The Canadian Tar Sands, located in Alberta,
are the world's largest industrial project
in human history.
Some consider it as an enormous engineering feat
a shining example of innovation and perseverance
and a major economic driver for the region and the country
Others, see it as an environmental disaster
and the result of political hypocrisy
The Tar Sands however, are ultimately a story
about oil mining and its concequences.
No country will find 170bn barrels of oil
in the ground and just leave them there
As the world's largest industrial project
the scale of the Alberta Tar Sands operation is difficult to graps.
However, despite the deposit being known since the 1700s
it was only recently that the scale
of the project increased to its current size
Back in 1984 the Tar Sands were already an established producer of oil
however output of the region
was still relatively small at around 200,000 barrels/day
What spurred the growth of the area was a
combination of improvement in technology driving exploration costs down
and an increase in oil price pushing revenues higher
As you can see from this timelapse, the grand expansion of the
oil sands coincided with the oil price increase in the early 2000s
Today, after more than 300bn of capital investment
the oil sands output exceeds
3m barrels/day
which represents around 4% of global supply
The installation itself grew in size from about
75km2 in 1984 to over 900km2 in 2016
This however, pales in comparison
to the size of the whole oil sands deposit which stands at around
142 thousand km2
or slightly larger than the state of New York
and it is estimated that it contains
over 170bn recoverable barrels of oil
based on modern technology
you might be asking yourself - if there's so much oil in North America
to begin with, why has the USA - the largest
consumer of oil in the world - dedicated so much time
and resources in building its relationship with the Gulf countries
which are literally on the other side of the Globe
Well, the answer to that is quite simple
and somewhat ironic
You see, the oil sands don't actually contain any oil.
At least not in its conventional form
Instead, the sight is rich in Bitumen, which is a dense
and extremely viscous form of petroleum
and getting it out of the ground and turning it into usable form of energy
isn't exactly straightforward
in fact, let me rephrase that
the extraction of Bitumen is very difficult
So difficult in fact that in 1958 there was
a proposal to use underground nuclear detonations
in order to heat up the Bitumen, reduce its viscosity and pump it out of the ground
Thankfully, this project was rejected after some voiced their concerns about
creating a burning inferno or fusing the sand into glass.
Others were sceptical about the project which, even if successful,
would likely make the resulting oil and gas
radioactive which in turn would surely affect the demand for those products.
Today the Alberta sands are mined in one of two ways
depending on the depth of the Bitumen deposit and none of those
require nuclear explosions.
Open pit mining has proven to be most effective for deposits up to 75m below the surface,
which equates to about 20% of the total which equates to about 20% of the total reserves,
for the remaining 80% of reserves - underground mining (in situ) is used.
Despite being relatively harmless compared to nuclear explosions,
these types of mining have still managed to leave a mark on the region…
one big enough to be seen from space!
To understand why that has happened, you really need to get a
better understanding of the business model of bitumen mining.
Like we said before bitumen is difficult to extract.
What this really means is that extraction costs are higher than those of conventional drilling.
This in turn erodes margins, which means that for a business to be profitable
it needs to be running at a large scale.
As a result of these dynamics, the Oil Sands have become one of Canada’s biggest employers,
with more than 500,000 people employed by the industry and its supporting sectors.
And with many of the jobs located outside of Alberta,
the positive economic effect of the oil sands reach
every province of the country.
In addition, the oil and gas industry is the largest private investor in Canada
with the Oil Sands projects alone adding tens of billions to the economy each year.
Despite that, the biggest driver behind the Oil Sands development is not the Canadian Economy…
it’s the US.
In addition to improvements in technology the oil sands benefit from a geographic proximity
to the world’s largest oil consumer responsible for over 20% of global oil demand.
As at 2015, 99% of Canadian crude oil exports were to the US
Canada in turn was the largest foreign supplier of
crude oil to the States, accounting for 43% of total U.S. imports.
There is no doubt that the oil sands have become a successful venture
in the last couple of decades. This however has all come at a cost.
In a few words - The oil sands represent a massive environmental degradation.
If you look at the development from above it might
seem more like an industrial wasteland than a thriving part of the Canadian Economy.
This of course the result of the mining methods used for the recovery of Bitumen.
Lets look at those in more detail
The main advantage of surface mining is that nearly all of the bitumen can be extracted from the ore,
while the In-situ method leaves a substantial amount of the resource underground.
However, to achieve economic viability this has to be done on a massive scale.
What this means that the mining is severely disturbing the surface and in the process
causing deforestation and damage to wildlife ecosystems.
The in-situ method on the other hand does not disturb the surface,
however this technique very energy intensive and produces a significant volume of GHG
which in turn accounts for a large proportion of Canada’s total air pollution.
Both mining methods require significant volumes of water.
For example, for every barrel of oil produced through surface mining, 3.1 barrels of water are used.
This in turn has an impact on the Athabasca River and the surrounding freshwater aquifers
Finally, Water-based oil extraction produces large volumes of tailings –
a leftover mix of water, sand, clay and residual oil.
For every barrel of oil extracted, six to 12 barrels of tailings waste is produced.
Those are then stored in Tailings ponds which currently cover an area of 170km2.
This waste can often leak out and pollute surrounding the soils and water resources.
To make matters worse, given the low profitability of the oil sands projects,
many of the operating companies are reluctant to spend more to reduce their pollution
which ultimately results in a higher environmental damage.
In the age when Global Warming is on the verge of becoming a global crisis
the oil sands are a step back in environmental conservation
and represent the worst of the oil and gas industry.
The oil sands have been dubbed as the world’s largest industrial project in human history
but they have also become
the world’s most destructive.