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High stakes in Canada’s vast oil-sands fields

Trillions of dollars’ worth of oil are present, but the environmental costs are high, too – and growing.

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Steam extraction less resource-heavy
Compared with surface mining, this method uses far less water – 1/4 barrel of water per barrel of oil. But for both kinds of extraction, greenhouse gas created by steam generation remain a huge challenge. Even if emissions per barrel decline, oil production is growing rapidly. ConocoPhillips is considering ways to store carbon underground and find alternatives to natural gas to fire the plant.

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ConocoPhillips is the biggest landholder in the Athabasca oil sands, with leases on 1 million acres. The company forecasts production of 1 million barrels per day at facilities like Surmont over the next two or three decades. “We know the resource is there,” says Mr. Fox, an oil-industry veteran from Scotland. “The pace of development will be dictated by economics and available technologies.”

The ferocious rate of government approval of new projects is upsetting some Canadian politicians as well as environmental groups from the World Wildlife Fund to the Sierra Club.
Former Alberta premier Peter Lough­eed is called “father of the oil sands,” since he was such a big factor in starting development in the 1970s and ’80s. But in a speech in August 2007, he warned that Alberta’s practice of bypassing federal environmental laws in its race to approve oil-sands projects “will cause significant stress to Canadian unity…. The government of Alberta, with its acceleration of oil-sands operations, will in my judgment be seen as the major villain in all of this in the eyes of the public across Canada.”

“Who can say ‘no’ to this much oil?” asks Simon Dyer, oil sands program director at the Pembina Institute, a Calgary-based sustainable-energy advocacy group that also consults for the government, aboriginal communities, and the oil industry. “The debate on the pace and scale of development isn’t being held in government. It is irresponsible to approve so many projects without protecting 20 to 40 percent of the environment in northeast Alberta – permanently. Both federal and provincial governments have failed to set limits on oil-sands production, for example, by placing a hard cap on water use of the Athabasca River and tightening rules for land-use reclamation.”

Very weak greenhouse-gas targets
“We have hopelessly weak greenhouse-gas [GHG] targets in Canada,” adds Mr. Dyer. “If you look at Canada’s total projected increase of GHG from 2003 to 2010, 41 to 47 percent of Canada’s increase can be attributed to the oil sands. They are the one single issue dragging us away from reducing GHG emissions.”

In August, the Pembina Institute pulled out of the multistakeholder oil-sands process, citing the lack of credible environmental management  the last eight years.

Pembina’s Dyer acknowledges that there has been some progress in the environmental footprint per barrel of oil produced. But the phenomenal rise of oil-sands production will create enormous environmental problems, he says. “Would environmentally friendly measures cost the oil industry more? No one has done a real study of the costs of oil-sands production in terms of mitigation for the environment.”