Clearing the Boreal Forest for Profit

At the beginning of May, I – like many birders – was disturbed to learn of the deaths of 500 ducks in a oil tailings pond in Alberta. The pond was owned by Syncrude, a company with a long record of ducks dying in its waste ponds. Toxic tailings ponds are one of many environmental hazards produced by mining tar sands for oil. The tar sands lie in the midst of the boreal forest, which provides important habitat for many North American bird species and supports the livelihood of indigenous people. Mining the tar sands for oil requires clearing the forest and draining its wetlands. [Update: The Boreal Birds Blog shows where the ranges of two bird species, Canada Warbler and Short-billed Dowitcher, overlap with mineral claims, including tar sands.]

Companies like Syncrude are supposed to restore natural habitat after they have finished mining it for tar. However, the process has been extremely slow; after 41 years of mining, 0.2% of the disturbed land has been reclaimed. Instead, the oil companies and the Canadian government have prioritized clearing and mining the tar sands as quickly as possible.

The 85-page report entitled Fact or Fiction: Oil Sands Reclamation is a critical review of current policies and practices governing oil sands reclamation. The researchers found woefully inadequate reclamation progress, astonishing rates of toxic tailings creation and no proven way to clean them up. The researchers also found that the security deposits made by companies to guarantee reclamation may be inadequate, forcing Canadians to foot the bill for reclaiming vast areas of mined and disturbed boreal forest....

Oil sands mining is transforming northeastern Alberta. By the end of 2007, oil sands companies had cleared or mined more than 470 square kilometres of boreal forest. More than 3,000 square kilometres of boreal forest is already leased for mine development. Meanwhile toxic tailings lakes, already 50 square kilometres in size, are projected to grow to 220 square kilometers — an area five times the size of Sylvan Lake, Alberta.

The full report is available from the Pembina Institute (pdf).

So who profits from razing and mining Alberta's boreal forest? Two-thirds of tar sands oil is destined for the United States, and American companies are the main investors in Syncrude. While other companies were there first, ExxonMobil has pushed them aside and recently installed its own management team to expand mining [link via Gristmill]. This is the same Exxon that still refuses to compensate Alaskans for harm caused by the Exxon Valdez spill.

Why is an American oil company, the biggest in the world, with annual revenue of $390 billion, calling the shots at Canada's biggest oil-sands producer? Syncrude, founded in 1964, when commercialization of the oil sands wasn't economically viable, epitomizes the tangled web of partnerships and deals that is Alberta's energy sector. The company has seven partners, but Syncrude's biggest shareholders are a pair of Calgary-based operators, Canadian Oil Sands Trust and Imperial Oil Ltd., which together own a 61.7% stake. It's through its controlling position in Imperial that Exxon has become master at Syncrude.

The planned expansion at Syncrude from 350,000 bbl. per day to 500,000 bbl. may have been too important for Exxon's future to leave to anyone but the A-team from Texas. "My job is to build a strong operational foundation," says Katinas, whose previous assignments have taken him to Saudi Arabia, Singapore and the U.K. In addition to Syncrude and Imperial, the biggest operators in the oil sands are Suncor Energy Inc., a Canadian-owned company, and Albian Sands Energy Inc., a joint venture of Shell, Chevron Corp. and Marathon Oil Corp. This tight clutch of companies accounts for 75% of all production in the oil sands.

Time seems blissfully unaware of the environmental problems caused by excavating and processing tar sands for oil. Instead it describes the industry's potential in glowing terms, as "Venezuela north – without the loopy President and the deadweight national oil company as unwanted partners" and "the new Saudi Arabia ... right on the U.S. border." While the article makes a brief reference to a Greenpeace protest and greenhouse gas emissions, it brushes such concerns aside.

Tar sands oil is one of several dirty fuels being promoted to reduce U.S. dependence on oil from Asia and South America. Like liquid coal, tar sands oil requires much more energy and water to produce than traditional crude oil. Again like liquid coal, fuel derived from tar sands also produces higher amounts of greenhouse gases when it is burned. Tar sands oil contributes too much to climate change and entails too much wanton habitat destruction to be a serious long-term energy source.