The Canadian Oil Boom Scraping Bottom

Posted by in Article

Continue from the previous article, Nor is Syncrude alone. Within a 20-mile radius of Boucher’s office are a total of six mines that produce nearly three-querters of a million barrels of synthetic crude oil a day; and more are in the pipeline. Wherever the bituman layer lies too deep to be strip-mined, the industry melts it “in situ” with copious amounts of steam, so that it can be pumped to the surface. The industry has spent more than $50 billion on construction during the past decade, including some $20 billion in 2008 alone. Before the collapse in oil prices last fall, it was forecasting another $100 billion over the next few years and a doubling of production by 2015, with most of that oil flowing through new pipelines to the U.S. The economic crisis has put many expansion projects on hold, but it has not dimished the long-term prospects for the oil sands. In mid-November, the International Energy Agency released a report forecasting $120-a-barrel oil in 2030–a price that would more than justify the effort it takes to get oil from oil sands.

Nowhere on Earth is more earth being moved these days than in the Athabasca Valley. To extract each barrel of oil from a surface mine, the industry must first cut down the forest, then remove an average of two tons of peat and dirt that lie above th oil sands layer, then two tons of the sand itselft. It must heat several barrels of water to strip the bitumn from the sand and upgrade it, and afterward it disccharges contaminated water into tailings ponds like the one near Mildred Lake. They now cover arround 50 square miles. Last April some 500 migrating ducks mistook one of those ponds, at a newer Syncrude mine north of Fort McKay, for a-hospitable stopover, landed on its oily surface, and died. The incident stirred international attention–Greenpeace broke into the Syncrude facility and hoisted a banner of a skull over the pipe discharging tailings, along with a sign that read “World’s Dirtiest Oil:Stop the Tar Sands.”

The U.S. imports more oil from Canada than from any other nation, about 19 percent of its total foreign supply, and around half of that now comes from the oil sands. Anything that reduces our dependence on Middle Eastern oil, many Americans would say, is a food thing. But clawing and cooking a barrel of crude from the oil sands emits as much as three times more carbondioxide than letting one gush from the ground in Saudi Arabia. The oil sands are still a tiny part of the world’s carbon problem–they account for less than a tenth of one percent of global CO2 emmisions–but to many enviromentalists they are thin end of the wedge, the first step along a path that could lead to other, even dirtier sources of oil: producing it from oil shale or coal. “Oil sands represent a decision point for North America and the world,” says Simon Dyer of the Pembina Institute, amoderate and widely respected Canadian environmental group. “Are we going to get serious about alternative energy, or are we going to go down the unconventional-oil track? The fact that we’re willing to move four tons of earth for single barrel really shows that the world is running out of easy oil.”

That thirsty world has come crashing in on Fort McKay. Yet Jim Boucher’s view of it, from an elegant new building at the entrance to the besieged little village, contains more shades of gray than you might expect. “The choice we make is a difficult one,” Boucher said when I visited him last summer. For a longtime the First Nation tried to fight the oil sands industry, with little success. Now, Boucher said, :we’re trying to develop the community’s capacity to take adventage of the oppurunity.” Boucher preesides not only over this First Nation, as chief, but also ovet the Fort McKay Group of Companies, acommunity-owned business that provides srvices to the oil sand industry and brought in $85 million 2007. Unemployment is under 5 percent in the village, and it has a health clinic, ayouth center, and a hundred new three-bedroom houses that the community rents to its members for far less than market rates. The First Nation is even thinking of opening its own mine: It owns 8.200 acres of prime oil sand land across the river, right next to the Syncrude mine where the ducks died.

As Boucher was telling me all this, he was picking bits of meat from a smoked whitefish splayed out on his conference table next to a bank of windows that offered a panoramic view of the river. A staff member had delivered the fish in a plastic bag, but Boucher couldn’t say where it had come from. “I can tell you one thing,” he said. “It doesn’t come from the Athabasca.”