Alberta's tar sands

Alberta's tar sands are located in three major deposits in northern Alberta. These are the Athabasca-Wabiskaw oil sands of north northeastern Alberta, the Cold Lake deposits of east northeastern Alberta, and the Peace River deposits of northwestern Alberta. Between them they cover over 140,000 square kilometres (54,000 sq mi) - an area larger than England.

Lobbying U.S. Democrats
"If you don't like the oil sands oil, what companies will do [in Canada] is build a bigger pipeline to the west coast and export it to China and India," warned Nexen Energy lobbyist Dwain Lingenfelter, while attending the U.S. Democratic National Convention (DNC) in Denver in August 2008. Nexen has "major investments" in the oil sands region of Alberta, Canada. Lingenfelter, along with Canadian cabinet minister Tony Clement, held a closed-door meeting with presidential candidate Barack Obama and his top energy advisor, Jason Grumet, during the convention. Grumet had earlier blasted oil sands oil for having "a much greater impact on climate change." Clement explained, "We have to be more aggressive in representing Canadian values and interests in the American political scene." Nexen has hired former U.S. ambassador to Canada Gordon Giffin as a Washington, DC based oil sands lobbyist. The industry is powerful in Canada. In July alone, oil sands industry representatives held 36 meetings with Canadian ministers and government officials.

Shell Ads Declared Greenwash
In August 2008, Shell was found guilty of misleading the public over its tar sands operations. The British Advertising Standards Authority (ASA) ruled that the company should not have used the word “sustainable” trying to describe its Canadian tar sands operations. The ASA ruled that the advert had breached rules on substantiation, truthfulness and environmental claims.

It was back in February 2008, that the Financial Times had ran an advert by Shell to accompany its financial results. The oil giant claimed that: “We invest today’s profits in tomorrow’s solutions.” Shell explained it was harnessing its technical expertise “to unlock the potential of the vast Canadian oil sands deposits”, but then added: “Continued investment in technology is one of the key ways we are able to address this challenge, and continue to secure a profitable and sustainable future.”

Shell was challenged by environmental organisation WWF. David Norman, the WWF’s director of campaigns, said: “The ASA’s decision to uphold WWF’s complaint sends a strong signal to business and industry that greenwash is unacceptable.” Celebrating its victory, WWF launched an ad campaign outside London’s Waterloo station stating “Shell can’t hide the environmental impact of their oil sand projects.”

Will the Two Richest Men Invest?
In August 2008, two of the world’s richest men visited Alberta’s oil sands, leading to speculation that one or both of them was going to invest. Warren Buffett, widely regarded as the world’s richest man and Bill Gates, the founder of Microsoft, toured Canadian Natural Resources Horizon oil sands project near Fort McMurray, Alberta.

The men were given details on the Canadian oil industry by the Canadian Association of Petroleum Producers. “We were asked to come up and do a short presentation,” said Greg Stringham, vice-president of markets and fiscal policy at the association.

Just the fact that the two had toured the region made the shares of two major oil sands players jump. Suncor Inc, Canada’s oldest oil sands company, gained C$3.62 to close at C$59.89, a jump of 6.4 percent. Canadian Natural Resources rose C$6.13 to C$88.40, a gain of 7.5 percent.

On September 17th, 2008, 14 environmental groups from Canada and the U.S. wrote to Buffet and Gates, saying that as philanthropists, the two men should hear "all sides of the tar sands debate" and "will want to know about the grave environmental impacts and serious human health implications of the tar sands industry." The letter offers to set up a meeting between Gates and Buffett and representatives of affected First Nations in Alberta.

What is the Financial and Climate Risk?
In September 2008, fund managers and campaign groups told a meeting in London that investors in companies such as Shell and BP who are investing in tar sands are facing growing risks as a result of the companies’ involvement.

The campaign groups, such as Greenpeace and WWF, as well as some socially-responsible investment funds, such as Co-operative Asset Management, warned that developing the oil sands was not only environmentally damaging but also financially risky. They argued that this is because it is increasingly likely that a price will be put on carbon dioxide emissions in North America, threatening the viability of oil sands projects.

A report by Greenpeace and oil analysts Platform, released at the event, argued that conventional oil production generates an average of 28.6kg of carbon dioxide per barrel, whereas oil sands production generates 80kg-135kg per barrel. James Marriott of Platform, said “Our argument to investors is that there is an investment reason not to go further into something that is full of risk.”

Another ethical investment specialist, Mark Hoskin, a senior partner at Holden & Partners, also expressed concern about relying on tar sands in the current economic climate. "The recent banking crisis has shown how the financial markets can totally misjudge both the risks and values inherent in company balance sheets. Oil companies depend on oil reserves for their market values. BP and Shell are two of our most trusted UK stocks, but it is a shocking fact that 30% of Shell's oil reserves are in tar sands. This report unveils how dangerous this approach is. There is a good chance that tar sands could be to the oil industry what sub-prime lending was to the banking sector."

In a related move, F&C Management, the UK’s oldest investment trust, had joined with a group of US and Canadian fund managers to halt Wall Street financial regulators softening the rules on tar sands. They were also arguing that new rules should take account of the carbon impact of oil sands reserves.

Elizabeth McGeveran, senior vice-president in F&C’s governance and sustainable investment team, said: “The energy consumption required to extract a barrel from Canadian tar sands is very different to a barrel of crude from the Gulf of Mexico. Understanding climate risk will assist investors in understanding and evaluating reserves”.

Tar Sands is More "Ethical" than Saudi Oil, Argues Canadian Press
The Canadian Press was quick to hit back at the ethical investment community. In an editorial entitled “'Dirty oil' beats bloody oil” the Calgary Herald argued that that those in the ethical investment community who are worried about oil sands are “misguided.”

The Herald tried to belittle the tar sands contribution to global CO2. "First, there's the matter of scale. Canada produces two per cent of the world's CO2. Of that modest amount, a mere 4.6 per cent comes from the oilsands. This is not melting the snows of Kilimanjaro and to focus upon it as environmentalists do, is simply fearmongering." The real evil, argued the Herald is not tar sands, but "China's coal-fired electrical power generation industry."

The paper also attacked the ethics of Saudi oil. "Apart from presiding over a misogynistic, medieval, and tyrannical society, the House of Saud quietly finances an extreme form of Islam around the world -- Wahabbism -- that considers the West infidel, and less militant forms of Islam to be heretical. It is the intellectual seedbed of terrorism."

It finished by saying "We have no wish to mock the good intentions of ethical investors. Yet, this single-minded antagonism to the oilsands on environmental grounds is simply misguided. It is not wrong to be concerned with what might happen in 100 years' time, but it's like standing on a beach: The danger of gazing intently at the horizon is that one may not notice one's feet are about to get wet."

Many would argue that this is a fundamentally flawed argument. It is not a question of Saudi or Canadian oil, it is not a question of Chinese coal versus Canadian oil. It is a question of coming up with a pathway to a clean-energy future, from a diverse array of renewable technologies.

From Boom To Bust?
In October 2008, the financial crisis was reported to be hitting oil sands development. Trade journal, OilWeek’s gloomy assessment was that: “Plummeting oil prices and the stock market meltdown have raised concern that Alberta´s energy boom may be heading for a bust.”

What started the concerns was the mothballing of a partially-completed BA Energy Heartland upgrader. But OilWeek reported that five other major projects in the same area were also now being reconsidered. The magazine quoted the veteran energy analyst Wilf Gobert who said: "We´re at a critical junction with oilsands and mega-projects. New capital investment is starting to look questionable."

Canadian MPs were said to be putting a brave face on the situation. “I see no bust whatsoever,” Canadian Finance Minister Iris Evans said. "We have such a solid footing here in Alberta … we’re going to continue to grow and flourish.”

But Oil Week was not the only one pointing out oil sands problems. The Canadian Globe and Mail reported days later that “Market woes” were hitting the oil sands projects. The paper said that “global financial crisis is threatening new Alberta oil sands processing projects, as tighter credit lines and lower oil prices cause companies to look for cheaper alternatives.”

"The Air is Foul, the Water is being Drained and Poisoned"
In October 2008, Maude Barlow, the chairwoman of the Council of Canadians, and an adviser to the United Nations on water issues, toured the oil sands.

She was shocked by what she saw. “We were devastated by what we saw and smelled and experienced.” Barlow likened what she saw to Mordor, from Lord of the Rings.“The air is foul, the water is being drained and poisoned and giant tailing ponds line the Athabasca River,” she told a news conference late last week. “What stunned me from the air is how close they are to the Athabasca River and what might happen if there was a spill.”

Barlow and The Council of Canadians called for a moratorium on new oil sands development until thorough human and ecological impact assessments have been undertaken. Moreover Barlow was so shocked by what she saw that she said she would like to take her concerns about protecting Canada’s water supplies, including in areas around the oilsands, to the United Nations Assembly’s floor.

CCS offers “Limited” Solution to Oil Sands CO2 Emissions
Supporters of oil sands argue that one of the key ways in which its greenhouse emissions will be controlled is through carbon capture and storage (CCS) techniques. However, in November 2008 it was reported that Canada's government saw only limited opportunities to cut greenhouse gas emissions using CCS. Notes prepared by a Carbon Capture Task Force, and obtained under Freedom of Information legislation, said the technology offered only limited solutions. “Only a small percentage of emitted CO2 is 'capturable' since most emissions aren't pure enough. Only limited near-term opportunities exist in the oil sands and they largely relate to the upgrader facilities.”

The note also said that the projects will be expensive and that the government would have the legal liability for stored carbon-dioxide.

Tar Sands PR Offensive Begins
Just a week before President-elect Obama was inaugerated, the Canadian Government starting to spin its message that Washington could risk its energy security if it doesn’t take advantage of Alberta’s oil. Speaking on a Calgary radio station, Prime Minister Stephen Harper, said: “We want to work together with the United States on environmental and energy issues. To be frank on the oil sands, we’ve got to do a better job environmentally. At the same time, the development of these things is pretty important, in our judgment, to North American energy security.”.

Harper wanted to negotiate a climate change agreement with the new Obama administration that protected the oil sands development. But he was vehmenetly opposed by by Canadian environmental groups who were demanding that Obama rejected any special treatment for oil sands under any climate deal. “The integrity of such a system would be entirely compromised should it somehow give a ‘pass’ to the production of high carbon oil from the tar sands, which many believe is the intent of the overture,” said the letter, which was signed by a half-dozen groups, including the David Suzuki Foundation, the Pembina Institute and the Sierra Club of Canada.

Copies of the letter were sent to Mr. Obama’s cabinet designations, including soon-to-be secretary of state Hillary Clinton, incoming energy secretary Steve Chu, and the president-elect’s special adviser on energy and climate change, Carol Browner.

One Hours Profit for 500 Dead Ducks
In April 2008 500 ducks were found dead or dying in toxic tailings along a migratory route for hundreds of thousands of waterfowl. In February 2009 it was announced that Syncrude Canada could face fines of up to $800,000 if convicted under provincial and federal environmental legislation in connection with the deaths of the waterfowl.

The charges were the first of their kind against an oil sands company. They came as Alberta and Canada wages a PR campaign to promote the resource as “safe” and “secure.” “I think we have an obligation not only to the environment, but to the public and to the credibility of our system if we don’t lay charges,” Alberta Environment Minister Rob Renner told reporters yesterday.

Under the Alberta Environmental Protection and Enhancement Act, Syncrude could be fined up to $500,000 for failing to ensure that “a person who keeps, stores or transports a hazardous substance or pesticide shall do so in a manner that ensures that the hazardous substance does not directly or indirectly come into contact with or contaminate any animals, plants, food or drink.”

Syncrude also has been charged federally under the Migratory Birds Convention Act for “allegedly depositing or permitting the deposit of a substance harmful to migratory birds in waters or an area frequented by birds.” The maximum penalty is $300,000.

Although $800,000 seems a lot of money, the Globe and Mail newspaper worked out that an $800,000 fine represented less than an hour of production revenue from the mine concerned.

Critics also contended that the prosecutions could be politically motivated – to try and show that Canada is a “responsible” oil producer before President Obama visited later that month month.

Obama Says that Dirty Tar Sands Can Become Clean
In an interview with the Canadian Broadcasting Corporation before his visit to Ottawa in February 2009, Obama declined to label oil from tar sands as “dirty oil” which should somehow be curtailed. Obama acknowledged that tar sands did create “a big carbon footprint” but then said the US and Canada should collaborate on ways to sequester carbon, preventing it from being emitted into the atmosphere. “Ultimately, I think this can be solved by technology” said Obama.

“I think that it is possible for us to create a set of clean energy mechanisms that allow us to use things not just like oil sands, but also coal,” he said.

It was interesting how the press interpreted Obama’s remarks: Bloomberg’s headline was ”Oil From Canada’s Tar Sands Can Be Made ‘Clean,’ Obama Says”. The financial newswire said: “Oil extracted from tar sands in Canada can be made a clean energy source, and the U.S. will work with its northern neighbor to develop the technology, President Barack Obama said. A joint effort by the U.S. and Canada, its biggest trading partner, on ways to capture and store carbon dioxide underground would “be good for everybody.””

Many people critical of the tar sands would see this is dangerous stuff. The most dirty oil on the planet had suddenly become clean.

Messages to Obama on the Eve of His First Oversees Visit
As President Obama prepared to visit Ottawa in February 2009, he was bombarded with letters, banners, adverts and interviews all with one message – to back away from Canada’s dirty tar sands.

The day before his visit, Greenpeace activists scaled a bridge in the Canadian capital yesterday and unfurled large banners pointed towards Parliament saying “Climate Leaders Don’t Buy Tar Sands.” On the same day, a group of 50 prominent Canadians, including numerous politicians, writers and sportsmen, first nations and environmental groups sent Obama an open letter yesterday, entitled: “Green jobs, yes we can. Tar sands, no we can’t”.

The letter read: “As you prepare for your visit, we ask you to recognize the very serious consequences of continued reliance on tar sands oil and the obstacle this presents in moving towards sustainable energy production and consumption in our countries. There are dramatic environmental and social impacts caused by tar sands production”.

But it warned that it be wrong to have much faith in such untried methods, such as carbon, capture and storage, which Obama says could be used to “clean” tar sands. “Costly and unproven technological fixes such as carbon capture and storage do not provide ’silver bullet’ solutions to addressing emissions from tar sands,” the letter said.

The same day, three Canadian groups placed a full page advertisement in USA Today highlighting environmental damage wrought by the Alberta oil sands. Environmental group ForestEthics, the Mikisew Cree, and the Athabasca Chipewyan First Nations indigenous communities placed the ad to call attention to the Conservatives’ “flawed climate policy” which they say has been designed to allow tar sands expansion.

In the Advert, it depicted an oil soaked Canada and asked the question: President Obama – You’ll never guess who is standing between us and our new energy economy? Canada’s tar sands: the dirtiest oil on earth.

The final message was from veteran climate scientist, James Hansen who labelled tar sands “an environmental wild card. ” “If we burn all the conventional fuels — oil, gas and coal — we would be heading the planet to eventually an ice-free state,” Hansen said. “This unconventional fossil fuel is a total wild card on top of that,” Hansen said. “You just can’t do it, that’s what politicians and international leaders have got to understand. You can’t exploit tar shale and tar sands without pushing things way beyond the limit. They’re just too carbon intensive.”

Co Op Funds Legal Challenge Against Tar Sands
In February 2009, Britain’s leading “ethical” bank, the Co-operative announced that it was helping fund a legal challenge by the Beaver Lake Cree Nation, which claims the boom in dirty tar sands extraction is destroying their ancestral hunting lands.

The court challenge calls for an injunction to stop more than 16,000 permits issued by the Alberta state government and, if successful, could dramatically reduce or even stop the exploitation of this “dirty oil”.

Beaver Lake Chief Al Lameman argued the community had no choice but to take the legal action, after evidence began to emerge that caribou, elk, moose, deer and other animals were disappearing and infected with diseases, fish stocks were damaged by pollution in the water, and plants used for traditional medicine were under threat. “The impacts are very, very devastating sometimes,” he said. “We refer to the earth as our mother, the mother of all things.”

The case rests on a treaty signed in 1876 under which the Beaver Lake Cree gave up their ownership of huge areas of land, in return for a guarantee that “as long as the sun shines, the rivers flow and the grass grows, we can continue our traditional way of life”, including “traditional rights to hunt, fish, trap and gather for food and support”. However another clause in the treaty excluded land that may “be required or taken up for settlement, mining, lumbering or other purposes.”

In the Beaver Lake area, future extraction might not stop altogether, but would be much more tightly controlled “to the point it is not a danger any more”, said Lameman. “What we want is control over what’s happening on it.”

If the Beaver Lake case is successful, other indigenous groups could also mount legal challenges and oil companies could be hit with potentially “massive investment damages”, argued Paul Monaghan from the Coop. “If unchallenged, this trend risks making attempts to avoid dangerous levels of climate change almost impossible.”

Tar Sands Lobby Launches PR Offensive
In March 2009, it emerged that a new corporate front group had been formed to push for oil sands development. The Center for North American Energy Security (CNAES) is not a consumer lobbying organisation promoting energy-efficiency it is in fact an oil industry group promoting the use of Canadian tar sands.

CNAES, which used to be called the Center for Unconventional Fuels, has nothing to do with energy efficiency or renewables. It is a organisation, in their own words, which is “dedicated to advancing the common interests of all five unconventional-fuels segments, wherever and however that can be accomplished, in both governmental and private sectors.”

CNAES was one of the groups featured by the The Canadian Financial Post in an article entitled “Washington big guns take up oil sands cause.” The article stated that “As Alberta’s oil sands industry struggles with depressed oil prices and opposition from the environmental movement, a new front is emerging to support it — in Washington.”

“From the recently formed Center for North American Energy Security (CNAES), headed by former Republican Congressman Tom Corcoran, to the American Petroleum Institute (API), some of the world’s major oil companies and former U.S. ambassadors to Canada like Gordon Giffin, some big guns in Washington’s lobby community are taking up the oil sands cause.”

Representing CNAES is the lobbyist Michael Whatley, a partner with HBW Resources in Washington and former chief of staff to former Republican Senator Elizabeth Dole. Defeated in the 2008 elections, Dole accepted $318,346 from oil companies from 2000 to 2008, making her one of the top recipients of oil money.

Whatley told the Financial Post that “his group is borrowing from the playbook of the environmental lobby, which does  five things really well: It uses consistent messages — no oil, no coal, clean water and clean air; it is aggressive and loud; it builds support outside Washington, working state governments and foreign  governments; it rewards good political behaviour and punishes bad behaviour to the point of taking down opponents in election campaigns;  and it recruits good allies, such as organized labour or educators.”

Tar sands is now one of the priorities for the American Petroleum Industry too. The API’s oil sands message is, according to Jim Ford, vice-president of regulatory affairs, “Canada’s our very nearby neighbour, we have the most cordial relations that one can have, they are already our largest source of imported oil, and the potential for being able to  increase our level of energy security by increasing the amount of oil  that we receive from Canada, from our point of view, is an attractive prospect”.

Tar sands developments 2012
On June 8, 2012, Koch Industries' Canadian energy division Koch Oil Sands Operating ULC put interests in several Alberta oil sands properties on the auction block, offering stakes in six properties comprising 220,000 net acres. Total bitumen in place is estimated at more than 8 billion barrels, and the recoverable resource potential 2.9 billion barrels, according to financial adviser for the offering Western Divestments.

Koch's offering followed other oil sands properties onto the market, including a multibillion-dollar package of assets owned by ConocoPhillips, and a smaller holding from Royal Dutch Shell called Orion.

Mercury
In December 2013, government scientists reported finding a more than 7,300-square-mile ring of land and water contaminated by mercury surrounding the tar sands in Alberta, with areas close to the sands showing much higher levels of mercury than before development.

Waste ponds
A 2013 report by Alberta's Energy Resources Conservation Board found that none of the seven companies operating in the tar sands met the original performance standard for cleaning up and eventually eliminating the open ponds storing mining waste from the tar sands along the Athabasca river. Alberta's government imposed the performance standards in 2009 to try to reduce liquid waste dumps. Under the standards, mining operators were to have reduced their waste by 50% by June 2013. The board did not propose any penalties against the companies, suggesting instead that the clean-up targets may have been overly optimistic.

Spills
A 2013 Global News investigation found that over the past 37 years, Alberta’s extensive network of pipelines has experienced 28,666 crude oil spills in total, plus another 31,453 spills of a variety of other liquids used in oil and gas production — from salt water to liquid petroleum. That averages out to two crude oil spills a day, every day. On June 1, 2013, a tar sands spill was discovered near the small town of Zama City in Alberta, Canada. Apache Corporation said 9.5 million litres of 'produced water' was released into the environment, covering over 1,000 acres of boreal forest. Following initial speculation that the leak stemmed from aging infrastructure, officials from Apache Corp. revealed that the pipeline was only five years old and had been designed to last for 30.

Related SourceWatch articles

 * Greenwashing
 * Shell
 * WWF

External resources

 * Matt Price, 11 Million Litres a Day: the Tar Sands' Leaking Legacy, Environmental Defence (Canada), December 2008.

Reports

 * "Big Oil’s Oily Grasp - The making of Canada as a Petro-State and how oil money is corrupting Canadian politics," Polaris Institute, 2012.

External articles

 * Dawn Walton, "Protests dog Alberta PR campaign", Globe and Mail, April 27th, 2008.
 * Josh Dorner, "Ducks per gallon: Tar sands are hardly 'environmentally responsible'", Gristmill, May 2, 2008.
 * Carol Christian, "No U.S. restrictions on oilsands," Fort McMurray Today (Alberta, Canada), June 12, 2008.
 * Terry Macalister, "Tar sands - the new toxic investment: Report warns against oil industry's equivalent of the sub-prime mortgage crisis," The Guardian (UK), September 17, 2008.
 * Mike De Souza, "Billions of litres of tainted oilsands water leaking: Report", Leader-Post, December 9, 2008. (This is a Canwest News Service story).
 * Kelly Cryderman, "Oilsands have trouble shaking dead ducks," The Calgary Herald (Canada), December 28, 2008.
 * Editorial: "Oilsands strategy is just good public relations," Calgary Herald (Canada), February 15, 2009.
 * Robert Kunzig, "Scraping Bottom: Once considered too expensive, as well as too damaging to the land, exploitation of Alberta's oil sands is now a gamble worth billions," National Geographic, March 2009.
 * Damien Wood, "Alberta tar sands, nuclear power proposals connected, says Calgary-based journalist," Grande Prairie Daily Herald-Tribune (Alberta, Canada), June 9, 2009.