In our second report from the oil capital of Alberta, the question arises, ‘With huge profits being extracted from the sands, what of the environment and the interests of Native Indians?’
THERE IS something inexorable about the extraction of heavy oil – tar, really – from the sands of Alberta, whatever environmentalists think about its adverse impacts, even on Canada’s otherwise “green” image. And as the price of oil increases, more and more will be won from this difficult ground in the midst of the boreal forest.
True, there has been – and still is – a lot of strip-mining in the area around Fort McMurray. But, in fact, an estimated 80 per cent of the oil sands activity now involves drilling in situ. This is less environmentally damaging and involves injecting steam into the underground layers to soften up the bitumen and then draw it up to the surface.
“When it heats up, it will flow,” says Dale Emery, operations manager at the Jackfish in situ oil sands project, 150km south of Fort McMurray. “If you spilled any on the ground, you could roll it up with a shovel – like peanut butter.” And he says of steam-induced extraction: “It’s the same business [as strip-mining], but a completely different game”.
Liverpool-born Mike Cottrell, who runs the Oklahoma-based Devon Corporation’s Jackfish site, is bemused by environmental objections and defends what the drillers do. “We all think we’re doing a fine job,” he says. “But when you read what they say in the papers, you’d almost feel you need to pray for forgiveness before you go to work.”
The advantage of in-situ extraction is that it takes up much less space than strip-mining. Jackfish-One’s main site (it’s a “dry camp”, by the way) extends to 80 acres, plus a separate 53-acre site for the “pads” where four drills are located and 52 acres for the road and pipelines that link them – all set in the boreal forest of spindly pine and silver birch.
The Jackfish-One project cost Devon Can $500 million (€369 million), and Jackfish-Two will soak up $662 million (€489 million). It needs two and a half barrels of steam to produce a barrel of oil, using natural gas as a fuel, and Cottrell says the gas costs Can$3.60 (€2.66) for every barrel of oil produced – and that’s now fetching more than US$80 (€59).
Huge amounts of water are used in the process of extracting and “upgrading” the bitumen, although all the oil companies maintain that more than 85 per cent of it is recycled, and that no contaminated water is discharged into the Athabasca River; some, such as Devon, are even using salt water from deep underground wells for their operations.
Contrary to what some environmentalists say, the province of Alberta has a “very well developed regulatory process, with environmental impact statement [EIS] requirements and regulations for water use, energy recovery, reclamation and tailings [ponds]”, according to Rob Seeley, Shell Canada’s sustainability manager.
Mike Cottrell agrees. “I’ve been in this industry since 1982 . . . and it’s always been one of the most strictly controlled. The Energy Resources Conservation Board keeps a pretty tight rein on us.” He also points out that all of the oil produced at Jackfish is sent out by pipeline rather than transported by oil tankers on the often heavily congested roads.
Enormous articulated trucks and tankers trundle up and down the four-lane highway that runs past Fort McMurray. Many of the tankers are transporting potable water to mining camps, which house up to 5,000 workers each – mainly skilled welders, steel fabricators and machinery operators, earning at least Can$100,000 (€73,837) a year. The city’s small airport is full of guys in lumberjack shirts, blue jeans, donkey jackets and heavy boots, getting picked up in even larger than usual SUVs, some with “Oil Country” plates. They’ve come from all over Canada and the world, to get rich from working there; Fort McMurray even has Ukrainian and Somali cultural associations.
Mining must shut down regularly for extensive repairs; the oil sands are so abrasive that pipes get corroded very quickly. And it is during these “shutdowns” that the activity level is most frenetic. Turnover at the Boomtown Casino is said to exceed Can$1 million (€738,511) on Saturday nights. Everything is expensive – taxis, car-hire, hotels and housing.
It’s an untidy, even ugly place, laid out on big wide roads with buildings set well back, usually behind parking lots. Along Franklin Avenue, there’s a small Canadian flag hanging from every lamp post as if to underline that it’s patriotic to be at the centre of the oil sands. In winter, the temperature drops as low as minus 40 degrees Celsius.
Limerick-born Dr John O’Connor, who is medical director in Fort McKay, has become an advocate for the area’s aboriginals. In 2006, he noticed higher than usual levels of cancer, renal failure, auto-immune disease and hypertension among Chipewyan Indians and began asking questions about whether this was related to the oil-sands activity.
With emissions of 11,000 tonnes from smokestacks and “snow that falls grey-ish in colour”, he insisted that there was bound to be a link – “and the wrath of God came down on me”. Complaints were made against him to the Alberta College of Physicians, but these were not pursued after his findings were confirmed by the Alberta Cancer Board.
"I'm not political or against industry, but I'm sure as hell against the peril aboriginal communities have been put in," O'Connor told The Irish Times. "I'm blown away that this kind of thing could be happening anywhere, especially in Canada. But there is an incredible level of collusion between oil companies and the government. It's a rat's nest."
A documentary film at the Oil Sands Discovery Centre, just outside Fort McMurray, notes that Canada is now “the Number One supplier of oil to the Number One consumer” – the US. Indeed, more than 80 per cent of Alberta’s oil is exported south of the border, either as crude or after being refined at the huge petrochemical complexes near Fort Saskatchewan.
As long as the price of oil is relatively high, it’s big business for the oil companies, and for Alberta – which gets royalties from it – and the Canadian economy in general, and that’s why it goes on. Pressure from environmental groups should at least help to ensure that damage to public health and the ecosystem is minimised and repaired.
