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Petroleum industry

Canada's Oil Sands: A Tense Balance between Energy Security and Environmental Sustainability

Strategic Insights

— 2 min read

Canada's oil sands hold a vital place in the ongoing debate between energy security and environmental sustainability. With the second-largest petroleum deposits after Saudi Arabia and the biggest in the Western hemisphere, Canada has become the biggest foreign oil supplier to the United States, accounting for 19 percent of imports in 2008. However, the development of these sands in the Alberta region has been sharply criticized by ecological groups, local communities, and even Catholic bishops for their impact on the environment and intensive use of water and natural gas.

Key Takeaways:

  • Canada's oil sands produce 1.3 million barrels of oil a day, up from 600,000 a day in 2000, making it the biggest foreign oil supplier to the United States.
  • The growth in oil sands is the reason Canada has failed to contain its greenhouse gas emissions in recent years despite its commitments to do so.
  • Critics refer to the bituminous deposits as tar sands, calling them the dirtiest fossil fuels on earth.
  • Producing fuels from oil sands requires large amounts of natural gas and water and produces large quantities of waste material and carbon dioxide.
  • The Canadian government is urging the Obama administration to exempt oil sands from greenhouse regulations in the United States.
  • If economic growth pushes up oil demand and prices rebound, oil sand production could rise as high as 6.3 million barrels a day by 2035.
  • On the other hand, stringent regulation, weak economic growth, or low energy prices could trim investments and result in production of as little as 2.3 million barrels a day within the next two decades.
  • Producing oil sands emit 30 to 70 percent more greenhouse gases than the average oil consumed in the United States, but once the total life of the fuel is considered, oil sands emit only 5 to 15 percent more greenhouse gases than average fuels consumed in the country.
  • The CERA report recommends more research to reduce the use of natural gas in the production of oil from sands and investing in technology that captures and stores carbon dioxide underground.

Statistics:

  • 1.3 million barrels of oil produced from oil sands per day (up from 600,000 a day in 2000)
  • 19 percent of U.S. imports in 2008
  • 60 percent drop in oil prices since their peak last year
  • More than 70 percent of proposed heavy oil projects postponed due to the recession and drop in oil prices
  • Oil sand production could rise as high as 6.3 million barrels a day by 2035 or fall as low as 2.3 million barrels a day within the next two decades
  • 30 to 70 percent more greenhouse gases emitted from producing oil sands than the average oil consumed in the United States
  • 5 to 15 percent more greenhouse gases emitted from oil sands once the total life of the fuel is considered
  • 70 to 80 percent of total emissions come from the combustion of refined products, like gasoline and diesel, irrespective of their source

Sources:

  • "Canada's Oil Sands: A Tense Balance between Energy Security and Environmental Sustainability" by IHS CERA, an energy consulting group
  • James Burkhard, managing director of IHS CERA's global oil group
  • Matt Price, analyst at Environmental Defence in Toronto
  • "A view of an oil sands pit, a controversial source of energy, near Fort McMurray in Alberta." (PHOTOGRAPH BY EAMON MAC MAHON/ASSOCIATED PRESS)

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