Dirty Oil and the Future of a Continent
Author: Andrew Nikiforuk.
Published by Greystone Books, 2008.
When Dr. John O’Connor tried to alert the authorities to suspected health problems within a community downstream of the tar sands, he had no idea that he would be attacked by Health Canada for his efforts. His experience as a whistleblower provides a sobering glimpse into the perverse priorities that prevail today in Edmonton and in Ottawa, and we can be justly appalled. But how has this situation come about?
In this fact-filled exposé Andrew Nikiforuk shows just how far one province has descended into reckless, unchecked industrial development cheered on by a secretive and unaccountable governments; with severe long-term consequences for society, the environment, and the economy.
The setting is the Alberta Tar Sands, a vast underground deposit of bitumen and sand. As the planet’s reserves of oil begin to run dry, oil companies are driven to exploit the few remaining sources of fossil energy, however unattractive. The tar sands have been scarcely touched until recently for good reason: compared with oil they are much more difficult, more expensive and more environmentally damaging to extract. A mix of sand and near-solid bitumen, they are the least desirable fossil fuel, the last remaining dregs of our planet’s once abundant fossil-energy reservoir.
Nikiforuk paints a bleak picture of where this development is taking Alberta, with Canada being dragged along in its wake. Here is just some of what he asserts.
The scale of the development under way is already mind-boggling and it is growing exponentially
Whatever metrics we examine, the numbers are difficult to grasp and we quickly run out of superlatives.
Since 2001 Canada has become the largest single supplier of oil to the USA, surpassing Saudi Arabia. At current rates of development, Canada will soon provide nearly one third of the USA’s oil.
The pace of development has been accelerating exponentially, with the Alberta government committed to a laissez-faire approach: no development application has been rejected to date.
Attracting nearly 60% of the world’s oil investments, the tar sands are the largest construction project on the face of the planet, and the largest in history: they are larger than the Great Wall of China, which took 2000 years to build.
The area of boreal forest that will eventually be bulldozed or industrialized is the size of Florida.
The tailings ponds, which grow with each barrel extracted, already contain the largest impoundments of toxic waste on the planet, 75 times the size of Lake Louise and easily visible from space. If these were poured into the Lake Erie basin today, they would fill it to a depth of eight inches: by 2030 they would fill it to a depth of seven feet.
These ponds are contained by dykes, made from the soil bulldozed away to reach the bitumen. They stand an average of 270 feet high above the forest floor.
The process used to extract and convert the bitumen into oil is staggeringly wasteful and destructive of scarce resources and the environment
For each barrel of oil that is piped south, at least three barrels of precious water are taken out of our rivers or groundwater and then discarded as lethal toxic waste. So the USA gets our energy for the next few decades, while we get to keep the environmental mess forever. Future generations of Canadians will have to tend to the fragile, leaky earth dams and guard this poisonous waste for thousands of years. At any time an earthquake or severe weather event could cause an environmental disaster that would dwarf the Exxon Valdez.
In addition to the water consumption, the energy consumption is huge. Regular oil is an attractive fuel because for every hundred barrels produced, only about five barrels (or their energy equivalent) are consumed in extraction and processing. In contrast, for every hundred barrels of oil squeezed from the tar sands, the equivalent of thirty or more is consumed in extraction and processing.
Worse, it’s not oil that is being used to provide the energy for extraction and processing, it’s a much scarcer and more valuable energy source: natural gas. The tar sands already consume enough natural gas to heat four million homes*, equivalent to about one quarter of Canada’s total housing stock, and still growing.
Each barrel of bitumen produces three times as much greenhouse gas as a barrel of regular oil. It is no surprise that Canada has spent $6 billion on climate change programs for the past fifteen years and not met a single target.
The development of the tar sands undermines Canada’s energy security
Canada’s dwindling supplies of precious natural gas – a clean and easily transportable fuel – are being rapidly used up to extract the bitumen and to convert it into oil. The energy security of the whole country – including Alberta – is being put at risk to feed oil companies profits and America’s energy addiction.
While the western provinces send their energy south as fast as they can, half of the Canadian population remains dependent upon imported oil. But there is no physical means to send the oil east to other Canadian provinces since the pipelines being built all run south; and NAFTA prohibits the diversion of these supplies to meet Canada’s internal needs. So when the lights go out in Toronto and Halifax the tar sands will still be operating flat-out: to keep the lights on in Seattle and Los Angeles.
The development of the tar sands is doing little for most ordinary Albertans
The government of Alberta has set its royalty rates at bargain-basement prices – among the lowest in the world – using formulae that prop up oil company profits and subsidize the cost overruns that are commonplace. While politicians try to conceal the truth from Albertans, tar sands promoters have boasted to their US customers that they ‘give it away’ at a one-percent royalty structure.
The government of Alberta is also negligent in collecting what it is owed by the oil companies, keeping inadequate records and turning a blind eye to cheating and delinquency.
Little provision for the future is being made: the income from royalties is simply being spent. The Albertan trust fund, which was established in the 1970’s to harvest this one-time bonanza for future generations, has since been depleted and now stands at a mere $17 billion**. By comparison, Norway, which has a smaller oil industry, has a trust fund with $400 billion in savings for the future, and still growing.
While some segments of the Albertan population are benefiting from high-paying jobs associated with the tar sands, the vast scale of development means that industry cannot meet its needs from the local population. It relies upon the temporary importation of thousands of foreign workers, while the frenzied pace of development forces up the price of just about everything from housing to food, and strains the infrastructure to breaking point. Water is scarce, the air is polluted, schools are overflowing, highways that serve the oil patch are overcrowded and dangerous.
As in most ‘gold rush’ destinations, the quality of life goes into decline as the precious resource is feverishly extracted. The oil patch has proven to be no exception.
The costly environmental mess will be dumped on the taxpayer and future generations
Despite promises to restore the boreal forest to its pristine condition, industry has a track record of dumping abandoned mines onto the taxpayer. The Auditor General found that orphaned mines make up more than 30% of contaminated sites that the federal government is now responsible for. The government is spending hundreds of millions of dollars to clean up a mere handful of these.
Operators of open pit mines in Alberta are supposed to restore the land to an ‘equivalent land use’ state, when it can be certified by the government as reclaimed. But no company has ever closed a bitumen mine, scientists haven’t figured out whether reclamation after this type of development is even possible, and estimates suggest that the costs are likely to be enormous.
In addition, the actual pace of reclamation suggests that these reclamation policies are just for show: after nearly half a century of mining in Alberta, less than 0.2% of the land dug up since 1963 has been certified as reclaimed.
In short, future generations of Albertans will be faced with a depleted provincial treasury as well as a devastated landscape, and vast reservoirs of toxic waste in fragile, leaky dams that must be watched, tended and repaired for thousands of years.
The significance of this book is that Nikiforuk accurately describes the inevitable result when powerful vested interests gain more influence over government than its own citizens, and the public interest becomes secondary to corporate profits.
This phenomenon – often called ‘state capture’ – can be seen in full force in many developing countries, and especially in so called ‘petro-states’: jurisdictions where the state’s main source of income is from oil royalties and taxes. With a few notable exceptions, such states develop secretive, unaccountable and even despotic governments that ride rough-shod over the needs of citizens in their rush to please the oil companies that they truly serve.
Canada is not yet governed like a third world country, but it is chilling to recognize how far our proud democracy has already slithered down this slippery slope.
Executive Director, Federal Accountability Initiative for Reform (FAIR)
31st August 2009
* The tar sands now consume enough gas to heat six million homes
** The Alberta trust fund has declined further and now stands at $14 billion