Northern Alberta's Dirty Oil Reserves

Courtesy: The Guardian

VOICEOVER: This is the epicenter of the world's biggest modern oil rush—Canada's vast oil sands near Fort McMurray in northern Alberta. These are the second-largest oil reserves in the world next to Saudi Arabia, and all the major oil companies are rushing in. But it means environmental devastation.

INTERVIEWER: But this is what we would call the bottom of the barrel. This is the [inaudible]. This is the tar. This is almost the stuff which we put on our roads. This is the lowest quality oil in many ways. And it also requires vast amounts of energy to produce. How much energy are you using to produce this much?

BRIAN MAYNARD, VICE-PRESIDENT, CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS: We roughly use one barrel of energy on average to produce six barrels. So you're absolutely right: this is energy-intensive, it's more expensive to develop, it's more technologically challenging, and it does have a higher environmental impact.

INTERVIEWER: [inaudible] decide the impact on the land and [inaudible] decide the impact on the water resources or even on the amount of gas that you're presently using. What about the carbon dioxide emissions? What about the greenhouse gas emissions?

MAYNARD: The process of developing and producing [inaudible] is so energy-intensive. This produces more greenhouse gases than conventional side of the business. That can be as many as two to three times as much as the conventional side of the business.

DAVE COLLIER, VICE-PRESIDENT, SHELL CANADA: Well, energy use is obviously an important part of the overall economics of this project. So from an economic standpoint, we're incented [sic] to reduce energy use.

VOICEOVER: Shell plans to be the biggest player in Alberta. They're already extracting 1.3 million barrels a day, and they'll double this in just a few years. This is some of the dirtiest oil in the world.

COLLIER: Carbon capture and storage is new, and they're probably four, or five, six years away in terms of ability to actually get projects up and—.

INTERVIEWER: And what's stopping you doing it right now?

COLLIER: There's two things, probably three things I'd highlight. One is simply these are large projects, and there's a significant lead time associated with them. Second is the regulatory framework in Alberta is still not fully developed with respect to CCS projects. And third is the economics are challenging.

INTERVIEWER: You mean, you want money from government to set up these projects?

COLLIER: Well, we think that in order to incent [sic] early action on CCS projects, that some sharing of the risk and the costs between the public sector and the private sector is important.

INTERVIEWER: You're making vast amounts of money. You're making hundreds of millions dollars' profit a year, and you are still demanding that the government then comes up with money for you to be able to invest in carbon capture and other [inaudible]. Why is that? Why can't the industry just take the lead and say, "Okay, Canada is going to be the world leader in carbon [inaudible]. As it is, it seems from a distance that you're actually just rushing down the road which your industry has been in for very many years.

MAYNARD: John, it's not just a question of money. Technology also takes time. It takes time to develop and takes time to deploy. So the challenge on climate change is one that will require innovation and ingenuity, it will require energy on the part of all of us, not just this industry.

VOICEOVER: Canada is coming under fierce criticism for missing its Kyoto targets. It is becoming the dirty man of the West.

INTERVIEWER: All I'm saying is: is this a responsible way, given the climate change situation as it is, is this a responsible way to actually develop more oil?

MAYNARD: Well, let me answer that in this particular way. There is no doubt that the concerns and the issue of climate change is very, very serious, and it is a challenge that the industry takes very seriously.

INTERVIEWER: But surely the oil industry is ignoring its greatest environmental responsibility. Here it is, clearly having an enormous impact on [inaudible] climate, and you're just producing as much as you can. I mean, is this not an industry completely responsible and out of control?

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