|SocialismToday Socialist Party magazine|
Canada’s Arctic wasteland
ITS ADDICTION to oil drives the world capitalist economy to ever more devastating destruction. And the new oil rush in the Canadian province of Alberta is ripping up an area of land bigger than England. The prize is huge amounts of crude bitumen held in tar sands.
The Athabasca deposit is the largest reservoir of crude bitumen in the world and the largest of three major tar sands deposits in Alberta. The three together cover 141,000 square kms. They contain around 1.7 trillion barrels of bitumen. At least 170 billion barrels were considered to be economically recoverable at 2006 prices. That makes Canada’s total oil reserves the second largest in the world, after Saudi Arabia. They are 40 times as big as those in the Gulf of Mexico. (The Economist, 21 January)
Getting to the bitumen requires bulldozing boreal forest and muskeg (peat bogs) to create vast open-pit mines. Four-hundred ton trucks take the ‘pay dirt’ to separation plants, where it is crushed and diluted until bitumen can be skimmed off. The residue, known as ‘tailings’, is made up of sand, unclaimed bitumen, water, clay and contaminants. Lakes of this toxic waste have been left to fester for years.
The sites operate 24 hours a day, 365 days a year, and the intention is that they will do so until the oil runs out – in a projected 200 years time. Extracting it requires huge amounts of energy, including natural gas – a greenhouse gas. According to a recent BBC2 programme, Arctic with Bruce Parry, it takes a barrel-of-oil’s worth of energy to produce two barrels, and the Athabasca extraction process is the single largest industrial emitter of carbon dioxide gases in the world.
The key commercial attraction of the Athabasca deposit is that it is shallow enough for surface mining, with 10% of its tar sands covered by less than 75 metres of overburden. The overburden consists of one to three metres of muskeg on top of up to 75 metres of clay and barren sand. The underlying tar sands are typically 40 to 60 metres thick and sit on top of limestone. In short, they are relatively easily accessible with modern machinery.
The first geological study of the tar sands took place as long ago as 1848, by Canada’s former British colonial rulers. In 1926, a hot-water separation system was perfected, the basis of today’s thermal extraction process. However, it was 1967 before a commercially viable operation began with the Great Canadian Oil Sands (now Suncor) plant.
Development was held back by declining world oil prices, and the second mine – operated by the Syncrude consortium – only started up in 1978, following the 1973 crisis when the oil price spike rekindled investor interest. During the 1980s, oil prices declined again leading to retrenchment in the industry. A third mine, operated by Shell Canada, did not begin operating until 2003. Since then, however, oil price rises have led to a rapid expansion of mining operations in the area.
In mid-2006 the National Energy Board of Canada estimated the operating cost in the Athabasca tar sands to be $9-12 per barrel, while the cost of in situ operations – to extract deeper deposits inaccessible by open-pit methods – could be up to $15 per barrel. This compares to operating costs for conventional oil wells which can range from less than $1 per barrel in Saudi Arabia to over $6 in the US and Canada. Nonetheless, with the price of a barrel of oil hovering around $100, mega-profits are to be had.
The oil rush has turned Fort McMurray into a boomtown. From being an outpost of a few hundred people in the late 1950s, mainly fur trapping and salt mining, it grew to 37,000 inhabitants in 1996. Now, the population is 80,000, including over 10,000 living in work camps. Workers are drawn from all over Canada, as well as the Philippines, Mexico and further afield.
Development of the tar sands has resulted in the strongest period of economic growth ever recorded by a Canadian province – the oil-and-gas sector accounts for 31% of Alberta’s GDP. The province’s Progressive Conservative government, the federal administration and establishment opposition parties back the industry to the hilt.
Demand for oil keeps on rising. The International Energy Agency (IEA) believes that global oil demand could reach 110 million barrels a day (b/d) by 2035 – around 20% more than in 2009. It also says that global production of conventional oil is near or at its peak. Therefore, only a significant rise in output from unconventional sources can service the demand. According to this view, bituminous crudes must fill the projected supply gap. Production in Alberta could reach three million b/d by 2020 and, possibly, five million by 2030, placing Canada among the four or five largest oil-producing countries in the world. (The Economist, 21 January)
The US will remain the world’s biggest oil buyer for decades. Therefore, foreign supplies will grow ever more important. For geopolitical reasons, the fact that this can be found in a neighbouring, non-Opec, and relatively friendly nation is considered to be a great bonus to US capitalist interests. Canada is already the US’s biggest supplier of oil and petroleum, supplying nearly a million b/d from tar sand sources. By 2030 – assuming the continuation of profit-driven capitalism – it is estimated that the tar sands will supply more than a third of the US’s imported oil.
The bulk of this bitumen crude goes to specialised refineries in the American Midwest. By 2014, however, IHS CERA consultants calculate that the Midwest’s capacity will have been reached. So, TransCanada aims to build a $7 billion pipeline, Keystone XL, to send 510,000 b/d to refineries in Texas. This will supplement Keystone, an already functioning pipeline of similar capacity which transports oil to Cushing, Oklahoma, and Patoka, Illinois. The plan also includes extending existing pipelines to refineries in Port Arthur in the Gulf of Mexico, giving access to international markets. On top of this, there is a plan to build another pipeline westwards to Canada’s Pacific coast, from which access will be gained to Asian markets.
All of this comes at a colossal cost, of course. The risk of oil spills from the pipelines represents an impending environmental catastrophe. Open-pit mining is gouging out expanses of land up to 140 metres deep. Although the Alberta government requires companies to restore the land to ‘equivalent land capability’, that does not mean that the land is returned to the condition it was before. Often, it is restored to basic agricultural use.
First Nations rights have been trampled into the toxic dirt. The tar sands are located within the boundaries of Treaty 8, signed in 1899 by representatives of the British colonial power and Woodland Cree, Dunneza and Chipewyan people. The First Nations hoped that this would provide some protection for their way of life. As the tar sands were opened up, however, the federal government moved in. Initially, the Fort McMurray First Nations tried to oppose the industry. But in 1963 the government claimed ownership of their lands. Now leases have been sold to over 90 oil companies.
Their age-old way of life has been taken away along with the land. A Fort McMurray First Nations chief commented to Bruce Parry: "I would prefer we had the old way of life but the fact of the matter is the old way of life is gone. It died with my grandfather. It died with our ancestors. It died with oil… and we will never be able to bring it back". They have been economically conscripted into the oil industry, providing services to the tar sand extraction firms. They are even due to start their own oil extraction.
First Nations from Fort Chipewyan on lake Athabasca, 250km north of the tar sands, contend that their health has been adversely affected by the pollution in the air and waterways. The Canadian and Albertan big-oil governments deny any link. But they cannot be trusted. They have pursued blatant get-rich-quick policies with regulation so light-touch it is almost non-existent. There is not even a legal requirement for scrubbers to be fitted to processors’ chimneys – a simple measure which would at least cut down sulphur dioxide pollution. It is only after years of campaigning that a new body is to monitor water quality in the province – up to now responsibility has been in the hands of the oil companies.
Alberta’s tar sands epitomise the short-sightedness of capitalism. And the sheer waste – one barrel of oil to get two! The thirst for profits – unplanned and unaccountable – drives the oil based economy at full throttle, pumping out greenhouse gases, fuelling global warming. Land, air and water vital to sustain life are polluted. Whole people’s lives are destroyed. These costs hardly figure on company spreadsheets – they are far too high a price to pay.