Critics: Canada's oil boom an environmental bust

FORT McMURRAY, Alberta — The largest dump truck in the world, parked under a massive mechanical shovel, is waiting to transport 400 tons of oily sand at an open-pit mine in the northern reaches of Alberta.

Each Caterpillar 797B heavy hauler — three stories high — carries the equivalent of 200 barrels of heavy oil worth $23,000 per haul at today's prices.

"It's like sitting on your back porch and driving your house," said Todd Dahlman, the manager of Shell Canada's Muskeg River open-pit oil-sands mine in Alberta's Athabasca region.

Shell, which has 35 of the massive loaders working 24 hours a day, seven days a week, has ordered 16 more — at $5 million each — as it expands its open-pit mines. And it is not alone among major oil companies rushing to exploit Alberta's oil sands, which make Canada one of the few countries that can significantly ramp up oil production amid the decline in conventional reserves.

Shell, Exxon-Mobil, Chevron, Canada's Imperial and other companies plan to strip an area here the size of New York state that could yield as much as 175 billion barrels of oil. Daily production of 1.2 million barrels from the oil sands is expected to nearly triple to 3.5 million barrels in 2020. Overall, Alberta has more oil than Venezuela, Russia or Iran. Only Saudi Arabia has more.

High prices are fueling the province's oil boom. Since it's costly to extract oil from the sands, using the process widely began to make sense only when crude prices started skyrocketing earlier this century.

The enormous amount of energy and water needed in the extraction process has raised fears among scientists, environmentalists and officials in an aboriginal town 170 miles downstream from Fort McMurray. The critics say the growing operations by major oil companies will increase greenhouse-gas emissions and threaten Alberta's rivers and forests.

"Their projected rates of expansion are so fast that we don't have a hope in hell of reducing greenhouse-gas emissions," said Dr. David Schindler, an environmental scientist at the University of Alberta.

Oil-sands operations, including extraction and processing, are responsible for 4 percent of Canada's greenhouse-gas emissions, and that's expected to triple to 12 percent by 2020. Oil-sand mining is Canada's fastest-growing source of greenhouse gases and is one reason it reneged on its Kyoto Protocol commitments. Experts say producing a barrel of oil from sands results in emissions three times greater than those from producing a conventional barrel of oil.

Questions about developing Alberta's oil sands have seeped into the debate in Canada and the U.S. over keeping down the price of gasoline while still protecting the environment.

The Bush administration sees Alberta as a reliable source of energy that will help reduce reliance on Middle East oil. U.S. Ambassador to Canada David Wilkins said the oil sands will define the relationship between the two countries for the next 10 years.

But mining oil sands was criticized by American mayors in a resolution adopted at their annual conference in June urging a ban on using oil-sands-derived gasoline in municipal vehicles. They alleged the oil-sands mines damage Canada's boreal forest — boreal refers to the earth's northern zone — and slows the transition to cleaner energy sources.

Alberta Premier Ed Stelmach said he doubted Americans would accept the resulting higher prices at the pump should the U.S. decide against exploiting Alberta's oil.

The sands provide 46 percent of Canada's oil production, and that's expected to be 80 percent by 2020.

David Suzuki, Canada's most prominent environmentalist, and other critics warn that the environmental ramifications are too dire to ramp up oil-sands production.

Refineries in the U.S. Midwest are retooling and expanding so they can process the thicker oil, raising concerns about more emissions.

Many critics are worried about the amount of water taken from Alberta's Athabasca River. The extraction process uses 2 to 4 ½ barrels of water for each barrel of oil produced, according to the Pembina Institute, a nonprofit think tank.

There are concerns, too, about the tailing ponds next to the river. The ponds contain waste made from the separation of oil from sand. The toxic ponds take up 50 square miles of northern Alberta.

Jeff Short, a U.S. government scientist who studied the long-term effects of the Exxon Valdez oil spill, said if one of the ponds spilled into the river, the impact would be felt for decades — or centuries.

"It would be the equivalent of several hundred Exxon Valdez oil spills," he said.

But the Conservative government doesn't want to get in the way of Canada becoming an energy power. The oil sands have created thousands of jobs and a booming economy in western Canada. Fort McMurray's population has burgeoned from 33,000 in 1996 to 65,000 last year.

High-school graduates can make more than $100,000 driving a truck, but living costs are extraordinary and the quality of life poor. Drugs and prostitution are rampant.