Canada’s black gold glimmers but tarnishes
The Aurora Mine exudes the odor of petroleum and the look of untapped riches.
The open pit mine plunges 250 feet deep and ranges over a couple of square miles, carved out of pine and spruce forest by gigantic machines that operate 24/7, even in the dark of winter at 40 below zero.
This is the heart of Alberta’s oil sands, a remote Florida-sized region where moose, bears and beavers inhabit watery woodlands atop the world’s largest proven petroleum reserves outside Saudi Arabia.
The unusual deposits -- where oil is locked in the tarry soil rather than pooled beneath the surface -- are yielding a bonanza of investment dollars, government revenue and jobs.
Almost half of Canada’s oil production comes from the oil sands -- and the energy industry estimates that enough oil can be economically extracted to fill the country’s needs for three centuries.
The vast majority of Canadian oil exports goes to the United States, and the Bush administration sees the remaining resources as America’s best hope for reducing dependence on Middle Eastern oil.
“No single thing can do more to help us reach that goal than realizing the potential of the oil sands,” Energy Secretary Samuel Bodman said during a visit last July.
The benefits may be great, but the toll on other natural resources is also enormous.
Separating petroleum from sand burns so much natural gas that the enterprise is becoming the largest source of greenhouse gas emissions growth in Canada. The oil sands lie within a major intact ecosystem, the boreal forest covering almost a third of Canada’s land mass.
The forest is one of the world’s biggest freshwater storehouses and absorbs a vast amount of carbon dioxide. It also provides habitat for hundreds of species of birds and is home to caribous, wolves and bears. Expansion of the oil sands operations could tear huge holes in a forest already rent by logging, oil and gas exploration and other industries.
With development expected to triple, or even quintuple, in the next few decades, producers and government officials puzzle over how to harness the oil sands’ potential with less cost to the climate, land, water and the well-being of native peoples who fear that cancer cases in a downstream community may be a sign of lethal industrial pollution.
Current leases for open-pit mining cover an area several times the size of New York City, according to the Pembina Institute, an environmental research group in Alberta. But more than 50,000 square miles is potentially available for various types of oil extraction, which has prompted environmentalists to call for stopping development until ecological effects can be reduced.
“The very nature of oil sands means that developing them ... causes an incredible disruption to land and landscape over immense areas,” said a March report by the House of Commons natural resources committee.
Although the U.S. is the primary market for the oil, pressure for development also comes from Chinese companies that have been investing hundreds of millions of dollars in leases.
Not for the ‘faint of heart’
Cavernous pit mines account for the bulk of the 1.2 million barrels of oil generated daily in a region with an estimated 174 billion barrels in reserve.
Syncrude Canada Ltd., a joint venture that includes Exxon Mobil Corp.-controlled Imperial Oil Resources, has 8,000 workers; it spent $4.2 billion last year and has invested billions more in capital improvements.
“It is not a business for the faint of heart,” spokesman Alain Moore said.
At Syncrude’s Aurora Mine, dozens of electric shovels eat away at the tarry deposits. With each scoop, the behemoths drop 100 tons of dirt into trucks with beds as big as small houses.
Amid clouds of dust, the trucks deliver their payload to machinery that crushes and screens it before it is mixed with hot water and piped into a cone-shaped tank. A form of petroleum called bitumen rises to the top, then is upgraded in a maze of smokestacks, pipes and steel structures up to 23 stories high.
The leftovers are stockpiled on the surrounding landscape. Huge yellow blocks of sulfur impurities are stacked pyramid-fashion. Dunes of sand expelled from the plant sweep toward the horizon. On lake-sized tailings ponds, floating scarecrows and bursts from air cannons discourage birds from alighting on the oily wastewater that would kill them.
Recovering oil from sand requires the use of natural gas to heat water, which produces greenhouse gases and other air pollutants. The water itself is drawn from the nearby Athabasca River, which flows 765 miles from glaciers in the Canadian Rockies through numerous small communities and sustains waterfowl, fish and other wildlife.
Although improved technology and recycling have reduced the amount of water and energy needed for each barrel of oil, Syncrude’s reports show overall quantities growing along with oil production.
The oil sands operations accounted for 4% of Canada’s greenhouse gas emissions in 2005, and energy regulators say it has been increasing.
University of Alberta ecologist David Schindler projects that oil development, coupled with climate change, could cut the Athabasca River’s low winter flow in half or more by midcentury.
“What they want to withdraw is an unsustainable amount,” he said.
Alberta environmental officials recently established water use rules to prevent biological damage to the river, and the provincial government has required a 12% reduction in greenhouse gas emissions per barrel of oil.
But experts at the Pembina Institute maintain that those measures are inadequate.
The industry, which generates billions of dollars in economic activity, royalties and taxes each year, says it plans to minimize environmental effects through improved efficiency and land restoration required by government leases.
Syncrude reports that it has reclaimed a quarter of the land disturbed by mining, although the government has not yet certified the land’s ability to sustain wildlife and plants.
Greg Stringham, vice president of the Canadian Assn. of Petroleum Producers, said oil sands operators were looking at alternatives to natural gas for heating water, including starting controlled fires underground or using nuclear power. Some companies, he said, are looking at ways to sequester carbon dioxide underground.
“The government does not want to shut down the development because it provides benefits [to the country] and revenues to them,” Stringham said. “All anyone can hope for is the best available technology, not just stop producing oil.”
Like a modern gold rush, the oil sands development has lured thousands of workers with jobs that may pay more than $100,000 a year. Along forested Highway 63 north of Fort McMurray, the main road to the oil sands, mining operations look like company towns -- office buildings, warehouses, equipment yards, dormitories and cafeterias contribute to the boomtown aura.
The population of Fort McMurray, a former fur trading settlement, has nearly doubled since 1995 to more than 65,000. The highway through town is clogged morning and night with commuting mine workers. And affordable housing is so scarce that some people live in garages or their vehicles.
At a trailer park, equipment operator Alayne Guibeault made a home in his pickup for months, using an electric heater against subzero temperatures.
“My plan is to make money, bring my wife and girl here, and maybe after four years buy a house ... near Banff in the Rocky Mountains,” said Guibeault, who is from Quebec.
Chamber of Commerce official Michael Allen owns a music store near a popular strip club and bar in an area that has drug dealing and prostitution.
Gesturing toward the planned site for the town’s first condominium towers, Allen said the oil boom was a net plus.
“There has never been a better time for business here,” he said.
Even those who claim harm from the fallout say the oil boom has its advantages.
Ivy Simpson, a 28-year-old who works at an all-terrain vehicle dealership, developed cervical cancer 10 years ago. Simpson believes she was exposed to pollution from oil developments while living in the downstream hamlet of Fort Chipewyan. But she later took a job at a mine for about $30 an hour -- enough to pay rent and buy a truck.
“Being a single mom and recently widowed, I needed the work, and I had to pay the bills,” Simpson said. “It’s expensive to live here.”
Fort Chipewyan, the oldest settlement in Alberta, is a 50-minute flight and worlds away from Fort McMurray. The town’s quiet streets run between dense woods and the rocky shoreline of Lake Athabasca, which receives water from the Athabasca and other rivers.
“To have a lake like this and not be able to drink from it is a real shame,” said Ray Ladouceur, 65, a commercial fisherman who has caught fish with humped backs, cysts and other deformities. “I call this a red zone, a danger zone, to live in.”
An industry-funded monitoring program that includes government agencies and environmental groups has studied fish in the river but not the lake.
“We see some [tumors and cysts] occasionally,” said Fred Kuzmic, an oil company biologist who heads the program. But he said the proportion of observed abnormalities had dropped by more than half since 2005, when 7% of the fish sampled were deformed and that most of the abnormalities probably were caused by scrapes on the swift river’s bottom.
Dr. John O’Connor, the regional chief of family practice, was disturbed by the fish abnormalities. O’Connor said he had seen an alarming number of rare cancers and cases of autoimmune diseases such as lupus and rheumatoid arthritis.
“It raised the question,” he said. “Were the numbers and types of illnesses we were seeing the result of genetics, lifestyle, bad luck or environmental?” He worried that the oil sands might be an environmental cause.
O’Connor was especially concerned about a bile duct cancer called cholangiocarcinoma, which had previously claimed his father’s life. This disease occurs in about two of 100,000 people. But O’Connor was certain of four cases and suspected one or two others in Fort Chipewyan, which has fewer than 1,200 residents.
Statistics recently compiled by the local nursing station show an increase in mortality and of cancer-related deaths in the last decade. Twenty-one residents died last year, eight of cancer.
After the doctor expressed his concerns in a radio report last year, federal health authorities filed a complaint this year alleging that he was unduly alarming the public. Alberta’s medical licensing body is investigating the complaint.
A year ago, the Alberta Health & Wellness ministry had conducted a study that found more cases of certain cancers than expected in Fort Chipewyan, but only one case of cholangiocarcinoma. It concluded that overall cancer levels were not significantly different from elsewhere in the province.
But local residents and colleagues of O’Connor questioned the thoroughness of the study and accused the government of trying to shut up the doctor to protect the oil industry.
“The message for anyone who blows a whistle is you will be clobbered,” said Dr. Michel Sauve, the regional chief of medicine.
Provincial water officials say they know of no water pollution from the oil sands, but some elders who once drank directly from the lake now even avoid drinking from remote streams when they hunt and trap.
Joe Wandering Spirit, 67, whose one-room cabin is in the bush several miles from town, drinks water collected in a rain barrel, not from the Quatre Fourches River at his doorstep.
“Long ago, people never died of cancer, but recently a lot died,” he said in Cree. “I don’t know if that [industrial pollution] is causing illnesses, but it might be, because we don’t really know what the white people are doing at the oil sands.”
Recently, Ivy Simpson’s mother, Mary, visited the grave of her own mother, who died of leukemia in 1989.
Reflecting on cancer in her town, Mary said, “Sixty ... years down the line, there will be no more oil, so all these oil companies will leave the aboriginal people here with all our sickness. I pity my five grandchildren.”
In Fort McKay, which is surrounded by oil mines, tribal Chief Jim Boucher recalled the hard times before the oil sands were developed.
Worldwide anti-fur campaigns in the mid-1980s had destroyed traditional trapping, and the town of a few hundred was left with the choice between welfare or seeking another economic opportunity.
“We decided to work with the resource development sector,” Boucher said. “I am proud of our ability to make a transition and make a good living.”
Besides providing jobs, oil sands operators contract with several tribal businesses and donate money for education and community facilities. But the chief acknowledged his tribe’s deep fears about environmental and health effects.
“We have been saying for some time that changes have been happening to land, air, water and wildlife,” Boucher said. “The one thing we don’t appreciate is being the canary in the coal mine for the oil industry.”
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Canadian oil boom
Alberta’s oil sands, which hold an estimated 174 billion barrels of crude that can be economically extracted, are the largest proven oil reserves outside Saudi Arabia. The deposits are concentrated in three regions of the province.
Aside from Canada, most of the countries with the largest proven crude reserves are in the Middle East. Here are the top 10, in billions of barrels, 2007 estimates:
Saudi Arabia: 262.3
United Arab Emirates: 97.8
* Conventional crude and oil sands
Sources: ESRI, TeleAtlas, Alberta Geological Survey, Energy Information Administration, Oil and Gas Journal