Record profits coupled with little or no regulation of the oil industry, and it's off to the races once again in Canada as far as natural resources versus the health of the environment are concerned. This time the triggering mechanism is the tremendous petroleum reserve contained in Canada's oil sands (formerly known as tar sands). Fueled by the U.S.'s insatiable desire for gasoline, and its historical dependence on natural resources from Canada, the current boom is only expected to escalate in profit-taking frenzy.
Skyrocketing prices for crude oil have started a rush that has made exploiting the sands profitable. The industry has been producing oil for as little as $24 a barrel, creating huge profits when prices hit $50 a barrel, or even $70.
The oil industry demanded, and was given, major tax breaks and sweetheart royalties by the provincial and federal governments for oil sands development. Under a new royalty schedule recently announced by Alberta, companies will pay a minuscule one percent on oil sands production.
A report by conservation biologist Brian Horejsi of Western Wildlife Environments Consulting covers the magnitude of habitat fragmentation currently in Alberta from oil and gas development: more than 225,000 wells have been drilled; one-million miles of seismic road access and more than 300,000 miles of pipeline right-of-way have been cut; and 450,000 miles of all-weather road access have been built. None of this construction is or was subject to environmental assessment. Reserves at or near the surface are recovered through large-scale strip-mining. Huge mounds of oil sand are excavated and moved by trucks weighing 240 tons and standing three stories high. Two tons of sand produce one barrel of oil.
Environmentalists are, not surprisingly, aghast at the magnitude of this fast growing and earth-despoiling industry. "Tar sands oil is to conventional oil what crack cocaine is to ordinary cocaine powder," says Elizabeth May, executive director of the Sierra Club of Canada. "It's more harm to global climate through increased greenhouse gas emissions, more destruction of boreal forests, more toxic tailings and more air and water pollution." The club estimates that the expected doubling of tar sands production by 2010 will produce 70 megatons of global warming gasses annually--12 percent of Canada's Kyoto target for that year.
U.S. officials are focusing on this rich resource. Vice President Dick Cheney had planned to visit Canada's sands last September until Hurricane Katrina forced him to postpone the trip. The recently passed federal energy bill calls for research and the start of a commercial leasing program on government lands to speed up the U.S.'s own development of oil shale reserves in Colorado, Utah and Wyoming, in part by tapping into Alberta's expertise. Oil shale is similar to oil sands, but the process of extracting crude is more difficult. Oil sands are impregnated sands that yield mixtures of liquid hydrocarbon and require further processing other than mechanical blending before becoming finished petroleum products.
Oil sands currently represent 40 percent of Alberta's total oil production and about one-third of all the oil produced by Canada. They are deposits of bitumen: viscous oil that through rigorous treatment becomes an upgraded crude oil that can be used in refineries to produce gasoline and other fuels. Bitumen is about 10 to 12 percent by volume of the actual oil sands. The …