Environment, Energy and Economies - A Canadian Primer: ENVIRONMENT ENERGY AND ECONOMIES IN CANADA - Ray Hamm

A few companies account for more than half of Canada’s crude oil production: Suncor, Canadian Natural Resources, Imperial Oil, and Cenovus. (Husky and Cenovus have recently combined. Hong Kong billionaire, Li Ka-shing will hold approx 27% of the new Cenovus.) The oil industry in Canada has taken a hit. Larger external factors are more significant than pipeline delays and environmental regulations. (For example:  international oil prices collapsed.)

If Canada would reduce production of petroleum, one of the first options should be to shut down the oil sands in Alberta. 

Why start with the oil sands?  why not share cutbacks across the country?

The oil sands produce 12% of Canadian Green House gases. Even with newer technology the GHG production of the oil sands is increasing every year due to increasing petroleum production.

It costs more energy to produce a barrel of oil from the oil sands than from other sources. Oil sands technology has gotten more efficient but it is still not near international averages for petroleum production.

The environmental impact on land and water of mining petroleum in the tar sands is huge, It is true that Alberta has very stringent regulations for these operations - very nice. But it is even more true that they do not enforce them and there is not even a theoretical solution to returning the land and the water to its original state. The tailing ponds (waste from the mining) are HUGE and getting larger, there are too many chemicals in the sludge. Water used in the oil sands can be reused, but only small amounts of this water can be returned to the natural cycle. Macleans did an excellent article in October 2019, “Scrubbing the oil sands’ record,” sorting through the different ‘facts.’

There would be many and far-reaching consequences of shutting down or even just reducing oil sands production of crude oil.

Crude oil is 47% of Canadian energy production (if uranium is excluded - that is the international standard). Tar sands produce 63% of Canadian crude; Alberta produces 80% of Canadian crude.

Currently Canadian crude oil is 22% of US refinery intake - that means oil sands oil is approximately 10% of US refineries. Canada would have to juggle internal needs and external trade. Crude oil brings approximately $90 billion annually to Canada’s trade balance.

Petroleum is 5% of the Canadian GDP   More than half of this is from production in Alberta.

The energy industry - petroleum, natural gas, electricity, coal, renewables - provide almost 5% of the jobs in Canada, again with a large portion in Alberta.

If the oils sands reduce and shut down production, companies ( and governments) would be walking away from billions of dollars in investments  $325 billion has been invested to date. That is a lot, but consider the context. From Offshore Technology: Top ten oil and gas company annual revenues, #1, $424 billion, down to #10, $140 billion. Some major global investment firms and international insurance companies are pulling back from the petroleum industry.

So yes, reduce production of fossil fuels, reduce production of oil sands petroleum/crude oil. Share the load. Plan for a 3-5 year transient period.   Start now!

This is only one piece of the industry in one country. Imagine the international interconnections of the fossil fuel industries.

We must do this. We can do this, for our grandchildren and for the Earth.

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