Craig Christensen January 2009

What is it?  The world’s largest deposit of heavy crude oil, located in north-eastern Alberta, centered around Fort McMurray.  Composed of thick bitumen, a very viscous form of crude oil, mixed with sand, silica, and other debris.  It contains an estimated 1.7 trillion barrels total of bitumen  Based on the estimate that 10% of the deposit contains recoverable oil, Canada has the world’s second largest oil deposits in the world.  Oil Sands located under 141,000 km 2 of uninhabited boreal forest and muskegs.  Low population and low depth of oil make surface mining viable. 

Mining process  Being close to the surface, surface mining is the most efficient method.  Sand excavated from about 40 m deep, and caustic soda and hot water are added to form a hot slurry.  Mixture is agitated, and fine solids are bound to the air bubbles and removed.  Bitumen is then transported to be converted to synthetic crude.  Used sand is then returned to the extraction site.

Economics of the production  Extensive purification process is costly, compared to operations with purer oil in Middle East  High labour costs further drive up prices.  Estimated cost is about 27$ per barrel, compared to about 1$ in Middle East.  At present time, about 1.2 million barrels are produced per day.

Economic impact in Alberta  Oil prices have played a major part in the economic activity in the area. Between 1996 and 2006, Fort McMurray grew from 37,200 to 79,810 people. Alberta's population growth rate has doubled in general compared to last decade.  The province of Alberta, in 2007, had a per capita GDP of $CAN 74,825 (approx. US$74,000), higher than any province, and about 61% higher than the Canadian average.

Environmental Impacts  The large scale use of water, and heat needed for purification strain the environment, and drain natural gas reserves.  30% of the final crude’s energy used by natural gas in heating water.  Companies use about 1% of the outflow of the Athabasca River.  Surface mining destroys ecosystems on land, and despite efforts to reclaim land, are never fully returned to their original health.  Oil production is a major source of toxic and greenhouse gases.  115 kg of carbon dioxide emitting during refining of one barrel of oil sands crude.  Alberta’s Oil Sands account for 3% of all of Canada’s greenhouse gases.

Public Reaction  Environmental issues have been heavily criticized by many groups.  Obama’s environmental policy plans to cut imports of foreign oil   “Canada has no cohesive energy policy. Nor does it have a cohesive environmental policy. Put the two together, and you get the tar sands of Alberta, in all their hideous glory.” ALANNA MITCHELL   Indigenous groups of the area have been outraged by the lack of stewardship for the environment, and the health issues concerning surrounding inhabitants. 

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