Introductory remarks
With the depletion of crude oil deposits across the world becoming a reality with every new day, the world has been forced to start looking at alternative sources of oil. One of these unconventional sources of oil is the bitumen oil found in oil sands. Canadian oil sands have been identified as the second largest oil reserves in the world after those in Saudi Arabia. Most of these oil sands are found in the province of Alberta. These oil reserves are estimated to be an approximate 175 billion barrels of bitumen and sit across an area of 140,800 square kilometers (Dyer, 2009). The bitumen is extracted by mining methods or drilling, depending on the depth of the oil reserves. Each of these two methods presents its own challenges. The energy reserves in Alberta oil sands need to be extracted, but safer and more environmental friendly technology and policies need to be innovated to ensure the sustainability of the oil sands operation.
Assess the development and future outlook of Alberta Oil
The oil extraction of the oils sands in Canada is facing severe challenges which are in need of new technology to avoid jeopardizing the newly found source of oil. The cost of natural gas has shot up since Canada began extracting oil from the oil sands. Natural gas supplies across the world are believed to have hit their peak and are only expected to decline in the coming years. The oil sands operations in Canada consumes up to 5 percent of the country’s natural gas supply (Isaacs, 2014). It is estimated that the oil sands operation will be using up to 1 billion cubic feet gas on a daily basis. The oil sands operation is overly dependent on water, a factor that has brought concerns between conservation of water and sustainability of the oil sands operation. The amount of energy required to produce a single barrel of the synthetic oil from the oil sands operation is estimated to be a third of the amount of energy found in a single barrel of bitumen. These operations also account for large volumes of GHG emissions as well as carbon dioxide emissions amidst the global concerns of climate change, global warming and the need for countries to adhere to their obligation towards the reduction of these emissions. The investment costs for the oil sands operation is also considered extremely high. A single project that incorporates mining, extraction and upgrading requires up to 3 billion USD to produce 100 barrels of oil a day. The operating cost for a single barrel of oil is estimated at 10 USD (Isaacs, 2014). The project takes up to six years to become fully operational. The oil from the oil sands also faces potential restriction in the future following concerns of the high aromatic content of the oil reserves. The oil refineries in the United States do not have the capacity to mix more than 15 percent of the refined oil with that from the oils sands operations (Isaacs, 2014).
Despite the numerous challenges, other factors have also made the oil sands operations attractive. World oil prices have remained on an upward scale over the past couple of years. The oil sands also present no finding costs as the oils sands are clearly alienated. There are established pipelines which give Canada a ready market for their oil in the United States. Technological advancements have also reduced the cost of production of the oil from the oil sands by at least two factors (Isaacs, 2014).
Technological integration will offer Canada a solution to the numerous challenges that are posed by the oil sands operation. Even with an aggressive energy development project, the current project can only extract 15 percent of the needed oil needs across the world for the next 20 years (Isaacs, 2014). The persistent energy needs across the world, therefore, call for the need to come up with a more integrative system. The energy industry is an interconnected system which is connected both horizontally and vertically. Horizontal connections can be made from the sources of oil while vertical connections arise from the value chain. Canada and the entire world need to focus on multiple sources of energy. Canada sits on other sources of energy which include hydrocarbons and coal (Isaacs, 2014). An example of an integrated system in Canada is found at the Opti-Nexen Long Lake Project (Isaacs, 2014). The project does not use natural gas to extract the oil, but instead, the bitumen is used to produce hydrogen which is used in the extraction of the oil.
Environmental effects of Alberta Oil
One of the leading environmental concerns is carbon intensity. The oil development project is a carbon-intensive one with the estimates of carbon gas that is emitted into the atmosphere ranging between 62 to 164 KG of Carbon dioxide gas for every barrel of oil that is extracted (Dyer, 2009). These rates are even higher when drilling is used. This is over three times the amount of carbon emission from the conventional extraction of crude oil in North America. The emission of greenhouse gasses/ GHG from the extraction of oil in the oil sands is estimated to be five times higher than the GHG emission in the extraction of crude oil. As a result, Canada has already averted from its obligation signed during the Kyoto protocol in 2002, in which the country was expected to cut its GHG emissions by 6 percent from 1999, and has since been accused of obstructing international climate change negotiations.
Water use is another environmental concern. The production of a single barrel of oil requires up to four barrels of fresh water. The companies to which these lands have been leased have been allowed to withdraw up to 590 million cubic meters of water on a yearly basis. This volume of water is enough to sustain 3 million people on a yearly basis (Dyer, 2009). This water is withdrawn from River Athabasca, which fluctuates yearly and seasonally. Withdrawal of water from the river during the low season poses a risk to the aquatic life (Tenenbaum, 2009). After the water has been used to extract the oil, the water becomes contaminated and cannot be returned to the river. Instead, this water is returned in ponds known as tailings.
The tailing where the contaminated water is retained poses another environmental risk. The liquid tailings are considered acidic and also contain uncovered hydrocarbons and metals which make them dangerous to aquatic life. Currently, there are 720 billion liters of the liquid tailing which occupies more than 130 square kilometers of land (Dyer, 2009). None of these ponds has been reclaimed to date. Other concerns include the risk of this liquid leaking underground and finding its way into fresh water sources and soil in the country. There is no clear reclamation plan that is yet to be developed for the liquid tailing.
Potential benefits and benefits of carbon tax in Canada
The potential benefits of raising the carbon pricing include driving down the GHG and carbon emissions in various countries. Provinces are also likely to avert from the oil sands as a source of oil and pay attention to other sources of energy such as fossil. Provinces will be forced to pursue clean technology which will also reduce the emission of other dangerous gasses such as methane into the atmosphere (McCarthy, 2016). The impact is expected to flow down the economy chain and act as a relief for the low-income households who work in these energy-intensive companies.
The carbon tax project presents many benefits. The project offers the future generations wellbeing. The carbon tax will force Canada to adopt more-efficient and regulatory policies. A carbon tax will do away with cost-effective but less effective ways of dealing with carbon emissions and replace them with plans that are more effective such as clean energy which will inspire more innovative technologies in Canada (Morris, 2013). The government of Canada will also get to create a new source of revenue while at the same time coming up with a more effective measure to control the oil sands project, and achieve a reduction in the country's carbon emissions.
Concluding remarks
In conclusion, the oils sands project is necessary due to depleting energy reserves across the world, but the environmental risks and other challenges to the project need to be accessed to ensure sustainability of the resource. One of the major concerns brought up by the project is the emission of carbon and GHG gasses into the atmosphere. The carbon tax is expected to reduce carbon emissions as the tax will apply depending on the amount of carbon emitted into the atmosphere. Companies will be forced to come up with cleaner technologies which enable Canada adhere to its obligation towards climate change and earn more revenue for the Canadian government, while at the same time ensuring the wellbeing of future generations. Innovations and new technology should be used to deal with the challenges to the oils sands operations in Alberta.
References
Dyer, S. (2009, September 22). Environmental Impacts of Oil Sands Development in Alberta. Retrieved from Resilience: http://www.resilience.org/stories/2009-09-22/environmental-impacts-oil-sands-development-alberta
Isaacs, E. (2014, August 8). CANADIAN OIL SANDS: DEVELOPMENT AND FUTURE OUTLOOK. Retrieved from Research gate: file:///C:/Users/JEDDY/Downloads/CANADIAN_OIL_SANDS_DEVELOPMENT_AND_FUTURE_OUTLOOK.pdf
McCarthy, S. (2016, January 22). Canada's carbon challenge: Turning promises into reality. The Globe and Mail. Retrieved from The .
Morris, A. C. (2013, February 11). Proposal 11: The Many Benefits of a Carbon Tax. Retrieved from The Hamilton Project: http://www.hamiltonproject.org/assets/legacy/files/downloads_and_links/THP_15WaysFedBudget_Prop11.pdf
Tenenbaum, D. J. (2009). Oil Sands Development: A Health Risk Worth Taking? National Center for Biotechnology Information, A150-A156.
