A crude reality: Canada's oil sands and pollution

by Anna Hopper

The United States and Canada enjoy one of the largest trading partnerships in the world, with energy serving as a vital component of that relationship. Canada exports 1.96 mm barrels of oil per day to the United States, according to the Energy Information Administration. While Canada also supplies a large amount of clean hydropower to northern US regions, oil exports to the United States are both more substantial and, recently, more controversial.
A large portion of Canadian oil coming to the United States is extracted from the oil sands in Alberta at high cost to the environment. With climate change becoming a vital global issue, many US leaders have begun to criticize Canada for sanctioning the dirty oil extraction process. Although this criticism has not yet translated into a serious decline in the US-Canada relationship, Canada will have to improve its environmental standards for the oil sands in order to maintain healthy dealings with its southern neighbour.

With over 170 bn barrels of recoverable oil known, Alberta's oil sands contain the second largest proven reserves in the world, behind only Saudi Arabia. But this Canadian oil is trapped in a tar-like substance known as bitumen. Until recently, these resources remained relatively untapped, due to the fact that extracting crude oil from the sands is much more expensive than drilling for conventional crude oil. However, with the recent spike in oil prices, extraction from the sands has become profitable, and oil companies are seizing the opportunity.
In July 2008 they extracted 1.3 bn barrels of heavy crude oil per day from the sands. Unfortunately, the environmental costs of this extraction are just as high as the profit being made.

Because the oil in the sands is low grade crude, extracting and refining one barrel of it requires three times as much energy as producing a barrel of conventional oil, and releases three times as much carbon dioxide into the atmosphere. At the same time, side effects of increasing oil extraction, including vast deforestation, also contribute to ever-growing emissions. The area is now the most rapidly increasing source of greenhouse gas emissions in Canada.
Furthermore, washing the bitumen to separate the oil and sand wastes over 12.7 bn cf of water per year. This results in both a lack of local water resources and a large amount of water pollution. Reports have also surfaced of deformed fish in the toxic lakes surrounding the extraction area.

These huge environmental impacts are drawing the attention not only of environmentalists but also of leaders in the United States. Both 2008 US presidential candidates, John McCain and Barack Obama, spoke out against the purchase of environmentally dirty energy from sources like Alberta's oil sands.
Arnold Schwarzenegger, governor of California, signed an agreement to limit oil imports from producers with large carbon footprints. Furthermore, 1,000 US mayors banded together and agreed to refuse imports of oil refined from areas with unusually high greenhouse gas emissions, like Alberta's oil sands.

In response to such criticism, the Canadian government has attempted to provide solutions. In 2007 Alberta became the first region in North America to pass legislation limiting the greenhouse gas emissions of "large industrial facilities," with the goal of eventually reducing emissions by 12 %.
In mid-2008 the Albertan government announced plans to invest C$ 4 bn in cleaning up the area. Half the money is going toward improving public transportation services, while the other half is being spent on investigating more environmentally-friendly technology like carbon capture and storage.

But this investment is not enough to overcome the effects of continual expansion, especially when a definite plan for the incorporation of greener technology has not yet been developed. Because a complete halt of oil extraction is unrealistic, the most feasible reform would be a moratorium on expansion until greener technology is implemented. As long as expansion outpaces the installation of greener extraction techniques, however, the area will continue to be a major greenhouse gas emitter.
The environmental impacts of the oil sands could cause a rift in the US-Canada trading partnership. Much depends on whether the United States chooses to privilege environmental standards over energy security. In the short run, the United States will likely continue to import some of Alberta's oil-partly due to national security concerns about the stability of other oil-exporting countries.

But the issue is much more uncertain in the long run. If the United States continues to prioritize energy security, then oil imports from Alberta are unlikely to change. However, if the United States raises environmental standards or adopts a cap-and-trade system, as many leaders have suggested, then those imports would be affected.
Oil industry representatives have argued that under those circumstances Alberta would prefer to sell its oil to countries without such strict regulations. But the issue may be complicated if Canadian Prime Minister Stephen Harper follows through on a campaign promise to stop oil exports to countries with low emissions standards. If Canada is no longer able to export to nations like China, then it likely will have to meet whatever environmental standards the United States sets.

Finally, both countries must consider the effects of a potential "second Kyoto Protocol" that implements worldwide regulations on greenhouse gas emissions. Such an agreement would effectively force Alberta either to stop extracting oil from the sands or to utilize greener but more expensive technology.
Clearly, the future of the oil sands is muddy. But as long as the issue of global warming remains in the forefront, Canada would be well advised to continue its good work and improve upon its environmental regulations for Alberta's oil sands.

Anna Hopper is a staff writer at the Harvard International Review.