OIL SANDS-PART 1: Showdown at Ft. McMoney


Chris Arsenault*

FT. MCMURRY, Canada, Oct 16 (IPS) - The sun rises in a bright, red line over flat land, small lakes, boreal forest and peat bogs as our small double engine plane bumps through early morning turbulence between Edmonton and Ft. McMurray, Canada.

With more than 173 billion barrels of oil recoverable with current technology and more than 100 billion dollars in committed capital investment, the Alberta tar sands around Ft. McMurray are considered the largest industrial project on earth. Unlike conventional crude, oil here isn't pumped, it's mined.

Current developments could yield 21 billion barrels of oil, according to the Canadian Association of Petroleum Producers. In 2007, the tar sands produced 1.2 million barrels of oil every day. By conservative estimates, this number will rise to 3.5 million barrels per day by 2020.

Locals here call it Ft. McMoney, as the median annual income for a two person family in this sprawling boom town is 120,100 dollars, the highest level in Canada and about twice the national average.

But this wealth comes with hidden costs, according to environmentalists. "Ft. McMurray is like an old-time gold rush and this leads to socio-economic conflicts and environmental problems," Thomas Clayton-Muller from the Indigenous Environmental Network told IPS.

In 1967, when Suncor energy opened the first tar sands operation, Ft. McMurray had some 1,000 residents. Today, 60,000 people live here with another 20,000 cloistered in temporary work camps, according to Janet Annesley, a public relations representative with Shell Canada.

Annesley hosted a group of journalists and senior Shell executives on a tour of Albian Sands Muskeg River Mines, a development that began producing 155,000 barrels of oil per day in 2002. Albian Sands is partially owned by Shell and the company is trying to counter negative press.

In Britain, the Advertising Standards Authority (ASA) recently reprimanded Shell for a series of advertisements which called the oil mine a "sustainable energy source".

"Because we had not seen data that showed how Shell was effectively managing carbon emissions from its oil sands projects in order to limit climate change, we concluded that the ad was misleading," said ASA in its ruling.

Don Thompson, president of the Oil Sands Developers Group, an industry association, wouldn't comment on the Advertising Standards Authority ruling. But in a meeting at Shell Canada's headquarters in downtown Calgary, he told IPS that "recent media and NGO [non-governmental organisation] reports have criticised the environmental performance of the oil sands industry. Much of this criticism is unjustified."

Environmentalists say that mining tar sands oil produces three to five times more greenhouse gas emissions (GHG) than conventional crude. Large amounts of water and natural gas are required to heat and separate oily tar -- or bitumen -- from the sand.

Extracting one barrel of oil from the tar sands requires 650 cubic feet of natural gas, according to Shell Canada figures.

"They [pipeline companies] are developing a multi-billion-dollar [gas] pipeline from the Mackenzie Delta," said Dr. David Suzuki, Canada's leading environmentalist. "All of that gas is going to be brought down, but not to heat our homes. It's going to be burned in the tar sands to melt the tar sands," Suzuki told IPS.

The tar sands currently account for around 5 percent of Canada's greenhouse gas emissions (GHG) and that number is expected to rise as production levels increase. By 2030, the tar sands could be producing 5 million barrels of oil per day, according to Alberta government figures. "That would account for more than half of all the greenhouses gases we produce in Canada," said David Suzuki. "It's just crazy."

"We didn't put the oil there," Shell's Janet Annesley told IPS in response to questions about increased GHG emissions from increasing levels of oil production.

When considering emissions from the beginning of production to the end burning of gasoline in cars, or what oil lobbyists call the "well to wheel life cycle", Annesley says oil sands crude is only around 15 percent worse than conventional oil in terms of GHG emissions.

Oil from countries like Saudi Arabia must be shipped to North America on tankers, which increases GHG emissions, while tar sands oil is moved to the U.S. via pipelines.

Environmentalists don't think those numbers are accurate and question the well to wheel methodology. Simon Dyer of the Pembina Institute, an environmental think-tank based in Alberta, told IPS that well to wheel is "an attempt by industry to duck the issues and deflect attention," adding that tar sands oil is still between 16-40 percent more GHG intensive than regular crude when using the industry's lifecycle methodology.

In August, Pembina and other environmental groups pulled out of the Cumulative Management Association (CEMA), an organisation created by Alberta's provincial government and tasked with including various stakeholders in discussions around tar sands operation and expansion.

"The oil sands approval process wouldn't even wait for CEMA reports before approving new mines," said Dyer in response to why his organisation pulled out of the co-management group.

"CEMA made a recommendation a couple of months ago to halt new land leases [for tar sands operators] and the provincial regulators didn't listen. The organisation [CEMA] was doing more harm than good," Dyer told IPS.

Don Thompson from the Oil Sands Developers Group says he isn't concerned that Pembina and other groups pulled out of CEMA, even though the "multi-stakeholder" is now missing key participants.

Unlike Pembina, who tried to work with industry, Greenpeace Alberta takes a more provocative approach. "We are calling for a cool out, phase out approach," Mike Hudema, a spokesperson for the group, told IPS.

In July, Greenpeace activists snuck into a facility owned by Syncrude, the largest oil sands consortium, and unfurled a banner reading: "World's Dirtiest Oil: Stop the Tar Sands."

In August, Syncrude launched a 120,000-dollar lawsuit against the activists, claiming among other things that Greenpeace hindered the "quiet enjoyment of the Operation Lands". Anyone who has visited tar sands mines can affirm they are less than quiet places.

While one would assume that roughnecks and truck drivers getting rich from the tar sands would clash with environmentalists, Greenpeace's Hudema says they are particularly supportive when the group canvasses for donations. "They [oil workers] are the nicest at the door and the most ready to give," he said.

"Our campaign isn't against anyone working in the industry. The potential for clean energy is huge in Alberta; it's the sunniest province the country, with some of the most windy areas in its southern corridor," Hudema told IPS. "We have to make a transition to green jobs, so workers can put food on the table while having an environment fit for their children and grandchildren."

*This is the first of a three-part series investigating the political, environmental and social impacts of Canada's oil sands development. Chris Arsenault holds the 2008/09 Phil Lind Fellowship at the University of British Columbia. A portion of his visit to Alberta was minded and financed by Shell Canada.