Arctic takes brunt in dirty fight over oil

Arctic takes brunt in dirty fight over oil

THE world’s largest untapped oil reserves – in the Canadian Arctic – have become the new front line in the battle between environmentalists and the energy industry.

Shell, a self-styled “green” energy company, is to invest billions of dollars in exploiting the Athabasca tar sands.

Environmentalists say the tar sands are the world’s dirtiest oil deposits and that refining them generates three to four times more carbon dioxide than normal oil extraction.

However, Clive Mather, chief executive of Shell Canada, said rising demand and surging oil prices could not be resisted.

“The deposits are huge, potentially even greater than in Saudi Arabia,” he said. “The time is right to exploit them.”

The Athabasca tar sands are named after the river that runs through them. They contain about 1.7 trillion barrels of oil, of which 175 billion can be reached with existing technologies and another 135 billion could be tapped with technologies under development.

The total of 310 billion barrels would give Canada the world’s largest oil reserves – bigger than Saudi Arabia’s 264 billion barrels.

For Western countries, especially the US, Canada’s oil is a chance to cut dependence on the Middle East but the environmental costs could be huge.

This is because tar sands comprise viscous bitumen and sand, a mixture that can currently be extracted only by digging it out, destroying the overlying forests. The Athabasca region has already been scarred with huge pits, some hundreds of feet deep. Alongside them lie vast ponds that hold the contaminated sands and other residues left after the oil is removed.

Shell, along with Suncor and Syncrude, the other main oil companies in the area, are developing a second extraction method, whereby superheated steam is pumped into the ground to melt the oil so that it can be sucked out as a liquid.

However, both processes, and the subsequent refining, require huge amounts of energy – equivalent to up to 30 per cent of the energy contained in the extracted oil.

Shell and its partners are extracting about 150,000 barrels of oil a day but now want a five-fold expansion to 770,000 barrels. Suncor and Syncrude are each planning similar expansions to about 500,000 barrels a day.

This will require so much energy that the oil firms want to lay a pipeline across 1300km of forest to tap into gas reserves in the Mackenzie River basin in Canada’s far north. There are also proposals to build a nuclear power station near the tar sands.

Such plans are causing alarm among environmental groups such as Britain’s WWF. It has set up an office in Edmonton, the capital of Alberta, to campaign for improved monitoring and restraints on development.

“Tar sands are the worst kind of source for oil,” said James Leaton, WWF’s policy adviser on gas and oil. “Extracting oil takes huge amounts of energy and devastates the local environment by destroying the forest and polluting rivers, lakes and the air.” Leaton and other environmentalists contrast Shell’s operations in Canada with the firm’s public relations, which portray it as the greenest of oil companies.

Privately, however, Shell executives make clear that they are simply doing what oil companies are meant to do: extract oil. They say it is the job of governments to regulate the pace.

In Alberta, little interference is likely from a provincial government with a powerful dislike of regulation. Rob Renner, Alberta’s Conservative Environment Minister, said: “We believe the speed of development is best left to the free market.”

Under Mr Renner, the monitoring of industrial pollutants from the tar sands has largely been handed over to the oil companies. One result is that the Athabasca river, and Lake Athabasca, into which it flows, are widely believed to be heavily polluted.

Medical staff at Fort Chipewyan, on the shores of the lake, have reported a surge in rare cancers.

The decision to exploit such oils is provoking a political backlash, with Arnold Schwarzenegger, the Governor of California, effectively banning them. He has issued a fuel standard, demanding a cut in “carbon intensity”, a measure of the CO2 generated in producing and using the oils.

Ten other American states and the European Commission are considering similar measures.

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