oil sands

This is the world's most destructive oil operation—and it's growing

Can Canada develop its climate leadership and its lucrative oil sands too?

Large enough to be seen from space, tailings ponds in Alberta’s oil sands region are some of the biggest human-made structures on Earth. They contain a toxic slurry of heavy metals and hydrocarbons from the bitumen separation process.
Photograph By Ian Willms

The scale of Alberta’s oil sands operations, the world's largest industrial project, is hard to grasp. Especially north of Fort McMurray, where the boreal forest has been razed and bitumen is mined from the ground in immense open pits, the blot on the landscape is incomparable.

If Alberta, with its population of four million people, were a country, it would be the fifth largest oil-producing nation. While it produces conventional oil, most comes from the Alberta oil sands, the world’s third largest proven oil reserve at 170 billion barrels.

And these days, even as Canada promotes action on climate change on the world stage, the Canadian and provincial governments are pushing to expand oil sands operations—which brings substantial economic benefits to the region—in the face of a chorus of opposition from environmentalists and indigenous people.

Canada does have some claim to credibility on the climate action front. As early as 2007, Alberta’s provincial government instituted a carbon tax on large industrial emitters, which has raised U.S. $350 million (C $463 million) for energy research. At the Paris climate summit in 2015, Canada pushed for the ambitious 2.7 degrees Fahrenheit (1.5 degrees Celsius) global warming target. A national carbon tax went into effect April 1, 2019.

Yet when Texas-based Kinder Morgan, owners of the 65-year-old Trans Mountain oil pipeline, announced last year that it was abandoning plans to expand the pipeline—essentially by building a much larger twin along most of the same 715-mile (1,150-kilometer) route from Alberta to British Columbia—the government of Prime Minister Justin Trudeau spent U.S. $3.4 billion (C $4.5 billion) to buy the whole project. The expanded pipeline had been bitterly opposed by indigenous and environmental groups—but is important for unlocking new Pacific markets for the Alberta oil sands.

“Pipelines are critical in ensuring Canada has access to high growth markets and receives full value for our natural resources,” Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP), said at the time. A poll in May 2018 found that 56 percent of Canadians supported the Trans Mountain project.

“Canada wants to be a climate champion,” says Kevin Taft, author and former leader of the Liberal Party in Alberta. “At the same time, it wants to increase its oil exports.” His most recent book is titled Oil’s Deep State: How the Petroleum Industry Undermines Democracy and Stops Action on Global Warming—in Alberta, and in Ottawa.

Canada is warming twice as fast as the rest of the world, according to a new government report. That report also warned that drastic action is the only way to avoid catastrophic outcomes. “We need to act now so our kids can have a healthy planet and good jobs,” Prime Minister Trudeau wrote on Twitter on April 4, 2019.

The growing oil sands sector presents carbon challenges, CAPP executive vice president Terry Abel acknowledges. But the industry is working with the government, he says, “to help put in place climate policies to help meet the goals.” Abel points to carbon-capture technology being developed and deployed by the industry—including a Shell project that captured a million tons of carbon dioxide in its first year in 2016. He says the average emissions per barrel of oil produced in the region have declined by roughly 30 percent since the early 1990s.

However, Canada is not likely to meet its 2020 carbon emission reduction target, experts warn. Nor is it likely to meet its 2030 Paris climate target—and that's almost entirely due to increasing emissions from the oil and gas sector, which are expected to reach 100 million metric tons a year by then. A study published in April in Nature Communications found that emissions from the Canadian oil sands, measured directly from aircraft, are about 30 percent higher than the figures reported by the industry.

Big footprint

Canada has produced oil since the 1850s. Oil is the country’s biggest export earner, and although production has boomed even more in the U.S. lately, thanks to shale fracking, oil is a much bigger part of the Canadian economy. The vast majority of Canada’s oil is produced in Alberta.

Perhaps surprisingly, the oil sands don’t actually have any oil per se. Instead, a huge area about the size of Florida or Wisconsin north and east of Edmonton, Alberta, contains a tarry bitumen mixed with sand that is mined from underneath the boreal forest.

The 120-odd active oil sands projects are owned by major oil companies from Canada and around the world, including the U.S. and China. Together, the companies pump out 2.6 million barrels every day, virtually all of which is shipped to U.S. refineries. What’s shipped is diluted bitumen, not crude oil. Bitumen is too thick to pump, so light crude oil and chemicals are added.

In most of Alberta, the bitumen is buried so deep that wells must be drilled to extract it, and steam injected to mobilize it, at great energy cost. But north of Fort McMurray the bitumen layer is shallow enough that it can be strip mined in huge open pits.

A quick look north using Google map’s satellite view clearly shows some of the impacts on the landscape. Scattered along the banks of the Athabasca River is one of the world’s largest collections of tailings waste ponds—able to fill more than 500,000 Olympic swimming pools. These are so toxic, ducks and other birds have to be prevented from going near them.

Although some companies have invested significantly in technology to address the tailings problem, that has not put a dent in the scale of the problem, according to the Pembina Institute, an Alberta-based energy think tank. The overall volume of tailings has kept growing for more than 50 years. Some ponds are leaking into the Athabasca River, says Paul Belanger, a former oil sands worker and current co-chair of Keepers of the Athabasca, an organization of indigenous peoples and environmentalists.

Air pollution, including acid rain, also plagues the remote region. One study found that acid rain would eventually damage an area almost the size of Germany.

As a result of these issues, oil from the oil sands has a higher environmental cost than other sources, Belanger says. “I grew up in the bush up there,” he says. “Alberta is incredibly beautiful, but big parts are being absolutely destroyed.”

Not permanently, Abel argues: By law, he says, oil sands producers must reclaim the land when they are finished with their operations. Only a small fraction of the mined land has been reclaimed so far, however.

“Sometimes people have this perception that this industry has no oversight, no regulation, that they are wild cowboys doing whatever they want to do,” Abel says. Pointing to the $150 million a year the industry spends on environmental monitoring, he asserts that “the oil sands is the most heavily monitored region, and industry, in the world.”

Impact on First Nations

The oil sands industry has been very destructive to the environment and our communities in the region, says Eriel Tchekwie Deranger, executive director of Indigenous Climate Action, an indigenous-led organization.

“It’s had a huge impact on caribou, bison, moose, birds, fish, the water, the forest. It’s affected our ability to travel, to gather food from the land—it’s really overwhelming,” says Deranger, a member of the Athabasca Chipewyan First Nation located near Fort Chipewyan, north of Fort McMurray.

Karim Zariffa, the executive director of Oil Sands Community Alliance, an industry group, says the industry has tried to work closely with local and indigenous people over decades to share information and provide funding.

But if local communities object to proposed oil sands projects, says Janelle Marie Baker, an anthropologist at Alberta’s Athabasca University, it makes no difference. “Projects are always approved by government,” Baker says.

The best they can hope for is to have some land set aside to buffer the impacts and get some compensation. “There’s a strong cultural preference for food from the land. Some have never eaten meat from a store,” she says.

With the oil industry’s fingers in all aspects of government, communities don’t have much choice, says Deranger. Even though Indigenous Climate Action is led by former activists from Greenpeace, the Sierra Club, and other organizations, they don’t want to shut the oil sands industry down. “That would just make things worse,” Deranger says.

For one thing, Deranger points out, the cleanup of mines and tailings ponds will eventually require enormous investment. One government estimate put the bill as high as U.S. $195 billion (C $260 billion).

For another, many indigenous communities in the region are deeply impoverished. So in spite of the history of mistrust, some First Nations communities have become partners in oil sands projects, in return for jobs, grocery stores, housing, and public facilities. When a community wanted to build off-grid solar for electricity, Deranger says, no one else stepped up to help except the industry. The same was true for a health center.

“Indigenous peoples are often seen as being widely opposed to oil and natural gas development—that’s simply not the case. There are many indigenous communities who have built, and continue to build, a prosperous economic future by working with industry,” McMillan, of the Canadian Association of Oil Producers, said in a statement last year.

The Fort McKay First Nation is an exceptional example. Surrounded by oil sands mines, it has recently sued the Alberta government to stop a project that would consume some of its last traditional hunting lands. But from 2012 to 2016 it earned an average annual revenue of more than C $500 million by providing services to the oil sands industry, according to a study by the Fraser Institute. Fort McKay’s per capita income is substantially higher than the Albertan or Canadian average.

Rather than advocating for the closure of existing oil sands projects, Indigenous Climate Action opposes any expansion of the industry and is working to help communities make a transition away from oil and toward renewable energy projects, particularly those that are indigenous owned and operated. As a result, they are strongly opposed to the Trans Mountain pipeline, since it could help increase the size of oil sands operations and contribute more to climate change. Even worse, in their view, is the fact that the Trudeau government spent billions to buy the pipeline—money they would have liked to see improve the poor housing, water infrastructure, and energy deficits within indigenous communities.

A number of indigenous communities along the pipeline’s route remain resolutely opposed, and especially in the province of British Columbia. If built, the pipeline could dramatically increase the number of large oil tankers using coastal waters. That could endanger the local orca population and risk oil spills.

“The answer is still 'no'. The Kinder Morgan Trans Mountain pipeline will never be built,” Grand Chief Stewart Phillip, president of the Union of British Columbia Indian Chiefs, told media in 2018, after Trudeau announced the pipeline would be built.

Behind the scenes, Taft says, there was immense pressure by the oil industry on Trudeau to get the pipeline built. “It shows the power of the industry, even when it’s facing imminent decline.”

Even if the Trans Mountain pipeline does go forward, Taft adds, it will take years to complete. “Long after the industry is gone, we will have to deal with the consequences.”

Stephen Leahy is a writer based in Toronto, Canada. Ian Willms is a photographer based in Toronto.

Editor's Note: This story has been updated to include new information and more complete responses from the oil sands industry.

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