Everything You Need to Know About the Environmental and Social Impact of the Alberta Oil Sands - and What You Can Do About It
What are tar sands?
The Alberta oil sands are one of the largest remaining oil reserves on the planet.
Unlike conventional oil deposits which feature liquid oil captured in porous rock, the oil sands are sand formations embedded with a thick, sticky oil called bitumen.
How are oil sand extracted?
Conventional oil is able to flow in porous rock and be pumped out as a liquid. Bitumen, on the other hand, must be extracted from the sand by industrial processes involving a great deal of heat and pressure.
This requires a large amount of energy, mostly natural gas, which is why the oil sands generate a far higher level of carbon emissions than conventional oil fields. Why are oil sands bad? In short, it takes a lot of energy resources to extract the oil making the oil sands the lowest grade large oil resource currently in production.
The Oil Sands – Another Example of Reckless Exploitation in Canada
The high cost of production and the enormous legacy costs of cleanup makes the oil sands a large money-loser in the long run for Alberta and Canada. High emissions and large tailing ponds make the oil sands an environmental negative from the start.
The oil sands are a seductively large and accessible resource. In some places, it is possible to dig the oil-laden sand out with a shovel. But it has very high processing and legacy costs, which have made it a money-loser over the past 20 years given the fluctuating price of oil. Not only do the Alberta oil sands have a negative environmental impact – they don’t make sense economically.
The oil sands industry may turn a lot of dollars but is likely to continue losing money in a world determined to move away from fossil fuels. On-going small scale oil sands production in Alberta may be a strategic option for Canada, but large scale expansion is throwing good money after bad – without even beginning to count the environmental impact.
What is EROI?
EROI stands for Energy Returned on Energy Invested. In simple terms, this has to do with the amount of energy that something yields compared to the amount of energy it takes to extract it. It is a much more comprehensive metric than a measurement in dollars. See our EROI video which explains this critical metric.
Key Facts About the Alberta Oil Sands & Oil Production
In the Alberta Oil Sands:
- It takes the energy equivalent of one barrel of oil to extract and produce four barrels of oil for an EROI of 4:1. (EROI – Energy Returned for Energy Invested)
- In oil’s glory days, oil from the rich virgin Middle East and Texas fields returned 100 barrels for every one input – a staggering EROI of 100:1. But technology has been unable to keep pace with resource depletion and the world average EROI continues to decline.
- Currently, the world average conventional oil field yields 17 barrels of oil for every barrel equivalent of energy consumed in production. (EROI of 17:1) – in stark comparison once again to the very low 4:1 ratio of the Alberta oil sands
- The amount of bitumen contained in a cubic metre of the oil sands is about 1 barrel.
- Conventional oil fields yield up to 20 percent of the oil in the ground.
- Up to 50-60 percent of bitumen in the oil sands can be recovered by heating the sand in place and draining it off once it is liquefied. This is called the in-situ process.
- In Alberta, the oil sands mining process recovers more than 90 percent of the bitumen in a much more complex process that involves digging up and transporting the sand to a processing facility, costing even more time, chemicals and resources
Before committing so heavily to an undertaking like the oil sands, public policymakers should have put aside their fascination with dollars and given the project a full lifecycle biophysical economics review. The environmental and economic impact of the oil sands is just too critical to ignore.
The basics through this real physical world lens would have flagged the very low and uncompetitive EROI relative to all world producers, the landlocked geography of the resource, the high emissions in production and the massive cleanup costs.
The Alberta oil sands have a direct environmental and economic impact. Canada’s resource development policy should be based on full lifecycle social, environmental and economic costs and benefits, rather than on the ability of powerful interests to mould public policy through large media advertising budgets and political donations.
Alberta Oil Sands - 5 strikes and you’re out!
The Oil Sands have:
- A World low EROI
- High emissions
- Extreme legacy costs to be borne by taxpayers
- High cost well above foreseeable oil price levels
- Financially destabilizing for Alberta and Canada
Why are the Oil Sands Bad??
While this might seem like an overly simplistic question, it’s clear that many Canadians just don’t understand the environmental and long-term economic impact of the Alberta oil sands.
As you can see from the facts on the main page, the oil sands have a world low EROI. The extraction process comes at a high cost, both in terms of finance, resources and emissions. Economically, the cost is well above foreseeable oil price levels. This does not bode well for Alberta or, for that matter, the rest of Canada.
As you can see from the facts on the main page, the Alberta oil sands have a world low EROI. The extraction process comes at a high cost, both in terms of finance, resources and emissions. Economically, the cost is well above foreseeable oil price levels. Aside from the environmental impact of the oil sands, the numbers long-term simply do not add up. This does not bode well for Alberta or, for that matter, the rest of Canada.
The oil sands in Alberta currently contain approximately 165 billion barrels of accessible oil. This is enough oil to supply current requirements in the USA for about 23 years. In Canada alone, it could last for hundreds of years or longer, given the rapid pace of the electrification of our ground transportation fleets. Electrification of large scale, long-distance air transport may not become viable for generations though.
Most people just aren’t aware of the oil sands’ low economic viability. This is just one of many hard facts about the Alberta oil sands that go ignored. In early 2021, the production rate stands at around 3.1 million barrels per day, giving the oil sands a lifespan of 145 years. At a projected rate of 10 million barrels per day, that lifespan drops to under 50 years. But the oil sands only become a truly viable resource when the legacy costs begin to drop. As long as legacy costs continue to increase, the case for the Alberta oil sands as a socially positive enterprise simply does not exist.
Canada has sufficient natural gas to extract and process all of the oil sands – but is that how we want to apply this cleanest of fossil fuels? Natural gas plants have the reaction speed necessary to act as the base load for an electrical grid system transitioning to high variability renewable sources. Natural gas plants can quickly respond to fill the gaps left by the variability of solar and wind generation.
The only other fast-reacting source is hydroelectric power, and Canada does not have enough potential sites to make 100% renewable energy reliable with the current number of people we have in the country, much less a growing population.
With natural gas plants, a stable population and an aggressive drive to electrify the economy and invest in renewable energy, it will be possible to reduce our carbon footprint by as much as 85%. Do the Alberta oil sands fit anywhere into this plan? What do the facts really tell us?
Environmental and Economic Impact of the Alberta Oil Sands
Development of the oil sands has resulted in the creation of huge tailing ponds, creating damage for which there is currently no known method of 100% remediation.
The environmental impact is unthinkable. As of 2020, 5% of the Alberta oil sands have been exploited and current cleanup liabilities for the Canadian oil industry as a whole are estimated to be $60 billion to $260 billion. Against this, the Alberta and Canadian governments are holding less than $2 billion in security deposits. In short, this leaves the bulk of the problem with Canadian taxpayers.
This begs the question: will Canadians be willing to spend literally billions of dollars to clean up these sites – or will they be forever left as a toxic wasteland? The oil sands are simply not the answer for Canada and the generations yet to come.
In the above figure, the total energy content of the natural gas and oil is 1000kWh + 3325kWh or 4325kWh. The power delivered to the wheel is 838kWh for a system efficiency of 19%. The rapid electrification of the ground transportation fleet will dramatically reduce the demand for oil in developed countries.
Biophysical Economics: A Long-Term Outlook
The Alberta oil sands are essentially a boom and bust industry with a highly questionable long term future. They are simply not a suitable resource on which to build a broad-based economy and a sustainable future. Our future must be based on biophysical economics, which is to say the reality of our physical world and our demands on it.
To fully appreciate how expensive and marginal the oil sands are, please look at this graph from Rystad Research. It shows the comparative extraction costs for major oil plays. Environmental costs are not built into this chart.
Canada and Alberta need to have broad economic bases and employ biophysical economics to assure high levels of stability and resilience. If a government’s operating budget is substantially based on oil royalty revenues, the social safety net will suffer severe cuts with the whiplash effect of resource-based revenues.
Coal faces the same problem – it is an environmental pariah and market prices are highly unstable.
With the profits flowing to corporations and the long term costs being borne by the public, the Alberta oil sands are not a sustainable resource and their environmental impact will be borne for generations. We need to modernize to a process based on biophysical economics which accounts for all costs and allows only those developments which meet the bar of both long-term environmental health and public revenue viability.
If Canada became a sustainable society with a stable, broad-based economy, the oil sands would only be used to fill needs absolutely requiring gasoline or diesel fuel, and they would therefore have a productive life-span of many centuries.
If Canada hopes to achieve sustainability through biophysical economics, it will have to reject the blind pursuit of growth of the commercial economy and conserve its non-renewable resources, rebuild the health of its renewable resources and focus on investing in the health and development of its people.
- CBC News – Oil sands pollution levels may have been underestimated
- Pembina – Measuring the land disturbance, air quality, water use, greenhouse gas emissions, and tailings production associated with each barrel of bitumen production
- The Globe and Mail – Two other studies since 2010 have shown increased levels of mercury in the oil-sands region
- Roby Nallan – Canada’s Marine Oil Spill Preparedness and Response: An Assessment