In 2008, 1,600 ducks died after landing on syncrude’s aurora tailings pond, and separate studies in 2009 and 2010 revealed raised toxin levels in the athabasca river near oil sands operations and groundwater contamination. Complaints regarding reclamation surged in 2010, when the first pond was reclaimed, critics cried, “too little, too late.”

This report will first discuss media reporting on tailings ponds, then provide background information about each topic, followed by a short description of what is currently being done to deal with environmental issues and what else must be done in the future. What emerges at the end is, predictably, a mixed bag: some concerns are fair, but others, although motivated by honest environmental concerns, are greatly exaggerated. For example, the bird affair would never have been so overblown if crucial statistics had been presented to the public to provide context. The jury is still out on the water contamination issue, since evidence is conflicting and additional scientific studies are needed to clarify matters. If contamination is occurring, operators will be required to take additional precautions, as new and stricter environmental regulations are already being enforced in Canada. Finally, the industry’s alleged passivity towards the reclamation issue is fueled by misconceptions about how tailings ponds work, and perhaps by ignorance of the sophisticated regulations that define (and enforce) when they must be abandoned.

Tailings Ponds As Portrayed In The Media

In April 2008, hundreds of ducks landed on Syncrude’s Aurora tailings pond, became coated in residual bitumen, and an estimated 1,600 died. Syncrude was found guilty of breaking provincial and federal wildlife laws for failing to deploy adequate deterrence measures to stop the birds from landing on the ponds, and was fined a total of $3 million in penalties. This was the highest total penalty ever imposed in Canada for an environmental offense. Thousands of photos and videos of the suffering ducks hit the newspapers and the Internet, and the tailings ponds became a focal point for oil sands critics. According to Prime Minister Stephen Harper, the dying ducks have tarred Alberta’s and Canada’s image. More recently, a 2010 investigation by Canadian Broadcasting Corporation (CBC) News revealed that a tailings pond belonging to CNRL was leaking, contaminating groundwater. First Nations leaders from the Fort MacKay reserve were featured in the report, and a band councillor expressed worry that animals used as traditional food sources could be drinking from the pond since there are no barriers to keep them away. The ERCB disputed this claim, but the report had made its impact.

The issue of tailings ponds reclamation has been another controversial issue in the headlines. To date, only one tailings pond has been reclaimed, in 2010. One of the reasons why environmental critics target tailings ponds is the very visual way they impact the landscape. They are large and desolate, and remain like that for decades until the land they occupy is eventually reclaimed. Exactly how that will happen is something that continues to worry environmentalists, some of whom wonder whether the land will be lifeless for centuries to come.
We will first look at what tailings ponds are and what problems are associated with them. Then we will see what must be done to ensure that the industry is environmentally responsible, and what is currently being done to reduce the environmental impact of tailings ponds.

The Environmental Issues:

Tailings ponds are an integral component of oil sands surface mining operations, but they are not required for in-situ extraction. Tailings are a leftover mixture of fine clay, sand, water, and residual bitumen after the bitumen is recovered from the oil sands in the extraction process. Approximately 12 to 14 barrels of water are needed to produce a barrel of bitumen in surface mining operations. All of this water and the solid waste from the extraction plants are pumped into man-made containment (tailings ponds) to settle solids from water. Heaviest material – mostly sand – settles to bottom and water rises to the top. Middle layer, – mature fine tailings (MFT) – made up of fine clay particles, remains suspended in water. Tailings are often deposited in discontinued mine pits, when they are available. This helps to minimize the environmental impact, since it reuses areas that have already been disturbed. When in-pit storage is not possible, compacted overburden and sands from tailings stream are used to create above ground ponds by forming dyke walls that are typically 50 to 70 meters high (Figure 1). Tailings ponds serve the dual purpose of storing water and tailings. Eventually the solids in suspension settle, which allows the water to be reused several times. However, not all of the water is recovered and recycled. Of the 12 to 14 barrels of water used, only 8 to 10 barrels are recycled from the tailings ponds and remaining 4 barrels of water remains trapped in fluid fine tailings. Because of this the fluid fine tailings are an essential part of water management because they retain so much water. The trapped water is replaced primarily with fresh water from the Athabasca River, with the remainder from site runoff and mine dewatering.

The existence of tailings ponds can present three main types of risks to the environment: the possibility of birds landing on the ponds, river and ground water contamination, and land reclamation.

First, tailings discharged in the ponds contain residual bitumen, which, over a period of time, accumulates and floats to the surface. Although some operators skim off and recover some of it, a film of bitumen is always present and poses a threat to any migrating bird that may land on the ponds.

Second, after the water in the ponds has been used many times, the concentration of naphthenic acid and salts increases, and with it, its toxicity. Water in tailings ponds also contains several other harmful substances including benzene, phenols, toluene, polycyclic aromatic hydrocarbons, aluminum, arsenic, etc. that exceed ambient water quality guidelines (i.e., the Canadian Environmental Quality Guidelines for protection of aquatic life). However, this guideline is not directly applicable to the oil sands water, because the sensitive aquatic species that these guidelines are designed to protect do not live in the tailings ponds, and the water is not directly released to the environment except through seepage. Also, the toxicity of the water decreases slowly over time as organic compounds degrade, with some studies showing a much lower level of toxicity after about ten years. However, seepage from the tailings ponds could be a problem, particularly since several of the tailings ponds are very close to the Athabasca River. Seepage of these more heavily contaminated tailings into surface water and groundwater can have a serious impact on the environment.

Third, there is the issue of when the land the ponds occupy can be reclaimed and returned to a condition similar to what it was before being used. Tailings ponds occupy a large area. It is estimated that every barrel of oil produced through surface mining generates one and a half barrels of fluid tailings. As mining operations expanded, it became necessary to build more and larger settling ponds. There are several oil sands tailings ponds, each close to 40-45 meters in height, covering a total area of 170 square kilometers. These ponds account for about 24 percent of the approximately 715 square kilometers of land that the industry has disturbed through oil sands mining, and they can have long lives as part of an active tailings management system, being used either for storage and recycling of water or for tailings deposits for 30 to 40 years.

It is important to understand that reclamation is slow for good reasons. Although reclamation is planned for each pond when it is built, the actual reclamation process is initiated only after the pond has gone through its whole lifecycle, with no additional tailings being added and the residue left to settle. In tailings pond, the heaviest, coarser solids (mostly sand) sink to the bottom very quickly while water rises to the top, but a middle layer of MFT, which is comprised of about 70 percent water and 30 percent fine clay particles and has the consistency of yogurt, can take several decades to settle. Only when it does, can the excess water be removed, leaving the tailings to solidify and making reclamation possible.

What Should Be Done, And What Is Being Done

A number of mechanisms are already being used to prevent birds from landing on tailings ponds, and they have been in place for a number of years. Oil sands operators employ propane-fired cannons, scarecrows, decoy predators, and radar controlled laser deterrent systems. Their purpose is to warn or scare the birds (mostly waterfowl) away, and predict waterfowl patterns, but they do occasionally (rarely) land on the ponds. In the unfortunate 2008 incident at the Aurora pond, Syncrude had 18 gas-fired sonic cannons installed around it but they were not deployed, allegedly because of bad weather. This incident, which received extensive coverage in the media and seriously damaged the image of tailings ponds and the industry in general, was not deserving of the attention it received, as the number of dead birds was very low when put in context.

Let’s consider the number of birds that die each year due to other forms of human intervention. According to studies cited by the American Bird Conservancy (ABC), thousands and thousands of birds die each year in the U.S. from collisions with wind turbines alone and, for all the casualties, wind power produced less than 3 percent of all U.S. electricity in 2011. To get an idea of the rate of mortality when birds collide with manmade structures in the U. S. alone, take a look at Table 1:

According to the U.S. Department of Energy, 20 percent of all electricity will be generated by wind in 2030. When that happens, between 100,000 and 750,000 birds will be killed by wind turbines each year. In Alberta alone, hunters kill 125,000 ducks every year, and up to 80 million birds die each year in collisions with motor vehicles in North America. With the numbers put in context, we can say that Syncrude’s media punishment did not fit the crime.

(Source: Shell Canada)

In order to address the seepage and ground water contamination issue, ditches and wells are built with the aim of intercepting water leaking from ponds built in old pits as shown in Figure 1. Despite these precautions, there is always the risk of water escaping from the tailings ponds through groundwater because tailings pond walls are permeable by design and contaminants can migrate through the structure to a degree. Surface mine operators are currently required by the EPEA to report seepage rates. However, on this issue, both opponents and proponents of oil sands have different opinions about the current situation and its impact on the environment. But the latest reports issued by an independent oil sands advisory panel seem to indicate that we will have to wait a little longer to know exactly what is happening, and reserve judgment until further scientific analysis clarifies the true nature of the problem. The Alberta and federal governments commissioned the reports, after previous reports came to conflicting conclusions. Since 1997, the impact of oil sands exploration on water bodies has been monitored by the Regional Aquatics Monitoring Program (RAMP), a multi-stakeholder group governed by a committee including representatives from government, aboriginal communities, and industry, who claim that water bodies in the area show no significant changes in water quality. However, Dr. David Schindler of the University of Alberta and his team conducted their own study in 2010 and claimed that the oil sands industry releases the 13 elements considered priority pollutants under the U.S. Environmental Protection Agency’s Clean Water Act, via air and water, to the Athabasca River and its watershed. Confronted with the conflict between the claims of RAMP and Dr. Schindler’s group, the federal and Alberta governments commissioned independent advisory panels to try to clarify the matter. Their reports, issued in 2010 and 2011 respectively, argue that the level and quality of current federal and provincial monitoring is not sufficiently comprehensive, and that it must be improved in order for an adequate evaluation of the problem to be possible. According to Alberta’s expert panel, some of the contaminants found in the water almost certainly are not naturally occurring, but added that not enough research has been conducted on the level and source of the pollutants to be able to reach a definite conclusion. One important reason for the somewhat unsatisfactory nature of this report is that the interpretation of monitoring data is complicated by the fact that naturally occurring outcrops of bitumen continually release hydrocarbons and heavy metals into the Athabasca River. In summary, more work needs to be done before we reach a definite conclusion about the impact of oil sands development on the environment. The Canadian Minister of the Environment decided to establish a first class, state-of-the-art monitoring system for oil sands development. This monitoring program will be discussed further.

Regarding the speed at which tailings ponds are being reclaimed, the industry could be criticized for 40 years of poor performance in addressing this issue, but this would be to state the problem in the wrong terms, since 40 years is the time it took for the first pond to be ready for reclamation. In September 2010, Suncor declared Pond 1 (Wapisiw Lookout), which in 1967 was the first tailings pond in oil sands to be created in Canada, to have solidified to a sufficient degree to allow the land to be reclaimed. Once complete, Wapisiw Lookout (formerly Pond 1) will be a 2.2 square kilometers area of mixed wood forest and a small wetland, supporting a variety of plants and wildlife. Wapisiw Lookout was a containment area for oil sands tailings between 1967 and 1997. A clearer description of the issue would address the need and urgency of pressing the industry to find quicker ways to achieve reclamation. This is particularly important since the future growth of oil sands exploration will require an increase in ponds capacity, although the tendency for future exploration to use primarily and increasingly in-situ methods (which do not require tailings ponds) will somewhat mitigate the problem.

MFT takes many decades to firm up sufficiently for reclamation. The key to achieving speedy reclamation of tailing ponds is to find a way to solidify the problematic layer of MFT at a faster rate. It is only once these tailings have solidified and all water has been fully drained that the pond is ready to have its topsoil replaced in preparation for the planting of vegetables, trees, and shrubs. When the provincial government determines that an area has met its criteria for reclamation (the land must have been restored to a sustainable landscape), it is certified as reclaimed and officially returned to the province. After certification, ongoing assessment of the soil and vegetation is still necessary to ensure that reclamation was successful.

A number of technologies have been developed since the industry started operations in the 1960s to reduce the environmental impact of tailings ponds. These technologies seek to reduce the volume of fine tailings and increase the rate of solidification. These include the use of mechanical centrifuges or thickeners, which reduce the water content of fine tailings, and the mixing of fine tailings with polymers, lime, or gypsum, which separate out the water from clay that would otherwise hold water. Some of these technologies are in the process of being tested, and a few of them have already been implemented.

We do not have to rely on the goodwill of operators to reduce their environmental footprint, however, because environment regulation enforces it. In 2009, the ERCB issued Directive 074 on tailings ponds management, with performance criteria and clear enforcement actions should these criteria fail to be met. It requires operators to specify dates for construction, use, and closure of tailings ponds, and to file them with the ERCB, to reduce the accumulation of fine tailings, and to accelerate the reclamation of all new and existing tailings ponds. In addition, the directive requires that 50 percent of the clay and silt produced from the oil sands ore after July 2012 be removed from tailings ponds and made solid enough to support heavy equipment traffic. The ERCB monitors whether tailings ponds are abandoned by the date specified on the approved plans, and there is a provision to take action when they are not. Directive 074 is technically very challenging and only time will tell whether operators will succeed in achieving the goals. But strict environmental regulation in Canada has already motivated the major oil sands producers to join forces in an effort to advance tailings management technologies. In 2010, CNRL, Suncor, Imperial Oil, Syncrude, Teck Resources, Total E&P Canada, and Shell Canada announced plans to share both their research and current technologies. By working together, all operators will be able to lower costs, avoid penalties, and more quickly meet defined environmental goals.

No industry can judiciously claim to have no impact on the environment, but hopefully this report has contributed to clarifying the extent of the environmental challenges facing the oil sands industry, and the degree to which the media have at times distorted these challenges, intentionally or unintentionally. One very positive aspect of producing oil from oil sands on Canadian soil is that additional monitoring can be implemented when necessary, and environmental regulations can be enforced to ensure that impact is minimized. It would be difficult to make this statement about many other oil-producing countries.

One of the main reasons environmentalists have this view is that extracting this oil emits more greenhouse gas (GHG) per barrel produced, than conventional oil extraction. Although the initial reputation of dirty oil arose in large part from issues related to surface mining (i.e., stripping the landscape during mining and temporarily leaving a big hole) and storing waste water in tailings ponds, concerns about increased GHG emissions have further tarnished the industry’s image.
Climate change is one of the biggest challenges of the 21st century and is shaping the context for the oil sands industry. There is a great deal of global debate about the right balance between energy development and environmental stewardship. This crucial debate deserves the facts. But when it comes to GHG emissions from oil sands, some of the facts and figures are either inaccurate or misunderstood. It is true that production from oil sands generates more GHG emissions than conventional oil production, but emissions are actually much lower than the public has been led to believe when a well-to-wheels (WTW) analysis is used. Many experts recommend a “WTW” or “full lifecycle” approach when comparing GHG emissions to other typical oil supplies. The WTW analysis for estimating GHG emissions of various oil sources involves looking at more than oil production processes. In general, production of oil accounts for only 5 to 17 percent of total GHG emissions,1 with the remainder coming from other processes like transporting oil to market, refining, and end-use by consumers (i.e., vehicle combustion).

Although the oil sands industry currently accounts for approximately 0.1 percent of global emissions (or 6.5 percent of Canada’s total GHG emissions in 2010), emissions from oil sands are going to increase in the future as production increases. While carbon dioxide (CO2) intensity per barrel produced from oil sands has decreased in the last couple of decades, absolute GHG emissions are increasing.

Oil Sands Emissions

Like any other oil production method, oil sands production generates CO2 emissions, both from mining and in-situ operations. The primary source of CO2 emissions for mining operations is the use of energy for various activities, i.e., the energy required to move the earth, to break it into smaller pieces, and to heat water used in the extraction process. The primary source of CO2 emissions for in-situ operations is the combustion of natural gas to generate the steam required for cyclic steam simulation (CSS) and steam assisted gravity drainage (SAGD) drilling methods. GHG emissions also result from various processes used in upgrading to upgrade bitumen into SCO.

Because oil sands are considered to be a high carbon intensity fuel, GHG emissions from the production of raw bitumen and SCO are higher than emissions from conventional oil production. This is a widely agreed upon fact. There is disagreement, however, about exactly how much higher those emissions are. Some studies report that GHG emissions from the production of heavy oil and bitumen are significantly higher than GHG emissions from the production of conventional oil, while other studies report that the difference is not much greater.

The Importance of WTW Analysis

A WTW or lifecycle assessment is a commonly used method to determine the carbon intensity of any fuel. WTW is gaining a great deal of importance today, as the regulation of GHG emissions evolves and policymakers want to consider the full lifecycle emissions of a fuel before they make energy-related decisions. WTW evaluates GHG emissions, starting from when oil is produced through to its final stage, such as combustion in vehicles. WTW includes well-to-tank (WTT) emissions and tank-to-wheels (TTW) emissions.

• WTT emissions include emissions from oil production, upgrading (specifically bitumen), transportation, refining, and distribution of oil and products.
• TTW emissions include emissions from the combustion phase, i.e., the burning of gasoline and diesel fuels in vehicles.

Several groups have studied both WTT and WTW emissions for oil sands and oil production from other sources (e.g., crude oil used by refiners in the U.S. and European Union). These studies have generally produced similar findings, although some studies show greater differences in emissions between oil sands and other sources of oil. Figures 1 and 2 show WTT and WTW emissions for 13 different types of crude oils and blends including oil sands. These two figures should be compared, as they show how different interpretations can be derived from the same data. Comparing the WTT and WTW data, it is clear that different sources of oil produce different WTT emissions, and this is the main reason environmentalists refer to oil sands as a “dirty oil.”

However, Figure 2 shows that combustion emissions (TTW) remain the same for nearly every type of crude oil used to produce gasoline and diesel fuel. This is because the quality of gasoline and diesel fuel used in vehicles is basically the same, regardless of its source. Therefore, it does not matter if gasoline or diesel fuel is derived from Saudi light crude, Californian heavy oil, WTI crude, Venezuelan heavy crude, or Canadian oil sands. The TTW emissions will be the same for each. The variability in lifecycle emissions among petroleum fuel occurs in the WTT portion of the cycle, before the fuel reaches the vehicle. Therefore, considering total emissions (WTW emissions), there’s not much difference between oil sands emissions and those from other oil sources.

Much of the debate surrounding oil sands emissions is focused on the WTT portion of the cycle, which makes up only 20 to 30 percent of total GHG emissions. Emissions for the WTT portion of the cycle differ among crudes because of the varying energy requirements for production, upgrading, refining, transportation, and distribution. IHS CERA conducted a meta-analysis of the results of 11 studies done so far. A meta-analysis combines and analyzes the results of multiple studies, with the goal of providing more accurate data than a single study. According to IHS CERA’s report, when GHG emissions are analyzed on a WTW basis, the emissions released during the combustion of refined products such as gasoline and diesel fuel make up 70 to 80 percent of total emissions, and WTT emissions make up only 20 to 30 percent of total emissions.2

According to IHS CERA (Cambridge Energy Research Associates), emissions from refined products produced from bitumen are only 5 to 15 percent higher than the average crude oil used in the U.S3 and 10 to 20 percent higher than the average crude used in Europe.4 These values do not represent all possible emissions from the production of bitumen, but instead represent average values used for comparison with other crude oil sources. And although oil sands-derived crude oils are more carbon intensive than the average crude oil consumed in the U.S., other carbon intensive crude oils are produced, refined in, or imported into the U.S.

However, when the Natural Resources Defense Council (NRDC) conducted a similar study in 2008 and 2010, the results of their study showed that the emissions from oil produced from bitumen are 8 to 37 percent higher in comparison with the U.S. average petroleum baseline.5 According to European Union’s (EU) proposed Fuel Quality Directive, oil sands-derived fuel emits 22 percent higher GHG emissions compared to conventional crude oil. But results of the latest study released by Jacobs Consultancy in March 2012 concluded that the WTW carbon intensities of gasoline and diesel from Alberta crude oils are within 12 percent of the carbon intensity of gasoline and diesel from typical crude oils refined in typical European refineries.6

The results of each study vary, some greatly. Which study do you believe? Which study results should be used for policy-related decisions? The reasons for these varying results depend on myriad factors, such as different analysis methods, different data sources, different lifecycle boundaries, and different assumptions.

An analysis of GHG emissions from petroleum fuels shows that the level of GHG emissions depends on the source of the oil and the production practices used. Some of these studies also did not take into account the GHG emissions from the by-products produced while making these fuels. For example, the extent of flaring during hydrocarbon production can result in a significant source of GHG emissions from conventional crude. Nigeria and Iraq are among the top sources of imported crude to the U.S., and initial estimates indicate that current gas flaring in Nigeria equates to burning as much as 12 to 18 percent of the produced crude on an energy-equivalent basis.7 Another factor not accounted for in some studies is the amount of water produced in conjunction with the production of oil. In the U.S., on average, there are ten barrels of water produced for every barrel of oil produced. In Canada, the water to oil ratio is closer to 11:1. High water production increases the energy needed to lift the oil-water-gas mixture from the reservoir and to treat the mixture, as well as to treat the water before either reinjecting it or disposing of it.8

The lifecycle analysis is an evolving discipline that must deal with a number of uncertainties, making it a challenging basis for policy. WTW analysis to set fuel policy requires good input data and sound methodology. Estimates of WTT GHG emissions from a single fuel can vary by more than 10 percent on a WTW basis. This variance is larger than the GHG emissions reductions required by some policies.

Should We Worry About Higher GHG Emissions from Oil Sands?

The answer to this question depends on who you are talking to. As we have seen before, it is possible to arrive at two different conclusions from the same data. This is certainly the case when considering the significance of GHG emissions from oil sands.

Critics of oil sands focus their argument on emissions generated during the production process (WTT). Figure 1 illustrates that each barrel of oil from SAGD production can release up to three times (300 percent more) the amount of CO2 than conventional oil extraction (West Intermediate Texas) on a WTT basis. When emissions from in-situ (i.e., SAGD) and mining are compared, it suggests that the in-situ method creates higher GHG emissions than mining does. In Figure 1, mining is demonstrated to release 125 kilograms (without upgrading) and 135 kilograms (with upgrading) of CO2 emissions per barrel of oil on a WTT basis. In-situ production produces 160 kilograms (without upgrading) and 170 kilograms (with upgrading) of CO2 emissions per barrel of oil on a WTT basis. Currently both mining and in-situ oil sands development methods are used to support production growth, but, according to Energy Resources Conservation Board (ERCB), in-situ oil sands production is expected to overtake mining by 2015.

Thus, the difference between WTT emissions for conventional oil and oil sands production could be as large as 100 kg CO2 per barrel (worst case scenario). If oil sands production expands to 5 million barrels per day, this could generate a difference of 500 million kg CO2 per day, or the equivalent of 180 million tons of CO2 emissions per year.

Statistics also show that GHG emissions from the oil sands industry have been steadily increasing for the past two decades. Since 1990, cumulative GHG emissions have almost tripled from oil sands production. In 1990, GHG emissions from oil sands production were 17 million tons. In 2010, it increased to 46 million tons.9 To put numbers in perspective, in 2010, Canada’s total GHG emissions were 692 million tons.

The roughly 1.6 million barrels per day of current oil sands production is thus responsible for about 46 million tons of CO2 emissions each year. Currently, oil sands production is responsible for 0.1 percent of total global GHG emissions. While it is true that production of oil from oil sands may double or triple over the next 25 years, and total CO2 emissions have grown consistently with increased production over recent years, proponents note that oil sands operators have consistently reduced per barrel GHG emissions. In addition, proponents also argue that oil sands growth will have no meaningful effect on the global amount of GHG emissions, as the majority of the emissions occur when the fuel is combusted in the vehicle. Therefore, when examining the WTW emissions per barrel of gasoline, oil sands emissions are only 5 to 15 percent higher (Figure 2) than conventional oil, not 300 percent.

According to Canadian Energy Research Institute (CERI), GHG emissions from oil sands will increase from 46 million tons in 2010 to 128 million tons in 2035, assuming a realistic scenario of 4.9 million barrels per day of oil production. While this three-fold increase sounds very substantial, it represents less than 0.25 percent of total global emissions. It is also unclear whether global emissions would be substantially different if oil sands products were removed from the market. This is because other sources of liquid fuel will be required to replace oil sands products, and the impact of this substitution on GHG would depend entirely on the type and future quality of this liquid fuel, which is uncertain.

In conclusion, it is clear that different interpretations of the same data and information can create diverse opinions. However, whether you oppose oil sands development or support it, the risk to this industry is very obvious. If regulatory and policy measures become actionable, as seems likely if ambitious goals for reducing climate change are to be met, the pressure to reduce emissions from oil sands will significantly increase.

1. IHS Cambridge Energy Research Associates.

2. IHS Cambridge Energy Research Associates, “Growth in the Canadian Oil Sands: Finding the New Balance,” 2009.

3. Ibid.

4. IHS Cambridge Energy Research Associates, “Oil Sands, Greenhouse Gases, and European Oil Supply, Getting the Numbers Right,” April 2011.

5. Natural Resources Defense Council, “GHG Emission Factors for High Carbon Intensity Crude Oils,” Sept. 2010, 3.

6. “EU Pathway Study: Life Cycle Assessment of Crude Oils in a European Context,” Jacobs Consultancy, March 2012, 29.

7. “Lifecycle assessment Comparison of North American Crude and Imported Crudes,” Jacobs Consultancy, July 2009, 4.

8. Ibid, 3-19.

9. Alberta Environment and Sustainable Resource Development: Report on 2010 Greenhouse Gas Emissions, Alberta Environment, June 2012.

But world economies cannot be sustained by conventional sources of oil. With tougher sanctions aimed at Iran soon, there is the potential for shortfalls in the world oil market. In view of this and other geopolitical unrest or natural calamities that we might face, getting a grip on rising oil prices is a particularly pressing need, and to do this, we need to increase the world’s oil supply. We must turn to unconventional oil—biofuels, synthetic fuels, and oil sands—to complement our energy needs. Among all available sources of unconventional oil, Canada’s oil sands stand out as the most attractive solution, taking into account environmental, ethical, and energy security concerns.

According to projections, the Canadian oil sands will exhibit solid growth and have the potential to contribute 3 to 6 million barrels per day (about 4.5 percent of global oil supply, assuming 4.5 million barrels per day) of oil by 2035, up from a current share of around 1.6 million barrels per day (1.8 percent of global oil supply). To further illustrate the vast potential of the Canadian oil sands, one must take a look at the initial Oil in Place (OIP), proven oil sands reserves, cumulative oil sands production, and remaining proven oil reserves. The initial OIP is around 1,800 billion barrels of oil sands, out of which 177 billion barrels are proven oil reserves. Of the 177 billion barrels, at the end of 2011, only 8.1 billion barrels (cumulative production) or 4.5 percent of the initial established crude bitumen reserves have been produced since commercial production started in 1967. Therefore, the remaining recoverable oil, using current technologies, is 169 billion barrels, which, assuming a current production rate, will last for more than 250 years.

The Canadian oil sands were formed millions of years ago, like many other sources of petroleum. In Canada, the oil sands formations straddle the Alberta and Saskatchewan border, with the majority of them in Alberta. To date, the industry has produced only 4.5 percent of the recoverable 177 billion barrels of oil using current technologies, and it is already facing tough opposition from the environmentalists. Before we delve into various environmental issues including the social impact of the oil sands development, it is important to understand the properties of oil sands and how bitumen is recovered using different technologies.

In this article, I will look briefly at what the oil sands are, how they were formed, their properties, their location, and how oil is produced from the oil sands deposits.

How were the oil sands formed?

The Canadian oil sands began their formation process many millions of years ago when Alberta was covered by a warm tropical sea. Plants and marine organisms, such as plankton, accumulated carbohydrates in their bodies and, when they died, sediments containing their remains accumulated in the bottom of those seas. More and more layers were added, and the sediments were buried deeper. Heat, pressure, and the activity of bacteria transformed the carbohydrates into hydrocarbons, and crude oil was formed. This oil was composed of both light and heavy hydrocarbons, the latter being more heavily loaded with carbon. In northern Alberta, many rivers flowed away from the sea and deposited sand and sediment. When the Rocky Mountains formed, geological pressures pushed the deposits of crude oil toward the surface, and the oil was squeezed northward and seeped into the sand, forming the oil sands.

What are the oil sands?

Oil sands are a naturally occurring mixture of sand, minerals, water, and bitumen. Bitumen is a thick form of crude oil, which, at room temperature, looks much like cold molasses and has an API gravity of 8° to 14°. The American Petroleum Institute gravity, or API gravity, is a measure of how heavy or light petroleum liquid is compared to water. It is so viscous that it will not flow unless heated or diluted with lighter hydrocarbons, and it needs to be upgraded before it can be used by refineries to produce fuels such as gasoline and diesel. The amount of bitumen in an oil sands mixture can range from 1 to 20 percent, with an average of 10 percent bitumen. Oil sands producers use a variety of methods to separate bitumen from the rest of the mixture.

Where are the oil sands located?

Most of Canada’s oil sands are located in the provinces of Alberta and Saskatchewan, with the largest deposits concentrated in northern Alberta: the Athabasca oil sands (which extend a little into Saskatchewan), the Peace River deposits, and the Cold Lake deposits (Figure 1). The Athabasca oil sands area, of about 40,000 square kilometers, is the largest and most accessible reserve, and the one that contains the most bitumen. Some of the deposits near Fort McMurray and others in the Wabasca area are close to the surface and can be mined using surface-mining techniques. The Cold Lake oil sands area, of about 22,000 square kilometers, has Alberta’s second largest reserve of bitumen held in deep deposits. Presently, some of these deposits are being explored using in-situ technology. The Peace River oil sands area, of about 8,000 square kilometers, is the smallest of Alberta’s oil sands areas. As at Cold Lake, the bitumen is being recovered using in-situ methods. These areas combined together compose the largest single deposit of oil in the world, containing 1,800 billion barrels of OIP.
Although there are oil sands deposits in Saskatchewan, production is not yet underway, and commercial viability has yet to be established, although there is significant commercial and government interest in developing the resource. An estimated 27,000 square kilometers of northwestern Saskatchewan—almost 5 percent of the province—has some level of potential for oil sands exploration, and an independent estimate has put the size of the province’s oil sands resources at as much as 2.7 billion barrels of bitumen. Official estimates of the size of these resources are not yet available, but lands have been leased, and exploration and development are proceeding. A private company (Oilsands Quest) is actively defining unconventional oil resources in three areas: Axe Lake (Saskatchewan), Wallace Creek (Alberta), and Raven Ridge (Alberta), with over 100,000 barrels per day of long-term production potential. In early 2010, Oilsands Quest submitted a regulatory application to the government of Saskatchewan for a SAGD pilot project that would become the first stage of 30,000 barrels per day for the commercial oil sands development at Axe Lake, but the company needs capital to advance their assets to the next stage. Oilsands Quest prepared detailed plans for the pilot plant, but is currently seeking a partner to mitigate the risk of development.

How are the oil sands produced?

The oil from oil sands does not come gushing out of the sand the way it does in any conventional oil production. Oil production from oil sands involves one of two recovery methods: Surface mining (also known as pit mining) has been around for about four decades and is what people tend to think of first when oil sands projects are mentioned. The second approach is a newer method of drilling for the oil, known as in-situ.

Roughly 20 percent of recoverable Canadian oil sands reserves can be extracted using surface mining, which can only be used when deposits are less than 75 meters from the surface. In mining, the first step involves the removal of trees and vegetation to clear the area. Then large earth-moving equipment removes the overburden (i.e., the clay, earth, and any materials that lie over the bitumen). The exposed layer of oil sands is then excavated, using massive electric or hydraulic shovels that scoop the sand onto 400-ton heavy hauler trucks. The trucks transport the oil sand to a crusher that breaks big lumps of sand into small particles. Oil sand is mixed with hot water to form slurry, which is hydrotransported (pipelined) to separation vessels in extraction plants.

In extraction plants, the bitumen is separated from the sand. In the separation vessels the slurry separates into three distinct layers: coarse sand settles on the bottom, middlings (fine sand, clay, and water including some bitumen) sit in the middle, and a thin layer of bitumen froth floats to the surface. The bitumen froth is skimmed off and spun in centrifuges and/or inclined plate separator (IPS) units to remove the remaining sand and water. The leftover sand, clay, and water is pumped to large storage areas called tailings ponds, and the water is recycled back into the extraction plant for re-use. Collected bitumen froth typically contains 60 wt% bitumen, 30 wt% water, and 10 wt% fine solids. The froth is further processed by the addition of solvent or diluent (usually naphtha) to make it more suitable for marketing or further processing.

About 80 percent of recoverable oil sands deposits are too deep for surface mining to be economical. These deeper deposits are recovered using the same drilling techniques used in heavy oil production: in-situ. Reservoir heating is essential to this method of bitumen recovery and steam injection has been the most successful thermal technique so far. Steam injection can be achieved through cyclic (huff-and-puff) or continuous injection. The huff-and-puff method is known as cyclic steam stimulation (CSS), and continuous steam injection is known as steam-assisted gravity drainage (SAGD).

The CSS method is a three-stage process that is based upon drilling a single vertical well into an oil sands formation. In the beginning, high-temperature steam is injected into the formation through the well to heat the bitumen. This is called the soak cycle. After several weeks of soaking, the bitumen-water mixture is pumped above ground through the same well. After recovering the bitumen, typically over a six- to eight-month period, steam is injected again into the well, and the cycle repeats until the cost of injecting steam becomes higher than the value of the product, at which point the well is considered depleted. Using CSS methods, about 25-35 percent of the bitumen-in-place is recovered, which is relatively low compared to other methods.

SAGD is the most commonly used method for in-situ bitumen production. Built on the success of horizontal drilling technology in other fields, the SAGD process uses a parallel pair of horizontal wells: one for steam injection and one for oil recovery. Steam is injected into the upper well, creating a high-temperature steam chamber. The steam lowers the viscosity of the thick bitumen and allows it to flow downward into the reservoir to the second horizontal well (called the production well), located below the steam injection well. The heated, thinner bitumen is then pumped to the surface via the production well. Throughout the process, steam is continuously introduced through the upper injection well, as the bitumen is recovered using the production well. On average, up to 45-55 percent bitumen recovery is possible using SAGD.

Bitumen production using both surface mining and in-situ techniques is rising. In 2011, surface mining and in-situ produced 892,000 barrels per day and 852,000 barrels per day of bitumen, respectively. CERI estimates that by 2035, under realistic production scenarios, in-situ bitumen will account for 57 percent of total production volumes, or 2.8 million barrels per day, as compared to mined bitumen, which produces 2.1 million barrels per day (Figure 2). After its production, bitumen is either processed in the refineries directly or converted into SCO in upgrading facilities, before it is processed in refineries to produce gasoline and other fuel. When we compare the overall performance of mining and in-situ technologies, both have advantages and drawbacks. Mining is the more efficient of the two recovery methods, with up to 90 percent of the bitumen being recovered from the processed oil sands. But oil sands mining tends to capture the bulk of negative media and public attention due to its bigger footprint. In-situ drilling has a much smaller footprint because it can cluster many wells on one pad, taking up much less space. However, a downside of in-situ development is that it often requires tremendous amounts of energy. Most of the energy comes from burning natural gas to heating water to make steam, which, of course, generates unwanted GHG emissions.

1. The independent resource estimates were prepared by McDaniel & Associates Consultants Ltd. (“McDaniel”), at the request of Oilsands Quest.
2. Oilsands Quest Inc., www.oilsandsquest.com
3. 400 Short tons is equivalent to 362 tonnes.
4. Ultimate recovery in Cold Lake area (Source: 2008 ERCB Performance presentation).
5. Ibid.
6. 852,000 barrels per day of bitumen production from in-situ included 266,000 barrels per day from CSS, 374,000 barrels per day from SAGD, and 211, 000 barrels per day from EOR (Source: Energy Resources Conservation Board).
7. Of the 1.74 million barrels per day of total bitumen production, about 50 per cent bitumen was upgraded to produce SCO (Source: Energy Resources Conservation Board).