tip the world into catastrophic climate change by raising global temperatures more than 2C above pre-industrial levels. Extracting each barrel of crude from the sticky mass of sand, clay and bitumen produces two to three times as much CO2 as drilling for a barrel of conventional oil. The tar sands boom faltered a year ago as the oil price fell below the $60 a barrel at which the extraction process is profitable. Now, with oil at about $80 a barrel, hundreds of fortune seekers arrive each day in Fort McMurray, the oil equivalent of a gold rush town.

Two lanes are being added to the bridges from the town to the tar sands projects across the Athabasca River. The airport is planning a new terminal and oil companies have built four private runways to ferry workers to their sites directly. But the best indication of Fort McMurray’s growth is the constant traffic jam. It can take an hour just to reach the highway from the suburbs that have sprung up in the hills around the town.

The average house costs C$600,000 (£340,000) , but that is well within the budget of truck drivers at the mines, who, with overtime, earn C$180,000 a year. Many workers fly in from depressed fishing towns in Newfoundland and save money by living in mobile cabins stacked four storeys high in clearings in the forest.

Jean Fournier, 64, a scaffolder working on a new processing plant, says that he has earned C$64,000 in the past four months — working 24 days on and four off. “That’s three times what I could earn back home in New Brunswick. I’ve made enough money to build my own house and I’m retiring after six more weeks here.”

He scowls when asked about Greenpeace’s recent occupation of tar sands plants: “Greenpeace will make people starve by killing the economy. We all care about the environment but we need our jobs.”

With winter temperatures of minus 40C, the 112,000 tar sands workers are more concerned with protecting themselves from the cold than the world from global warming. A comment article last week in the local paper, Fort McMurray Today, begins: “Where the hell is the global warming some people are so worried about?”

Syncrude, which operates one of the biggest mines, is working hard to improve its image and recently handed back its first piece of “reclaimed land” to the Canadian Government. Publicity photographs show imported bison and young trees, but when you visit you realise that this is less than half a square mile on the edge of a wasteland of mines and toxic lakes.

Syncrude no longer refers to tar sands, the name used since the 19th century, because it thinks “oil sands” sounds more positive. It describes the topsoil stripped away as “overburden” and the toxic lakes as “tailings ponds”.

In April last year 1,600 ducks died after landing on an oil slick on one of Syncrude’s lakes. It took a full year for the company and Alberta’s environment agency to admit the scale of wildlife loss. To ward off another PR disaster, Syncrude has filled the lakes with orange scarecrows, known locally as bit-u-men.

Canada knows, however, that the biggest long-term threat to its tar sands industry is not dead ducks but international regulations on greenhouse gas emissions. Most of the crude is exported to the United States, where several states are considering banning it because it is so carbon-intensive. America’s dependence on tar sands is a sensitive issue in Washington, and Barack Obama’s ambassador to Canada toured the mines last month and questioned the companies about their carbon emissions.

Alberta’s latest proposal to rid tar sands of their dirty image is a C$2 billion subsidy for carbon capture and storage (CCS) facilities. Shell plans to install CCS by 2015 at an upgrading plant but admits that it would reduce carbon emissions from its tar sands production by only 15-20 per cent.

Mel Knight, the energy minister for Alberta, which receives C$12 billion a year in revenue from its oil and gas industries, told The Times: “There has to be at least a hundred years of production in the oil sands and CCS will make this more palatable. My feeling is we will reach a steady state of five million barrels a day. The oil sands are critical [to] the global supply of energy. The world needs the energy and there’s no alternative that we can see.”

Shell plans to increase production from 155,000 barrels a day to 255,000 next year. BP is designing a plant with an initial output of 60,000 barrels a day, rising to 200,000 within a decade.

Canada has offered belatedly to cut its current CO2 emissions by 20 per cent by 2020 but wants to be forgiven for ignoring the target set at Kyoto a decade ago. Its emissions were 26 per cent above its 1990 levels by 2006: the Kyoto target was a 6 per cent cut.

Peter Lee, director of the environmental group Global Forest Watch Canada, said: “There is no place for oil sands in a low-carbon future. Canada is ignoring its global responsibility and betraying its promises.

“If we can’t get it right in Canada, one of the world’s richest countries, how can we expect developing countries to reduce their emissions?”

Andrew Weaver, a climate scientist at Victoria University, British Columbia, and contributor to the Intergovernmental Panel on Climate Change, said: “If we burn the tar sands, we are effectively saying we don’t owe anything to future generations.”

Related Links

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