Raise the Hammer
If we forced oil sands companies to pay the real costs of their activities instead of externalizing them to future generations, the oil sands would very quickly lose their economic appeal.
By Justin Jones
Published January 23, 2014
Recently, Neil Young's Honour the Treaties tour brought the ongoing operations at the Alberta oil sands back into the public eye. For better or for worse, Mr. Young's comments have ignited a debate around the oil sands that I feel really needs to happen in our country.
Mr. Young's critics will attack his primary residency (he spends most of his days in the US), his lifestyle (a rock star is not exactly a scientific authority) and some of the more asinine comments he made (how many times do I have to hear his comparison to Hiroshima repeated?), but they ignore a few of the more important aspects behind these critiques.
While it's true Mr. Young doesn't live in Canada any more, he still feels a connection to this land. That's like telling me I should have no concern for my hometown because I left. Well, maybe I want to move back there some day, maybe I still have people I care about living there, and maybe I just want to see the place succeed because I feel an emotional attachment to it. So that point is moot.
People will say Mr. Young doesn't have the authority or the scientific background to speak authoritatively about the oil sands. That might be true, but in a country where those who do have that background and expertise are increasingly being silenced because what their expertise is telling them is that we're headed in the wrong direction, someone has to speak out.
People will also attack Mr. Young's lifestyle, saying that a wealthy rocker has no right to tell hard-working Canadians what to think. Well, that's a fair point, or at least it would be if our federal government wasn't spending millions of our tax dollars every year to promote oil sands oil both at home and abroad.
Like it or not, celebrities are the only ones with the media clout and the resources to bring the other side of the argument to light in a country where the scientific community is being muzzled and where intelligent debate on this topic is increasingly being silenced.
But all these points aside, the past couple of weeks has brought to light the alarming fact that very few Canadians know what the oil sands are really like. And by that I mean that a very small number of people have actually been there, and have seen them up close and personal.
I have, and I'll tell you it's not pretty.
In my University days, while living in Edmonton, I worked summers as a Vegetation Management Technician, which is basically a fancy way of saying that I sprayed weeds for a living. While it wasn't the most glamorous way to make a buck, the money was good and I got to see a lot of our country that I wouldn't otherwise have seen.
One of those places was Fort McMurray, where I spent two summers spraying on all of the major oil sands sites.
Alberta Oilsands, Fort McMurray (Image Credit: Kris Krüg/Flickr. CC BY-NC-SA 2.0)
I'll try to set the stage for you a little bit, try to give you an idea of what it's like visiting Fort McMurray for the first time.
The first thing you need to know about going to work in Fort Mac is to call a hotel as soon as you know you're heading up and book early. Even though there's dozens of hotels there, the rooms always fill quickly. Oh, and the rooms are also twice as expensive as almost anywhere else in Alberta.
All the parking lots in the hotels in Fort Mac are filled with trucks, generally three-quarter tonne and above. Some, like the spray truck I was driving, are clearly for work. Others, with their massive lift kits and chrome rims, are clearly for play.
At about 6:00 every morning, the exodus from the city begins. A steady stream of trucks funnel north on the highway 63, heading towards Suncor and Syncrude, creating massive traffic jams as the shifts come and go.
As you drive North out of Fort Mac, you can almost forget where you are. The boreal forest is thick along highway 63 for several kilometers, and only the smoke and steam on the horizon offers you a hint of what you're about to see.
Oilsands refineries (Image Credit: Jennifer Grant, Pembina Institute/Flickr. CC BY-NC-SA)
You can drive by the Suncor site, about 15 km north of Fort McMurray, without really realizing what you've gone by - there's a sign by the highway, and the site is separated from the road by a stand of intact forest. But drive a few kilometers further North, to Syncrude's Mildred Lake facility, and everything changes.
As you round the corner on the highway 63 and get your first glimpse of Mildred Lake, the first thing you see on either side of the highway is a large lake. Even in the summer, the lake is shrouded in steam in the morning hours, and you hear loud bangs every couple of seconds. The bangs are from sound cannons, placed around the lake, designed to prevent birds from landing in it.
The lake itself is referred to as a "tailings pond", a name that belies the massive scope of the body of toxic water that lays before you.
Fed by large pipes spewing brown and black muck, the tailings ponds are a toxic soup of heavy metals, petroleum byproducts and other terrible stuff that should have been left underground. It's what is left behind once the oil and sand have been removed from the oil sands, and it's something that the industry still doesn't really know how to deal with.
To get a sense of just how big these tailings ponds are, and how unprepared the industry is to deal with them, wrap your head around this fact: the largest dam in the world is not in China - it's not the Three Gorges Dam, It's in Alberta.
It's the largest dam by material volume in the entire world, and it's holding back Syncrude's Mildred Lake Settling Basin from flowing into the Athabasca River. How many Canadians do you think know that our country is home to the world's largest dam? I'd venture a guess that the number is pretty low.
Oilsands mine (Image Credit: Jennifer Grant, Pembina Institute/Flickr. CC BY-NC-SA)
Once you get on site, the scope of everything is absolutely terrifying. Holding tanks the size of football fields, trucks so big you need to have a ten-foot flag on your pickup just to enter the site so that the drivers can see you from their cockpit, catalytic crackers and separators that dwarf most office towers in Hamilton. Everything is super-sized.
One memory will last with me until my dying day. I remember working out on the tailings sands, looking for Common Tansy, a particularly aggressive invasive species in that part of the world.
The tailings sands are grey, lifeless sand dunes that stretch as far as you can see. They're grey because of the traces of tar, of heavy metals and of other toxic materials left behind by the extraction process. They sit atop places where the "overburden" has been stripped and where the valuable oil sands have been mined out.
Overburden, for those that don't know, is the term the industry uses for the pesky stuff that gets in the way of oil sands extraction. You know, things like soil, trees and vegetation. The things that make up our boreal forest, that support one of the most diverse, fragile and important ecosystems on the planet. That's "overburden".
Boreal forest to Syncrude (Image Credit: David Dodge, Pembina Institute/Flickr. CC BY-NC-SA)
As I looked out across a landscape that was completely alien, I took a moment to collect myself and asses the gravity of this situation. Here I was, where a forest once stood, standing on grey sand dunes that stretched as far as I could see.
Where I did see intact forest, it abutted against a large patch of clear-cut, a patch that had already been cleared of the overburden, waiting for the giant shovels, diggers and trucks to come in and extract the sticky, valuable bitumen from beneath the soil that had been built up over thousands of years, only to be removed for something deemed more valuable by our modern society.
That experience hit me hard. It's stuck with me, especially knowing that the patch of forest I saw is likely long gone since then, the mosses, shrubs, trees and wildlife that called it home even more casualties of an industry that is completely out of control.
Alberta oilsands (Image Credit: Lou Gold/Flickr. CC BY-NC-SA)
People will tout the fact that the oil sands are getting better. They'll tell you that they're remediating land, that they're trying to develop the resources in a way that's as environmentally friendly as possible.
I know some people that work in the industry back home. They're good, intelligent people trying to do right, but they're working in a place that is, to my mind, inherently wrong. First let's talk remediation.
I've seen the land they're remediating, the small patch of land that Syncrude loves to show in their commercials, where a small herd of wood buffalo roam. I've worked on that land, hunting for invasive plant species year after year and either spraying them or pulling them by hand, and I can tell you that the remediation process still has a very long way to go.
It's pure arrogance for any of us to think that we can put things back the way we found them up there. Boreal forest is a climax state - it's a mature ecosystem that takes thousands of years to develop. For us to think that we can ever put things back the way we found them, especially on the scale we're disturbing things, is not only arrogant, but downright delusional.
They've managed to remediate a fraction of one percent of the land they've disturbed in in the Athabasca region, and it's cost them an arm and a leg to do it.
Unless the industry and all levels of government have been saving up some secret, multi-trillion dollar remediation fund that nobody talks about or knows about, I can tell you who is going to get stuck with the bill.
It's certainly not the oil companies, nor is it the people that are sitting in board rooms right now making record profits. It's the Canadian taxpayers, but it will fall on my children's generation, or maybe their children's. And the costs will be devastating.
But that's not being factored in to these arguments right now. The arguments are: "Well, we're getting better at cleaning it up. By the time we're done we'll know what we're doing".
That's like going in for open heart surgery with a surgeon who has never seen a human heart before, but he assures you that he'll figure it out once he has some time to poke around in there for a bit.
In the meantime, we've set aside an area the size of Florida and opened it up for development to the oil companies, in the hopes that one day they'll have the technology, the finances and the desire to remediate all that land and make sure that future Canadians aren't stuck with a smoldering, toxic moonscape where hundreds of thousands of hectares of pristine boreal forest used to be.
Are you starting to understand why I have a problem with this yet?
And on the technology side - yes, things are getting better. Extraction techniques are improving, and in some fields they're able to exclusively use what's called Steam Assisted Gravity Drilling (SAGD) to get the bitumen out of the ground.
These methods don't produce the massive scars of an open pit mine, but they do rely very heavily on massive amounts of water being injected into the ground. It still produces tailings, and also relies heavily on natural gas to heat the water to steam before it's injected, so it's resource intensive as well.
This process is used a lot, but it's not suitable for all the fields, meaning that open pit mining is still the extraction method of choice in many places.
No matter how many innovations we come up with, this process will still invariably be incredibly resource intensive, will result in huge volumes of waste materials, and will result in severe damage to our boreal forest ecosystem.
So even if it gets better, it will still never be environmentally friendly, no matter what the Canadian Association of Petroleum Producers and our federal government will tell you.
Of course, I understand the flip-side of all of this. The oil sands are really one of the economic engines of our country right now, employing tens of thousands of people directly and hundreds of thousands indirectly.
But that's a matter of priorities. We could be employing those skilled tradespeople in retrofitting office buildings, building district energy plants, and building renewable energy infrastructure. Study after study shows that investments made in those areas provides more jobs, more economic impact and more net benefit to society, but that doesn't fit in with the mindset of our current government.
We're very much getting the country we're planning for right now, because the Conservatives have been saying that the oil sands are the economic engine of Canada for so long that we've all started to believe it, like it's some natural phenomenon and not the result of policies that favour petroleum development over all else.
If we forced companies to pay the real costs of their activities, to set aside enough money to actually remediate the land they're tearing up, and to show credibly that they know how to deal with the toxic sludge they're creating day after day without any real oversight, regulation or consequence, then the oil sands would very quickly lose their economic appeal.
But we've externalized all those costs, downloaded them to future generations of taxpayers, in hopes that they will develop the technology and the will to do what we haven't.
To my mind, that's too great a burden to place on future generations. It's too much work to ask them to do, too much money to ask them to spend, and too much risk to ask them to assume for our laziness and unwillingness to look at our lifestyles and our economy with a more critical lens.
If you truly support the oil sands, I encourage you to go up there one day, to visit the sites and see what it is you're actually supporting. Then come back, look me in the eye and tell me that you think we can clean that up, that you're not concerned about the air, the water and the ecosystems of the North, and that those jobs are worth the risk we're exposing our children to.
I've been there, I've seen it, and I know enough to know that it's absolutely not worth it. Not now, not ever, and it has to stop.
By mikeyj (registered) | Posted January 23, 2014 at 17:06:14
Great article.
I went on the hunt in spring 2012 for Canadian mutual funds that avoided investments in the oil sands, and sought advice from three financial advisors on the topic.
It was extremely slim pickings, especially if add you add in the criteria of the fund historically making a average return better than high interest savings account. Even the supposed "Ethical" funds were investing in Suncor.
It's a shame, but most of us are likely supporting the oil sands and don't even know it.
By Pxtl (registered) - website | Posted January 23, 2014 at 17:53:24 in reply to Comment 97115
Scott Adams once said that the surest way to make a buck in investing was to put cash into the companies you found the most revoltingly evil.
In 2010, his advice was to buy BP in the wake of the spill.
http://online.wsj.com/news/articles/SB10...
Although looking at the ticker and the time the article was published, I think he took a bath on that one.
Comment edited by Pxtl on 2014-01-23 17:53:49
By PublicSpacePete (registered) | Posted January 23, 2014 at 18:13:24
Its simple, swap Alberta for Florida. Seriously, apart from whether it should exist or not, which is now moot and nothing to do with Ontarians, we seem not to have taxed the exported tar enough that a) we can set up a national fund so that we all benefit and slow down the inflationary pressures out west and b) it encourages downstream processing. Otherwise it was very educational and Thanks to the author.
By Thanx (anonymous) | Posted January 24, 2014 at 12:31:00
Nicely written Justin.
Have you considered submitting this to the Spec?
By JustinJones (registered) - website | Posted January 24, 2014 at 21:23:26 in reply to Comment 97143
I haven't, no. I'd want to rewrite sections of it. I wrote this fairly quickly, and feel like I left it pretty raw - not nearly as polished as something I would submit to them. Maybe if I have time this weekend I'll polish it up and send it their way.
Thanks for the suggestion!
By AnjoMan (registered) | Posted January 25, 2014 at 15:07:47 in reply to Comment 97179
By all means polish it, but I think it is pretty well reasoned and fair.
By Pxtl (registered) - website | Posted January 25, 2014 at 15:15:35 in reply to Comment 97193
Part of what makes the article so effective are the spectacular photos. Those are licensed CC-BY-NC, which means No Commercial use. This means that the submitter/media would have to contact the three photographers to properly license the photos for use in the newspaper or magazine.
Which isn't insurmountable, but it wouldn't be free.
By mikeonthemountain (registered) | Posted January 25, 2014 at 09:25:26
Great article. I laughed (nervously, I'm actually terrified) at the word 'overburden'. Dang this pesky life supporting planet putting all this forest and biosphere in our way.
It is imperative that we relocate such executives and propagandists to Titan or Io, where they will have infinite supply of petroleum, without turning our Earth into a dead planet that some other species is later figuring out how the previous tenants destroyed themselves.
But we've externalized all those costs, downloaded them to future generations of taxpayers
If collectively as a species we are unable to enforce boundaries around corporate free trade mania, and the get rich quick laziness it breeds, the future human beings are going to have much bigger problems than whether or not they are even still taxpayers. (In my opinion we being indoctrinated into dehumanizing language. We're 'taxpayers' and 'consumers' like locusts in a swarm, rawr!)
Money for remediation - makes sense for a specific site that's already damaged. Or that must be damaged for a good reason. But like OP says, talk of putting a monetary figure on destroying large swaths of Earth's life support systems (not to mention they're the masterpiece of millions of years, unique in a radius of ? light years). Think about the fact that free trade agreements are intensifying this problem worldwide, nations getting sued for trying to protect ecosystems. Other nations, like Canada and Australia, have prime ministers that are relatives of Sauron and just don't care. Our species will be responsible for its own survival until we reach the stars, or our own decline and extinction.
Our species is at a decision node. Do we get our animal habits under control or do we finish consuming the petri-dish.
What would you do with a quadrillion dollars ... on Mars?
By arienc (registered) | Posted January 25, 2014 at 09:36:42 in reply to Comment 97185
Good post. I've often bristled at the enormous insult perpetrated on us by the media in calling the public "consumers".
To me, that is the ultimate insult, as if all we were good for and all we were responsible to each other for is to shop, eat and throw away.
By haj (anonymous) | Posted January 25, 2014 at 13:19:31
wow what an article, so well written. Did you try submitting it to any national media? You should!
By Missing Pictures (anonymous) | Posted January 25, 2014 at 20:15:13
Why is it that when the media show photos of the oil sands in action, they only show photos of the 10%, not the other 90%. If you don't know what I am talking about, then you have not done enough research to understand something better that just about everyone seems to have such strong opinions on.
I care about the environment as much as anyone else, but don't share the opinions here. I happen to know a great deal about the energy business in the world, and specifically Canada. I urge others to read more on the subject, not just what is delivered in the media.
By JustinJones (registered) - website | Posted January 25, 2014 at 22:23:19 in reply to Comment 97201
There is no "other 90%", as you refer to. I'm assuming that you're referring to the less invasive technologies like SAGD and High Pressure Cyclic Steam Stimulation technologies, which don't require open-pit mining. Those currently account for about 35% of production in the tar sands, a far cry from your 90% claim. The vast majority of the oil produced in the tar sands region is still produced the old-fashioned way: Clear cut it, strip the overburden, dig it up, process it, deal with the byproducts at some unspecified time in the future.
And while those technologies might not create devastation on the scale that open pit mining does, they still require massive quantities of water to be pumped underground, removing it from the water cycle, and also require significant input of energy from natural gas to actually heat the water to steam before injecting it into the ground to loosen the bitumen.
So you see, I HAVE done my research. I DO know a lot about the technologies (well, as much as a non-engineer layperson can be expected to) and, more importantly, I HAVE been there. I've been on site at Syncrude's Mildred Lake facility, Suncor's Millenium and Firebag locations, the Joslyn Sands, CNRL's Horizon project and Shell's Jackpine mine, which I'm willing to bet is at least 5 more sites than you've been on, and I can tell you without a doubt that the tar sands operations in each of those locations is filthy, destructive and on a scale that is difficult to imagine.
You say people should do some research, and I'd like to know what, specifically, you would have us read. I'd also like to know where you get the "90%" figure you site from. I sincerely doubt it is backed up by any evidence. Lastly, if you care about the environment as much as anyone else as you claim, I'd like to know how you justify your support for the tar sands. I'd like to know if you have been there, and if you have what your impressions were, and if they conflict dramatically with the first-hand account I've offered here.
I would agree with you that not many people understand what is going on north of Fort McMurray, but where I disagree with you is what side the ignorance errs on. If anything, the media has been guilty of trumpeting the economic benefits of the tar sands, calling it Canada's "economic engine" time and again, while ignoring the economic damages that it is doing to other, equally important and less destructive sectors of our economy. I would argue that most Canadians don't have a full picture of just how bad it is up there, of just how significant the devastation is, and of just how much we are jeopardizing our own environment for short-term economic gain, and I feel confident that if more Canadians had the experiences I have had, of actually going up there and seeing the sites, that there is no way the Canadian public would allow those operations to continue in their current form.
By A Smith (anonymous) | Posted January 26, 2014 at 19:21:33
Since 1950, the price of a barrel oil has remained very stable in price, as measure by gold. In 1950, a barrel of oil cost 2.5 grams of gold. Today, the price is 2.5gms/gold for a barrel of oil.
Average price of ounce of gold in US dollars from 1982-2004 = $350
Current price of gold in US dollars = $1,264
Current price of a barrel of oil = $96.64US
If the Federal Reserve brought back the unofficial gold standard that existed from 1982-2004, the price of oil would fall to $26.76, assuming the 64 year gold/oil ratio remained in place.
According to BMO, production costs for tar sands oil is $50-$90/barrel.
In other words, the primary driver of tar sands investment is a commodity bubble created by cheap credit.
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