How Canada Went from 21st to 2nd in World's Oil Reserves


It's well-known that the United States consumes more oil per capita than any other country in the world, absorbing two-thirds of global oil production. This heavy dependence has often, and aptly, been described as an addiction; even U.S. President George W. Bush trotted out the metaphor in his 2006 State of the Union address ("America is addicted to oil").

Most of us regard addictions (to anything) as inherently unhealthy and admission of the problem as the first step toward getting clean. In this case, however, U.S. policy has simply been to seek increased oil imports from more reliable sources closer to home, in effect, to replace distant and unstable dealers with one from the neighborhood -- specifically, Canada, already the kingpin dealer of oil to the United States. In 2005 Canada exported almost 1.5 million barrels per day to the United States, about 7 percent of U.S. daily consumption. Canada exports 66 percent of its domestic crude oil production, and since 1995 the United States has received 99 percent of these exports. At first glance, it would seem that Canada wouldn't be able to boost oil production to fill the gap; production of conventional light and heavy oil in Canada was predicted to peak in 2006 and then rapidly decline. But that's where Canada's "unconventional" tar sands come in.


The vast bulk of Canada's tar sands is found in the province of Alberta, the country's most prolific producer of fossil fuels. The tar sands deposits underlie more than 140,000 square kilometers of relatively pristine boreal forest, an area larger than the state of Florida. It's estimated that the tar sands hold approximately 1.7 trillion barrels of crude bitumen (the technical term for the fossil fuel extracted from the tar sands). But most of this bitumen will never be recovered and only a fraction, 174 billion barrels, is estimated to be recoverable with today's technology and under current and anticipated economic conditions.

When the U.S. Department of Energy formally acknowledged these reserves in 2003, it vaulted Canada's oil reserves from 21st to 2nd in the world, behind only Saudi Arabia. It's little wonder then that the U.S. Energy Policy Development Group has described the tar sands as "a pillar of sustained North American energy and economic security." Canada's so-called "black gold" has come to be regarded as an abundant, secure, and affordable source of crude oil. But development of this unconventional fossil fuel comes with unconventional risks and consequences. Everything about the tar sands is big, most significantly its global warming and environmental implications -- leading some to now describe the tar sands as "Canada's dirty secret."

Producing oil from the tar sands is scraping the bottom of the oil barrel. Tar sands consist of a mixture of 85 percent sand, clay, and silt; 5 percent water; and 10 percent crude bitumen, the tarlike substance that can be converted to oil. Bitumen doesn't flow like crude oil, and getting it out of the tar sands is a messy job. The current technology, which has evolved relatively little since it was first developed in the early 20th century, is a hot water-based separation process that requires huge quantities of water and energy (see diagram). Imagine mixing a bucket of roofing tar into a child's sandbox. Then boil some water, pour it into the sandbox, and try to wash the tar out of the sand.

Most tar sands production takes place in vast open-pit mines, some as large as 150 square kilometers and as deep as 90 meters. Before strip-mining can begin, the boreal forest must be clear-cut, rivers and streams diverted, and wetlands drained. The overburden (the soil, rocks, and clay overlying the tar sands deposit) must be stripped away and stockpiled to reach the bitumen. Four tons of material are moved to produce every barrel of bitumen.

At current production rates, with just three mines operating, enough material is moved every two days to fill a 60,000-seat stadium. But only a small fraction of the bitumen deposits is close enough to the surface to be strip-mined. Over 80 percent of the established tar sands reserves are deeper and must be extracted in situ (in place) by injecting high-pressure steam into the ground to soften the bitumen so it can be pumped to the surface.

Once separated from the sand, the bitumen is still a low-grade, heavy fossil fuel that must undergo an energy-intensive process to upgrade it into a synthetic crude oil more like conventional crude, either by adding hydrogen or removing carbon. Upgrading the bitumen usually occurs before it is shipped to refineries, but sometimes raw bitumen is diluted (e.g., with naphtha) and pipelined to a refinery where it is both upgraded and refined. In the United States about three-quarters of the oil is refined into transportation fuels.

But even then not just any refinery will do. A certain amount of reconfiguring must occur at refineries more accustomed to handling conventional crude oil. Some American refineries, primarily in the Midwest and the Rocky Mountain region, already accept some synthetic crude oil from the tar sands. But with growing reliance on this source of oil, numerous American refineries are converting or expanding in order to handle tar sands-derived synthetic crude oil or raw bitumen.


The environmental consequences of oil production from tar sands are major, beginning with its effect on climate change. North America's transition to oil from the tar sands not only perpetuates, but actually worsens, emissions of greenhouse gas pollution from oil consumption.

While the end products from conventional oil and tar sands are the same (mostly transportation fuels), producing a barrel of synthetic crude oil from the tar sands releases up to three times more greenhouse gas pollution than conventional oil. This is a result of the huge amount of energy (primarily from burning natural gas) required to generate the heat needed to extract bitumen from the tar sands and upgrade it into synthetic crude. The energy equivalent of one barrel of oil is required to produce just three barrels of oil from the tar sands.

In 2002 the Canadian government ratified the Kyoto Protocol on global warming, legally committing to a target of reducing the country's greenhouse gas pollution by 6 percent below 1990 levels by 2012. But the rapid growth of tar sands development and oil industry lobbying have undermined efforts to reduce greenhouse gas pollution for over a decade.

Since 1990, Canada's total emissions have risen 25.3 percent, a pace far exceeding the 16.3 percent increase in the United States, the second-fastest-rising nation, according to United Nations data. Regulations introduced in early 2007 are so fraught with loopholes and gaps that greenhouse gas pollution from tar sands is predicted to triple by 2020. Canada's greenhouse gas emissions in 2020 are projected to be 2 percent above 1990 levels. The environmental consequences of tar sands development hardly stop with climate change. Nowhere in the world is there a form of oil extraction and processing with more intense impacts on forests and wildlife, freshwater resources and air quality.

Forests. The tar sands are found beneath boreal forest, a complex ecosystem that comprises a unique mosaic of forest, wetlands and lakes. Canada's boreal forest is globally significant, representing one-quarter of the world's remaining intact forests. Beyond the ecosystem services it provides (cleansing water, producing oxygen and storing carbon), it is home to a wide variety of wildlife, including bears, wolves, lynx and some of the largest populations of woodland caribou left in the world. Its wetlands and lakes provide critical habitat for 30 percent of North America's songbirds and 40 percent of its waterfowl.

If currently planned tar sands development projects unfold as expected, approximately 3,000 square kilometers of boreal forest could be cleared, drained and strip-mined to access tar sands deposits close to the surface, while the remaining 137,000 square kilometers could be fragmented into a spider's web of seismic lines, roads, pipelines and well pads from in situ drilling projects. Studies suggest that this scale of industrial development could push the boreal ecosystem over its ecological tipping point, leading to irreversible ecological damage and loss of biodiversity.

Satellite images readily illustrate the magnitude of boreal forest impacts from tar sands mining operations. The United Nations Environment Program has identified Alberta's tar sands mines as one of 100 key global "hotspots" of environmental degradation. According to Environment Canada (the Canadian equivalent to the U.S. Environmental Protection Agency), development of the tar sands presents "staggering challenges for forest conservation and reclamation."

Very little of the area directly affected by mining operations has been reclaimed, and after 40 years of mining, not a single operation has received a reclamation certificate from the government of Alberta. Suncor Energy's operation, the longest-operating tar sands mine, says it has reclaimed 858 hectares of land since starting operations in 1967, less than 9 percent of the land its operations have disturbed to date. Syncrude Canada, the largest daily producer of tar sands, says its operations have disturbed 18,653 hectares since 1978, with just 4,055 hectares of land reclaimed. None of this reclaimed land has been certified as such. At best, reclamation of the tar sands region will be a large-scale experiment that is unlikely to restore a self-sustaining boreal forest ecosystem within the next century.

Waters. The Athabasca River winds nearly 1,500 kilometers from its source at the Athabasca Glacier in Jasper National Park to Lake Athabasca in Wood Buffalo National Park. It is Alberta's longest river and one of North America's longest undammed rivers. It enters Lake Athabasca at the Peace-Athabasca Delta, the largest boreal delta in the world, a World Heritage Site, and one of the most important waterfowl nesting and staging areas in North America.

It also passes directly through the boreal forest being cleared and strip-mined, and serves as the primary source of water used to separate the bitumen from the mined tar sands. Water withdrawals for tar sands surface mining operations pose threats to both the sustainability of fish populations in the Athabasca River and to the sustainability of the Peace-Athabasca Delta, jeopardizing the subsistence and commercial fisheries of local aboriginals.

Tar sands mining operations withdraw 2-4.5 barrels of fresh water from the river for every barrel of oil they produce. Current operations are permitted to withdraw more than 349 million cubic meters of water per year, a volume equivalent to the amount required by a city of 2 million people. But unlike city effluent waters, which are treated and released back into the river, tar sands mining effluent becomes so contaminated that it must be impounded.

Historically it was believed that the Athabasca River had sufficient water flows to meet the needs of tar sands operations. But it is becoming clearer that this might not be the case, particularly during the winter months, when river flows are naturally lower and growing demand for water withdrawals could lead to long-term ecological impacts. The sustainability of fish populations in the Athabasca River is threatened by continuous tar sands water withdrawals during the winter months in years when low precipitation rates in the Athabasca River basin lead to low flow conditions. Nonetheless, the government has failed to implement regulations that would require tar sands withdrawals to stop when the health of the river is at risk. In fact, the government explicitly allows the tar sands industry to continue withdrawing water no matter how low the river flows become.

For certain in situ drilling operations, significant amounts of water are required to create steam to be injected underground. Because the steam condenses into water and is pumped up with the bitumen, the water can be recycled. However, because some water remains underground, a continuous source of additional water (about half a barrel of water per barrel of bitumen) is required.

These operations are located much farther from the river and, as a result, rely mainly upon groundwater. Where shallower freshwater aquifers are used, the continuous pumping of water can lower the water table in the region. Because these groundwater aquifers are connected to lakes, rivers and wetlands, reducing their levels can cause lakes to shrink and wetlands to dry out. As a result, some operators have switched to deeper sources of salty groundwater. But because they require fresh water, the salty water must be treated, which produces large amounts of waste sludge that must be disposed of.

Both tar sands mining and in situ operations produce large volumes of waste as a result of their water use. For in situ operations, the primary waste stream, a result of treating salt water and the water that is pumped up with the bitumen, is disposed of in landfills or injected underground. Tar sands mining operations present a much more significant risk, because they produce large volumes of waste in the form of mine tailings (six barrels of tailings per barrel of bitumen extracted). These tailings, a slurry of water, sand, fine clay and residual bitumen, are stored in vast wastewater reservoirs.

The industry misleadingly refers to them as "tailings ponds," but collectively these pools of waste cover more than 50 square kilometers and are so extensive that they can be seen from space. One tailings pond at Syncrude's mining operation is held in check by the third-largest dam in the world. These tailings dumps pose an environmental threat resulting from the migration of pollutants through the groundwater system and the risk of leaks to the surrounding soil and surface water.

The high concentrations of pollutants such as naphthenic acids, which are found at concentrations 100 times greater than in the natural environment, are acutely toxic to aquatic life, yet the government has no water-quality regulations for these substances. Migratory birds fare slightly better: To prevent them from landing, propane cannon go off at random intervals and scarecrows stand guard on floating barrels. How this tailings waste, and its grave risks, might be dealt with in the long term remains unknown.

Air. Tar sands air pollution, both provincial and transboundary, is rapidly increasing. Since 2003 Alberta has been the industrial air pollution capital of Canada. Criteria Air Contaminants (CACs) are the most common air pollutants released by heavy industry burning fossil fuels. CACs are defined as "air pollutants that affect our health and contribute to air pollution problems" and include such things as nitrogen oxides (NOX), sulfur dioxide (SO2), volatile organic compounds and particulate matter, all of which are emitted in large volumes by tar sands operations.

Modeling of the impacts of approved tar sands development, which includes three operating mines and three operations at various stages of planning and construction, shows that maximum predicted ambient air concentrations of NOX and SO2 would exceed provincial, national and international guidelines. Emissions of volatile organic compounds such as benzene are also on the rise because of both emissions from burning fossil fuels (e.g., natural gas, diesel, coke) and the growing number of tailings ponds. The costs of such air pollution have not been considered.

The coming tar sands rush

Major global powers are positioning themselves to ensure access to oil from tar sands. To date, four of the five largest publicly traded oil companies in the world (Royal Dutch/Shell, ExxonMobil, ChevronTexaco, and TotalFina) have invested or committed themselves to invest billions of dollars in tar sands development. National oil companies have also staked their claim, ranging from Norway's Statoil to China's Sinopec.

Tar sands speculation, investment and development has grown dramatically. The oil industry's production target of 1 million barrels per day was achieved in 2004, 16 years ahead of the ambitious schedule for growth it laid out in 1995. That year the industry invested almost US$9 billion in Alberta's tar sands. More than US$100 billion of investment has been announced for development between 2006 and 2015.

The tar sands industry is now focused on quintupling production as quickly as possible. It is projected that tar sands production will reach 3-4 million barrels per day by 2015 and could grow to 5 million barrels per day by 2030, if not sooner. It is the prospect of this growth that has led Canadian Prime Minister Stephen Harper to label Canada an "emerging energy superpower."

The magnitude of the environmental risks and liabilities arising from Canada's tar sands rush is unprecedented in the history of North American energy production. Growing awareness about the global warming and environmental consequences of relying upon growth in tar sands production throws into sharp relief the perils of our addiction to oil in the 21st century. All North Americans, including future generations, have a stake in the outcome.

To address the impacts of tar sands production, a novel suite of government policies and innovative technologies must be deployed that drastically reduce the environmental impacts by achieving "carbon neutral" (no net greenhouse gas pollution) production, ensuring that development doesn't proceed any faster than reclamation of the boreal forest and reducing dependence on scarce freshwater resources.

The most immediate opportunity to begin our rehabilitation lies in the more efficient use of transportation fuels. To do so requires tackling another sacred cow: the flagging North American auto industry, which is in trouble partly because it is producing the wrong vehicles for the times. The abysmal fuel-efficiency of North America's SUVs, trucks and cars has actually declined since 1986.

The governments of the United States and Canada must collectively commit to implementing regulations that will make North America a global leader in fuel efficiency. By deploying more efficient technologies today, we can begin to ease the demand for transportation fuels and slow the headlong rush into extracting oil from the tar sands. This will afford policymakers and the private sector the time needed to drive investment toward low-carbon and no-carbon fuels, and to evolve our transportation systems and urban design into a state that is compatible with a carbon-free future. North America stands at a critical juncture in its transportation fuel future.

As conventional oil sources disappear, we face a stark choice: We can develop new, even dirtier sources of transportation fuels derived from fossil fuels like the tar sands, or we can set a course for a more sustainable energy future by improving the efficiency of our oil consumption while aggressively transitioning to clean and renewable transportation fuels and sustainable transportation systems.

The environmental and global warming consequences of even 1 million barrels per day of tar sands production must serve as a wake-up call, and we must acknowledge that increased reliance upon this unconventional, high-impact fossil fuel is not a viable path forward.

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