The oil sands are not the only oil reserve besieged by environmentalists. The kerogen beds of Colorado, the conventional oil reservoirs under the Alaska National Wildlife Refuge, and the deposits off British Columbia’s coast are among the many mammoth reserves kept from development by environmentalists.
The “Tar Sands” campaign involves hundreds of environmental groups animated with millions of dollars from a few dozen foundations, corporations, and government agencies. Between 2006 and 2011 these groups planted 4,000 misinformation-laden anti-oil sands articles into the mainstream media.
10% of the oil imported into North America comes through two dynasties, the Irvings and the Pews – both major benefactors of environmentalism. A 2011 US Chamber of Commerce report identified 351 environmentalist activist campaigns blocking specific American energy proposals. The Sierra Club was leading over 100 local campaigns against coal-fired electricity. Solar power industry front man, David Gelbaum, gave the Sierra Club $200 million.
TABLE OF CONTENTS
THE TAR SANDS CAMPAIGN
THE TAR SANDS CAMPAIGN IN CONTINENTAL CONTEXT
The East Coast Refinery Lobby
Other North American Oil Reserves Under Environmentalist Attack
The Frontline of the Second American Civil War: The US Energy Permitting Process
(The environmentalist phrase “tar sands” is a pejorative misnomer. Tar is a by-product of coal oil. Bitumen, or “pitch,” is dense petroleum.)
Athabasca-area aboriginals waterproofed their canoes with bitumen. European explorers of the Athabasca River stumbled upon bitumen pools that a 20-foot raft pole could not reach the bottom of. They found 100-yard stretches of blackened river bank where they would sink into bitumen past their ankles. The water tasted bitter and the air smelled of sulphur.
In 1888 the Canadian Senate learned the Athabasca valley held one of the world’s largest petroleum deposits.
In 1893 the Commons authorized a geological survey of the petroleum resources of the Athabasca Sands. Initially, the Sands were eyed as a source of asphalt.
In 1915 the Mellon Institute refined 99.7% pure bitumen by boiling raw Athabasca sand in acidified water, then pressing the froth through a sieve. Similar processes are used today.
In 1930 the Canadian Northern Oil Company began working an oil sands lease (now Syncrude’s site).
In 1950 J. Howard Pew’s Sun Oil began drilling along the Athabasca.
The Great Canadian Oil Sands Ltd. (GCOS) was incorporated in 1952 and recruited two other Sands-active companies within a year. Pew bought into GCOS in 1954 and attained majority ownership in 1963.
In 1959 Oklahoma’s Cities Service Oil Co. entered the Athabasca arena. In 1962 they formed Syncrude, with Imperial Oil, ARCO, and Royalite Oil, to build a 100,000 barrel per day (bpd) operation with a pipeline to Edmonton.
In 1964 Alberta’s Energy Resources Conservation Board (ERCB), fearing Sands oil might flood conventional oil markets, approved only one Sands plant. GCOS’s $190 million 45,000 bpd proposal beat out the Syncrude bid and another bid from Shell.
On September 30, 1967 a fleet of light aircraft flew 600 dignitaries to Fort McMurray for an inaugural ceremony where they ogled GCOS’s huge bucket-wheel excavators. Production began in 1968 but swooned into a seven-year regulatory and construction nightmare wherein costs ballooned to $240 million.
The ECRB approved Syncrude’s proposal in 1969. Construction began in 1971, but in 1974 ARCO pulled out. The remaining partners informed politicians that, as costs had doubled; they needed a bail-out. The Federal, Ontario, and Alberta governments begrudgingly bought shares in Syncrude. In 1978 Syncrude completed a 50,000 bpd plant and got the go-ahead for a 129,000 bpd, $1 billion expansion.
Shell’s oil sands consortium, launched in the mid-1970s, collapsed along with oil prices in the 1980s. A decade later Shell revived its plan as the Athabasca Oil Sands Project. AOSP’s $5.7 billion, 155,000 bpd plant opened in 2003.
In the seven years prior to 1995, $5.5 billion was spent on oil sands projects. In the seven years after 1995, $24.5 billion was spent.
In the 1980s bitumen mining projects replaced the drag-line, bucket-wheel excavator system with giant shovels and dump trucks.
Today, bitumen less than 75 metres deep is mined. Bitumen below 75 metres is accessed through drilling methods called in situ because steam is used to separate the bitumen underground (“in the site”). The old in situ method, Cyclic Steam Stimulation, is giving way to Steam Assisted Gravity Drainage (SAGD). The first SAGD experiment occurred in 1987. SAGD bitumen hit the market in 2001.
SAGD consists of drilling two horizontal wells, up to 800 metres long, one 5 metres above the other. The drill stems are perforated. Steam injected into the top pipe creates a bitumen-melting steam chamber with a turnip-shaped profile. Gravity drains bitumen to the bottom of this steam chamber along which runs the lower pipe. Bitumen seeps into the lower pipe and is pumped to the surface.
Research is being done on enhancing SAGD by adding solvents to the steam. Collateral research is being done on bitumen-dissolving nano-catalysts and on bitumen-straining molecular sieves. One firm is lowering giant electronic stove elements underground to melt bitumen.
In 2011 it cost $32 to mine a barrel of bitumen. SAGD production costs are around $20 a barrel. (All bitumen needs a $15-a-barrel upgrade before it can be sent to a conventional refinery.)
In 1980, when Canada produced 1.5 million barrels of oil per day, Sands oil accounted for 100,000 barrels. In 2010, when Canadian production hit 2.8 million bpd, Sands oil accounted for 1.4 million barrels.
In 2010 $10 billion was invested in the Sands. $16 billion will be invested in 2011. Oil sands royalties contributed $1.9 billion to Alberta’s treasury last year. The Sands, directly and indirectly, employ 112,000 Canadians.
The Athabasca Sands lie within the 68,000 square-kilometre Regional Municipality of Wood Buffalo, which has Fort McMurray as its largest settlement. In 1964 Fort McMurray’s population was 1,300. Today 77,000 live in ‘Fort Mac’ and 12,000 of them work in oil sands production. Fort Mac’s median household income is $130,000 – one of the highest in the world.
Thanks to Mr W. Kay for notification about this article