Canada, US in a sticky situation with tar sands

By Geoffrey Murray Source:Global Times Published: 2013-12-26 21:18:01

Illustration: Lu Ting/GT

Just when we're supposed to be focusing on clean renewable energy sources, temperatures are rising in North America over plans to return to traditional pipelines to tap vast deposits of dirty fossil fuel.

Oil sands (bituminous sands, technically)?are extremely heavy crude oil deposits hardly touched so far; loose sand, sandstone and clay are saturated with what looks and smells like the tar (bitumen) with which we're all familiar. 

Unconventional mining techniques allowing deeper digging have now improved the economics of extracting the huge deposits in the Canadian province of Alberta.

The main focus is Athabasca, a 141,000-square-kilometer area of coniferous forest and muskeg in northeast Alberta, with three separate oil pipeline projects - one already operating and likely to be expanded, and two on paper. All three face fierce environmental opposition.

After 18 months of hearings, Canada's National Energy Board Joint Review Panel recommended approval of Enbridge Inc's proposed $7.4 billion Northern Gateway project to move 525,000 barrels a day over 1,178 kilometers of rugged mountains to a new loading terminal on the northern British Columbia coast at Kitimat.

There, it would be shipped to thirsty markets in Asia, such as China, Japan and South Korea. On paper all this looks like a good idea as these big Asian consumers have been shopping as far as West Africa and the UK for assured energy supplies. The new shipping route would also avoid the piracy threat facing tankers off the Middle East and Southeast Asia.

The Canadian government has until next July to decide the issue.

The current idea is to build twin pipelines. The Athabasca product has very high viscosity - in other words, it's very gooey. The eastbound pipeline will carry imported hydrocarbon?natural gas condensate?that will be used to "dilute" the bitumen and make it easier to move down the westbound pipeline to Kitimat.

The idea has been around for some years but has repeatedly been postponed for various technical and environmental reasons. Indeed, in 2006, PetroChina was a potential big customer until it withdrew due to the lack of progress.

Environmentalists and aboriginals living in the remote area oppose the project, fearing a spill could damage the pristine coastline that includes premier salmon-bearing rivers as well as the habitat of a rare white bear and the native caribou. No pipeline is leakproof, they argue, and the product being carried would pose huge cleanup challenges.

Equally, in an era when governments are promoting energy conservation, there is no doubt that processing oil sands uses more energy than conventional oil refining.

One reason Northern Gateway is back on the agenda is because of prolonged problems with a similar pipeline project: TransCanada Corp's Keystone XL project to pipe the bitumen from Alberta down the spine of the US to refineries in Texas for processing.

The southern section of the $5.4 billion pipeline, from Texas to Oklahoma, is under construction. However, President Obama is hesitating to give final approval due to huge opposition based on accusations he is reneging on his promise to focus on renewable energy.

However, there is already one pipeline in operation, and many in the oil industry see its expansion as the best solution for tapping the potential of the Alberta oil sands.

For decades, the Trans Mountain Pipeline has been carrying a wide range of refined and unrefined oil products across the Rockies to Vancouver and also to the Puget Sound area of Washington State in the US.

The company that owns the pipeline, Kinder Morgan, now wants to more than double the capacity of the pipeline to 750,000 barrels a day for shipment directly to world markets.

The biggest obstacle, however, is the very severe restriction imposed by the port of Vancouver on tanker movements at present that would quickly create huge backlogs of oil on land.

Much of the opposition to the pipelines has focused on the environmental threat of spills and greenhouse gas emissions along the routes. However, the real threat may lie back at source in Athabasca.

The industry uses fresh water heated or converted into steam to separate the viscous oil from the Earth. This is currently being drawn from the Athabasca River and local groundwater reservoirs at rates environmentalists believe are unsustainable, heralding a future ecological disaster.

The author is a lecturer with China Foreign Affairs University. bizopinion@globaltimes.com.cn

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