Sciences, Publics, Politics: A Reckoning for Canadian Oil Sands

From its earliest days, Canada has maintained a resource extraction economy built on trapping, logging, and fishing. Over the past half-century, its wealth has depended heavily on the oil deposits found in the bituminous sands of the western province of Alberta. But Canada, known for its vast stretches of wilderness, is also dedicated to environmental stewardship and stringent environmental regulation, as illustrated by its past and ongoing efforts to curb acid rain and ozone depletion.

Alberta is Canada’s richest province, producing 81% of the nation’s oil, and Canada is by far the United States’ largest source of oil, providing 40% of all imports. The province’s fossil fuel industry, commonly called “the Patch,” accounts for about 7% of the country’s gross domestic product. Alberta’s petroleum reserves, known as the “oil sands,” are estimated to be the third-largest in the world, and more than $300 billion has been invested in their development. Almost all of the federal tax revenue generated by Albertans is redistributed to poorer provinces. In New Brunswick and Nova Scotia, as declines in fishing and logging have decimated the economy, tens of thousands of workers have found jobs in Alberta’s oil and gas industry.

Alberta’s oil sands are composed of bitumen, a thick, tarlike petroleum substance that is attached to grains of sand by a thin layer of water. For decades, extracting bitumen, separating the oil, and transporting it was deemed too expensive to merit large-scale private investment. But by the early 2000s, as the journalist Jacques Poitras recounts in his 2018 book, Pipe Dreams: The Fight for Canada’s Energy Future, government tax credits, along with a designation of the province’s oil sands as “unconventional sources” by the US Department of Energy that allowed global oil companies to list oil sands reserves as assets, helped to significantly boost private investment and incentivize innovations that lowered the cost of extraction.

Alberta-based companies hired the best engineers in the world, writes the journalist Chris Turner in his 2017 book about Alberta’s oil business, The Patch: The People, Pipelines, and Politics of the Oil Sands. These companies thought of themselves as socially responsible tech companies that produced oil, proud of their innovative methods for extracting bitumen and separating the oil for processing. Driven by geopolitics and rising demand from China, oil prices rose between 2004 and 2014, peaking at more than $100 a barrel in 2007, further incentivizing oil sands development. Alberta experienced the strongest economic growth ever recorded by a province. Calgary grew to be a bigger business hub than Vancouver or Montreal, second only to Toronto. In part due to the oil sands, Canada survived the Great Recession in relatively stable fiscal shape compared with other countries.

The carbon bomb

Despite efforts by Patch engineers to maximize efficiency, bitumen remains among the most resource-intensive sources of oil in the world to extract. For every barrel of oil produced, the process consumes half a barrel of oil and two-fifths of a barrel of water. This makes Alberta’s reserves one of the most greenhouse-gas-intensive sources of oil in the world.

The extraction process also requires the clear-cutting of boreal forest, while separating the oil creates massive tailings ponds that mix water, sand, dirt, and clay to create a noxious, gelatinous colloidal suspension that exists for decades. In 2008, 1,600 ducks died after they landed in a tailings pond, triggering worldwide headlines. (A provincial court ordered Syncrude Canada, which operated the pond, to pay a $3 million penalty for the duck deaths.)

The birds-in-the-tailings-pond event became a “proxy for a wider polluted world in conflict,” writes Turner. “In short order the whole [oil sands] industry became the embodiment of climate change itself, the poster child for the whole sinful age of fossil fuels, the face of an invisible global catastrophe.”

Public opinion turned against the oil sands industry, and against the construction of pipelines needed to bring the oil to Canadian coastal ports and the United States. Through public protests and media campaigns, environmentalists and their allies undermined what one oil executive called their “social license” to build new infrastructure. Once largely invisible projects that generated little to no public comment during the approval process were now international spectacles that generated thousands of requests for testimony, multiple lawsuits, and countless delays. Pipeline approval had become the “nexus of the debate about energy,” lamented the executive.

Events in the United States also sensitized Canadians to the perceived dangers of pipeline construction and the extraction industry. First was the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, the largest marine spill in history. A few months later, a pipeline operated by Enbridge, a Canadian company, burst and spilled oil-sands bitumen into the Kalamazoo River in Michigan, one of the largest land spills in US history.

Most significantly, US activists waged a multiyear campaign against the Keystone XL pipeline, intended to carry bitumen from Alberta to refineries along the Gulf of Mexico. The campaign was launched in 2011 with the help of the famed climate scientist James Hansen, who coauthored an online letter calling the proposed pipeline “a 1,500-mile fuse to the biggest carbon bomb on the continent.” The pipeline would increase atmospheric carbon dioxide concentrations by 200 parts per million, Hansen calculated, making it “game over for the climate.”

Experts pushed back against this explosive claim, as Turner details in The Patch. Hansen’s warning referred to the entire known bitumen resources in Alberta, some 2.4 trillion barrels, not the 166 billion barrels of proven reserves that could be extracted profitably and with existing technology. Even if all known bitumen resources could be developed, it would take until the year 3316 to do so, estimated the University of Alberta economist Andrew Leach. A follow-up study published in Nature Climate Change concluded that developing all 166 billion barrels of proven oil sands reserves would likely increase global average temperature by 0.02–0.05 degrees Celsius.

To be sure, the Keystone XL pipeline would increase global greenhouse gas emissions at a time when cuts are urgently needed. But the increases were nowhere near what Hansen and activists claimed. In a New York Times op-ed, Hansen later revised his estimate downward, and said in testimony to the US Congress in 2014 that his initial claim had been “misinterpreted.”

The campaign against the Keystone XL pipeline also created the impression that oil sands development depended on the pipeline’s construction, and that by blocking the pipeline’s approval, activists were preventing industry from exploiting the oil sands. In fact, Keystone XL was only one of several pipeline projects to carry bitumen to market; with others soon in the works. Train cars—riskier and dirtier than pipelines—have taken up the slack. Canadian oil exported by rail to the United States increased tenfold between 2012 and 2014, from nearly 16,000 barrels per day to 160,000. Freight transport declined in 2014 and 2015 as oil prices dropped, before spiking to 196,000 barrels per day in 2018.

But the “carbon bomb” rallying cry stuck and galvanized further news attention. Soon celebrities, including the director James Cameron, the Revered Desmond Tutu, and the actor Leonardo DiCaprio, were visiting the oil sands, flying overhead in helicopters, and meeting with First Nations leaders. During his visit, the rock star Neil Young compared the “wasteland” oil sands landscape to the nuclear bombing of Hiroshima. In the United States, thousands of protestors ringed the White House, calling on President Barack Obama to deny permitting for the Keystone XL project.

Oil industry executives were confounded. In just a few years, the image of the oils sands and their industry had rapidly spun out of control. Executives believed that any environmental assessment needed to compare oil produced in Canada, where regulation was the most stringent, with oil from countries such as Saudi Arabia or Venezuela. World demand for oil was continuing to go up, and the Patch was meeting that demand while investing in innovations designed to cut emissions.

Over the past two decades, the emissions intensity of oil sands operations has dropped by approximately 28%, and companies are required by law to remediate the land after oil sands have been extracted, returning the area to a self-sustaining ecosystem with local vegetation and wildlife. It was far better for global demand to be met by Canada than by other, less responsible countries, oil executives reasoned.

Yet by 2015, according to Turner, some in the Patch also began to doubt whether it would ever be possible to build new pipelines in a democracy divided between those who prioritized climate change and those who prioritized economic growth. Global oil prices had fallen to $50 a barrel, creating a major recession in Alberta, and prices were likely to remain at that level for the foreseeable future. Continuing to transport oil by train, rather than via pipeline, cut into profits. At the same time, renewable energy was becoming cheaper. Recognizing the costs involved, international oil companies pulled out of Alberta, with Canadian companies taking up their holdings. The Patch employs some of the best engineers in the world and oil sands production continues to steadily climb as companies strive to cut costs while limiting greenhouse gas emissions. But for how long?

“In a world with cheap oil, challenging pipeline construction, a shift toward short-cycle investment, and the combined forces of alternative energy innovation and action on climate change, the oil sands are in for a rough ride,” wrote the economist Andrew Leach in September 2019.

Bickering while the world burns

Despite the Canadian government’s commitment to addressing climate change, the nation remains on track to blow past its Paris climate commitment to reducing carbon dioxide emissions. Viewed from this perspective, any triumphs achieved in opposing pipelines, Poitras concludes in Pipe Dreams, have been more symbolic than enduring—“the short-term feel-good activist equivalent of fast food,” he writes.

“The climate crisis took generations to create. It will take a generation or more to solve,” echoes Turner. “It was unintentional, arising from what was understood to be the most vital job of a modern industrial society—fueling its engines. It won’t be solved in a campaign, and the solutions aren’t anywhere near simple enough to fit on a protest placard or a billboard.”

Recent polling in Canada reflects a public that is at once very concerned about climate change, but also unwilling to bear the necessary economic costs of action. Two-thirds view fighting climate change as a top priority, and a similar proportion believe that Canada is not doing enough. But half of Canadians say they would be unwilling to pay more than $100 a year in taxes to prevent climate change, the equivalent of less than $9 a month. Fewer than half say they would be willing to limit their driving or take public transportation, and only a quarter say they would be willing to fly less frequently. Though troubling, these answers should not be surprising: the same poll showed that by a large margin, the public’s biggest policy priority is to curb Canada’s escalating cost of living.

In my next online column, I’ll explore the effect these complex and sometimes contradictory opinions are having on Canada’s federal elections, scheduled to take place on October 21.

Unlike in the United States, Canada’s politics are not infected with doctrinaire opposition to the very idea of climate change itself. But deep cuts in greenhouse gas emissions have remained unattainable. Turner sees a glimmer of hope in the unique political culture of Canada, one that’s rooted in what he calls a “mushy middle ground,” its history defined by compromises and contradictions. “Perhaps Canada’s mushy middle is the best place to build the kind of broad, lurching, jerry-built consensus that long-term action on climate change requires,” Turner writes. And in doing so, Canada could set an example for the United States and other nations.

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Cite this Article

Nisbet, Matthew C. “A Reckoning for Canadian Oil Sands.” Issues in Science and Technology (September 9, 2019).