The Price of Sand

I've commented before about how costly it is to obtain oil from unconventional sources, such as oil sands (actually bitumen). The Globe and Mail, from Canada, offers this article that recounts the impact on water from the oil sands operation. This is not a pretty picture and the costs appear to be staggering. I have cut some excerpts, but the article is fairly quick reading, and jargon free.

Water is the one resource that we all need. It's destruction impacts the foundation of life across many dimensions, from the water we drink out of a glass to the moisture that nourishes our food crops. The next time some energy executive suggests mining oil sands or the oil shale out West, ask him (or her) if they'd care to share a glass of water from the Athabasca or Mackenzie Rivers in Canada, downstream from the oil sand operations.

What's coming
Schindler predicts that a collision of population growth, drought and climate warming will soon teach "Albertans first-hand what water scarcity is all about." He thinks that rapid oil sands development may well be water's tipping point. While some in the industry agree, many others see shortfalls as another challenging opportunity that calls for technological fixes. "With the pressure on water in northern Alberta, one thing is for sure," says John Robertson, a senior manager with CH2M Hill, the global engineering giant: The industry will have to spend "hundreds of millions in the next few years to treat and reuse water."

The size of the industry
In the last 12 years, the world's most powerful oil companies, including Imperial Oil, Shell, ConocoPhillips, British Petroleum, Total and Norway's StatoilHydro, have all rushed to Fort McMurray to plunk down more than $150 billion in the oil sands. The frenzied pace of investment and construction in one of the globe's last proven oil reserves has created a national project even bigger than the transcontinental railway. The oil sands are the world's largest energy project. Nothing in any sector matches it for capital investment.

Water Usage
On average, the mines consume between three and four barrels of fresh water to produce one barrel of bitumen. Most of the water is heated to separate the hydrocarbons from sand and clay in a process akin to operating a giant washing machine. Although companies such as Syncrude recycle their water as many as 18 times, the industry still procures most of its water from the Athabasca River or from aquifers that feed the river.

Where the Water Ends Up
Some 90% of the water withdrawn from the Athabasca River for the oil sands ends up as waste in tailings ponds. Nearly a dozen ponds line both sides of the river and pose an enduring threat to the entire Mackenzie River basin. Many are already leaking and creating their own tainted wetlands. Even the pro-development Alberta Chamber of Resources considers this primitive form of long-term storage "a risk to the oil sands industry."

The ponds, which contain a ketchup-consistency mix of water, oil and clay, give off a strong aroma of hydrocarbons and rarely freeze. Minnows dropped into the ponds die within 96 hours; unwary ducks get coated by surface oil and drown.

The ponds, like everything in the oil sands, are supersized. The dykes that contain the ponds can reach 100 metres in height. Although the ponds already cover 55 square kilometres of forest and muskeg, they've just begun. Within a decade, they will cover an area of 150 square kilometres.

The Risks of Dyke Failure
The prospect of a major dyke failure has also raised concerns. Every tailings pond contains polycyclic aromatic hydrocarbons (PAHs), napthenic acids, heavy metals, salts and bitumen. The Canadian Association of Petroleum Producers reports that of 25 PAHs studied by the U.S. Environmental Protection Agency, 14 are human carcinogens. Both PAHs and napthenic acids kill fish.

In 2003, the intergovernmental Mackenzie River Basin Board identified the tailings ponds as a singular threat. It noted that "an accident related to the failure of one of the oil sands tailing ponds could have a catastrophic impact on the aquatic ecosystem of the Mackenzie River basin."

The Cost of Recovering the Boreal Lands
The final act of the oil sands process will be reclamation of the land. The mining will eventually dig up an area that is the size of Lake Erie and is largely comprised of boreal wetlands. Wetlands are known as the "kidneys" of a watershed because they regulate flow and remove contaminants. According to Lee Foote, a wetlands specialist at the University of Alberta, no one really knows yet how to reclaim a fen, bog or peatland in the oil sands. He calculates that the cost of replacing the projected 96,000 hectares of mined wetland, depending on the replacement standards adopted, could, at $25,000 a hectare, range between $7 billion and $24 billion. "It's a significant liability if it can be done at all," Foote says.