Black Bonanza E-Book

Alastair Sweeny

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 402

Veröffentlichungsjahr: 2010

Beschreibung

What if Canada 's so-called environmental nightmare was really an engineering triumph and the key to a stable and sustainable future? For years, Canadians have been hearing nothing but bad news out of the Athabasca Oil Sands. From 20th Century economists decrying it as a perpetual money-loser in the face of more easily-extracted foreign oil to green groups around the world declaring it the world's worst industrial enterprise, sometimes it seems as though no good could ever come from this so-called dirty resource. But what if developing Canada's Oil Sands was the key to bridging the gap between current petroleum-based economies and the alternative energies that aren't ready for market yet? What if it meant eliminating the threat of Peak Oil and providing economic stability not just for Canada and the rest of North America, but for the world? And what if the environmental costs of the resource were both not nearly as dire as some would have you believe, but currently better than many other options with the industry already making huge advances in sustainability, energy use and water reclamation? That's exactly the case that Alastair Sweeny, author of BlackBerry Planet, argues is at the core of the Athabasca Sands: a bright future. By digging into the past, present and future of oil sands technology, Sweeny cuts through the hype and hysteria and makes a solid and engaging case that the Sands aren't the environmental boogeyman set to destroy humanity, but rather our best hope for a truly stable and sustainable future.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Preface

Acknowledgements

Chapter 1 - All About the Oil Sands

Chapter 2 - Origins

Chapter 3 - Gearing Up

Chapter 4 - Pay Dirt

Chapter 5 - King Ralph and the SAGD Revolution

Chapter 6 - Tar Wars

Chapter 7 - Peak Oil Terror and the Athabasca Answer

Chapter 8 - Blue Shift

Index

Copyright © 2010 Alastair Sweeny

All rights reserved. No part of this work covered by the copyright herein may be reproduced or used in any form or by any means—graphic, electronic or mechanical without the prior written permission of the publisher. Any request for photocopying, recording, taping or information storage and retrieval systems of any part of this book shall be directed in writing to The Canadian Copyright Licensing Agency (Access Copyright). For an Access Copyright license, visit www.accesscopyright.ca or call toll free 1-800-893-5777.

Library and Archives Canada Cataloguing in Publication

Sweeny, Alastair

Black bonanza : Alberta’s oil sands and the race to secure North America’s energy future / Alastair Sweeny.

Includes index.

ISBN 978-0-470-16138-8

1. Oil sands—Government policy—Alberta. 2. Oil sands—Economic aspects—Alberta. 3. Oil sands—Environmental aspects—Alberta. 4. Oil sands industry—Technological innovations—Alberta. 5. Athabasca Tar Sands (Alta.). I. Title.

HD9574.C23A54 2010

333.8’232097123

C2009-906379-4

Production CreditsCover design: Natalia Burobina Interior design: Adrian So Typesetter: Thomson Digital Cover Printing: Lehigh Phoenix Printing and Binding: Friesens Printing Ltd.

Editorial Credits Executive Editor: Karen Milner Project Coordinator: Pauline Ricablanca

John Wiley & Sons Canada, Ltd. 6045 Freemont Blvd. Mississauga, Ontario L5R 4J3

FP

Dedication

For Ewan Sweeny, Albertan, on his thirtieth birthday.

Preface

Welcome to Black Bonanza, the story of Canada’s Athabasca Sands, one of the greatest reservoirs of fossil fuels on the planet.

I started to write this book during a growing attack on the Sands by global warming alarmists. The whole movement seemed unreal to me, and not entirely about the environment, and I wanted to do some due diligence to see what was really behind these attacks. I did some research in the 1980s for Alberta Energy Company, one of the original investors in Syncrude, and have been tracking the history of the Sands ever since. I was particularly struck by former Alberta Premier Peter Lougheed’s recent concerns about runaway Sands development, and other worries about water and air pollution. So, I felt it was time to dig deeper into the issues and share my findings with people interested in a wider perspective on our energy future. As I got further into the research, I realized that the story of the early days of the Sands and the huge engineering challenges faced was fascinating as well.

The first part of Black Bonanza tells how the Sands were formed millions of years ago, and the one-hundred-year quest to crack the code of removing usable oil from what is essentially tarry dirt. Reminiscent of the Klondike gold rush days, only in slow motion, the quest for oil from the Sands attracted a parade of dreamers, adventurers and explorers, pulled by the lure of the frontier. All of them went broke. However, the rise in oil prices in the 1970s and 1980s attracted major investors, and finally, in the 1990s, a marvelous new below-ground technology emerged, to transform the industry from a backwater resource to the global giant it is today. There is spectacular wealth in the Sands, far more than we originally believed, and this story must be told as well.

In the second part of the book, I explore the new role of the Sands as the “whipping boy” of radical green activists and as “the worst project on earth.” Just as the Sands emerged to help us deal with a growing oil supply emergency, a massive campaign by global warming crusaders has staked a claim against Canada’s oilsands developers. In an effort to demonize the Sands, an army of public relations activists were unleashed to turn the Sands from what should be a treasure chest of wealth and energy security, into what Al Gore calls “a threat to our survival as a species.”

Some of my green-leaning friends would disagree, but I’m afraid that, for the past decade, the Anthropogenic Global Warming (AGW) crusaders have sucked all the oxygen out of most other environmental campaigns, and many far more serious concerns have been set aside to placate these U.N.-backed agitators. Even the oilsands producers seem like deer caught in the headlights, unable to flee from this onrushing army of warmists.

The book becomes a a bit of a detective story, as I go behind the public relations spin of AGW and try to unravel the people and players behind the crusade. I wanted to find out why they are so bent on painting Canada black and even trying to shut down the Sands, especially when the country is really only a bit player in the global emissions game. This is a legitimate question, when the U.S. and Chinese coal industries have a far more serious environmental footprint.

Sherlock Holmes: I have no data yet. It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts . . .

—Arthur Conan Doyle, A Scandal in Bohemia (1891)

There clearly is far more going on with this AGW circus than meets the eye. First, why are millions of people obsessing about carbon dioxide (CO2), a trace gas in the atmosphere, 3 percent of which is due to human emissions? And why are government officials demanding that billions of dollars be spent to control this gas that is so essential to plant growth, while real pollution concerns cry out for solutions and scores of our fellow citizens starve to death or die from preventable diseases? Frankly I am baffled. This seems like something out of Orwell’s novel, 1984.

Where does the truth stand? Why have scores of scientists bought into climate models that still don’t stand up to scrutiny? Physicist Richard Feynman called this “cargo cult science,” where flawed research produces useless results and scientists fool themselves. And why did prominent climate experts take the risk of fudging data to support the United Nations Intergovernmental Panel on Climate Change (IPCC), when they knew they would be found out eventually? Who has been paying for all this folly if not the taxpayer? Clive Crooks said it best in The Atlantic: “The stink of intellectual corruption is overpowering. This scandal is not at the margins of the politicized IPCC process. It goes to the core of that process.”

Another question that intrigued me as I researched this book was this: Why are the leaders of AGW blaming “Big Oil” for the problems of the planet when most of them have worked for, taken grant money from, or even partnered with the oil majors? Even the lead environmental sled dogs, Greenpeace and WWF, have taken funding from Big Oil. So who is co-opting whom?

For the sake of understanding this issue, I believe it is crucial for people to set aside their very real environmental concerns and question what is really going on behind AGW and the stigmatizing of the Sands. Is it just hypocrisy we are dealing with? Is the whole campaign over AGW just a fund raising scam, or is it more? This whole advocacy issue, while painful for some, is just too important to ignore. There are serious economic interests at stake here and some major economic repercussions.

I know that public relations professionals have little interest in that quaint concept called truth. They have a job to do and clients to satisfy. And, obviously, the major oil companies in the Sands have their own public relations departments, as well as hiring outside consultants, but what amazed me is how big a public relations exercise AGW and the “carbon jihad” has become, and what a colossal amount of money has been spent on dirtying the reputation of the Sands. I wanted to drill down and find out who profits and who pays.

Behind the scenes, that whole AGW crusade is being stage managed by a number of well-paid advocacy consultants. These people are experts at using the complete arsenal of modern public relations, including on-line campaigns, viral interactive media, rapid response, securing placement for opinion pieces, issues branding, political rhetoric, and persuasion.

A lot of the divide seems politically driven. Al Gore himself doesn’t dare cross the street without his trusty public relations lady, Kalee Kreider, formerly a senior vice president and Washington manager of Fenton Communications, and a veteran activist and publicist who has worked closely with Greenpeace and the WWF. The Washington Post says that Fenton founder David Fenton, a senior hippy who’s the public relations guru of the U.S. left, is “not just the poster child of liberal causes; he’s the designer, producer and distributor of the posters.” New York-based Fenton is the guy who single-handedly changed the tired old terminology “left wing” into a shining new brand: “progressive.” He also edits Al Gore’s speeches.

Jim Hoggan, who runs Canada’s David Suzuki Foundation, is a very smooth public relations pro as well. His blog, desmogblog, pretty much recycles the Al Gore carbon chastity mantra developed by Fenton.

But then again, in this house of mirrors, we find that not all left-wingers are warmists. In that great lobby bazaar called Washington, home of almost 40,000 registered lobbyists, and hundreds of thousands of policy promoters, both the Democrats and the Republicans happily accept donations from pretty much the same large corporations, with few exceptions.1

So we have to drill down further. I find it fascinating that several of the major players have extensive ties to the oil industry. Al Gore’s father, a U.S. senator, boosted the family fortune sitting on the board of Armand Hammer’s Occidental Petroleum (Oxy), and helped Oxy get into Libya. Today, Oxy is the world’s largest user of CO2 for enhanced oil recovery (EOR), a technique used to increase production from mature wells. The current Oxy Canada is primarily a gas reseller, but the original Occidental Petroleum Canada Ltd. has morphed into Nexen Inc., a respected and innovative oilsands operator.

Rajendra Kumar Pachauri, head of the UN IPCC, was lead author on the IPCC’s second report, which paved the way to Kyoto—which, in turn, ushered in the world’s first carbon trading schemes. Pachauri is closely involved with India’s biggest company, Tata Industries, who have bankrolled his TERI Energy Research Institute for thirty years. Pachauri has served as a director of the Indian Oil Corporation and is a director of Oil and Natural Gas Corp. In 2005, he founded his own oil company, GloriOil Limited, of Houston, Texas, to exploit patented processes developed by TERI. In 2007, Kleiner Perkins, the Silicon Valley venture capital firm that has Al Gore as a partner, invested $10 million in the company. Pachauri sits on the advisory board of the Chicago Climate Exchange.

I also wanted to explore the contribution to the movement by Canadian Maurice Strong, the godfather of global warming, who is the spider at the center of a very impressively woven web. A grade eleven dropout and former fur trader who once worked as a security guard at the United Nations, Strong now has oodles of honorary degrees for his work on the environment. After a business career in the energy and international development business, Strong founded the UN Environmental Program (UNEP), was a member of the Club of Rome, ran the 1992 Earth Summit at Rio, founded the UN IPCC, the heart of the AGW movement, and is also vice-chair of the advisory board of the Chicago Climate Exchange. But Strong also knows the energy business as an insider—he was founding president of Petro-Canada, recently absorbed by major oilsands player Suncor Energy.

Moving beyond all the public relations issues, we have to look at who benefits from the AGW crusade and the demonization of the Sands. We have to question whether the Chicago Carbon Exchange and other emissions markets and carbon credit schemes really work, and whether there are better ways to promote renewable energy, such as simple taxes at the pump and tax breaks for energy conservation and innovation.

It appears that we are starting to reach “Warmageddon,” the last battle in the AGW crusade. At the time of writing, I feel these AGW spin doctors, however bright and persuasive they may be, are flogging a dying horse. Even before the “Climategate” release of incriminating e-mails, the real science was dragging them down and the recession was making it worse. Now polls show that climate fatigue is setting in, and people are increasingly yawning and changing the channel in face of the most brutal apocalyptic statements by Al Gore and others. Why do they keep up the pretense and keep repeating the same tired mantra—Canada’s oil sands are evil? They are not, and it’s time to move on.

Finally, I wanted to explore the concept put forward by a number of experts, from inventor Kay Kurzweil to financier Warren Buffett, that we are very close to some amazing breakthroughs in solar power, and twenty years from now most short-haul vehicles on the road will be electric. In the final section of the book, I explore what this will do to the oil industry, and what transitional role the Athabasca Sands can play in the race to real energy security.

I hope you enjoy Black Bonanza. If you want to learn more about the Sands and the issues I discuss in the book, I invite you to visit my Web Support Site at: www.alastairsweeny.com/blackbonanza/index.php.

I have added chapter-related images and videos, and a full resourcebase of Sands-related images and videos, documents, useful Web links, and a bookstore with direct links to order pages at on-line retailers.

The Web Support Site also has clickable Web-linked references that connect you right to the original article that I’ve cited in each chapter. These are indicated at the end of appropriate footnotes in the book with the symbol <*>. I have also built a gallery of images you can refer to while you read each chapter of the book.

While I have tried making material about oilsands technology as reader-friendly as possible, if you need help with technical terms and want to understand the oilsands universe better, I invite you to use the glossary on the Web Support Site.

A note on spelling and definition: The Athabasca Sands are not properly “tar sands” because tar is a by-product of coal oil. They used to be called “the tar sands,” and the “dirty” oil attackers insist on using the term for spin. Oilsands pioneer, Karl Clark, was the first to argue that they should more properly be called “oil sands” or “oilsands.” In this book, I have used all three terms, and generally prefer to call them “the Sands.”

Before and after publication, I will also be adding material on the Web Support Site, twittering @alastairsweeny and posting, from time to time on the Black Bonanza Weblog at: http://blackbonanzablog.blogspot.com/.

Thanks for reading Black Bonanza. I hope you enjoy this book and find that it provides you with insight, context, and understanding about the amazing saga of Canada’s oil sands and their role in our energy security.

I welcome your feedback, questions, and comments.

Alastair Sweeny Ottawa, Canada [email protected] December 15, 2009

Acknowledgments

Scores of people gave me input and wise counsel with this book. In particular, I’d like to thank Pierre Alvarez, Neil Camarta, Angela Crocker, Travis Davies, Earle Gray, Vincent Lauerman, Steve McIntyre, Dave Mitchell, Gwyn Morgan, Stephen Rodrigues, Kelli Stevens, as well as a number of energy company employees, association spokespeople and environmental consultants who spoke on the condition of anonymity. My research load was made easier by staff at Library and Archives Canada, the Calgary Public Library, the universities of Alberta and Calgary, the Provincial Archives of Alberta and Natural Resources Canada, particularly Lexie Lewis. At Wiley Canada, I would like to thank Karen Milner and her splendid crew: Deborah Guichelaar, Liz Mccurdy, Pauline Ricablanca, Lucas Wilk and Brian Will, as well as my amazingly astute editor Carol Bonnett. To all, many thanks.

Finally, no, I am not an “oil company shill” and the opinions expressed in this book are entirely my own.

1

All About the Oil Sands

He that will not apply new remedies must expect new evils, for time is the greatest innovator.

—Francis Bacon

Hard-hatted, I’m standing in the middle of a reeking moonscape of black bitumen-coated sand. Around me are enormous diesel haulers and an old electric shovel that has had its day. It’s a hot afternoon and the stuff the engineers refer to as “dirt” stinks like the fresh asphalt I poured in my driveway last June. I pick up a bit of the dirt—it’s soft, moist, and a bit sticky. My feet even sink gently into the stuff. Later, I find the leather soles of my shoes are spotted with oil.

Everything is big in the Athabasca Sands. Landing in the main Syncrude site is like being inside a giant crater on another planet. The colossal yellow Caterpillar 797Bs that can each haul 400 tons of oil sands from the shovels to the separation plant, are the biggest trucks money can buy. Each one has the horsepower of a hundred pickup trucks. They’re monster versions of the yellow Tonkas my sons had in their sandbox. Fully loaded, they weigh more than two Boeing 747s. Each 400-ton run delivers enough dirt to make about 200 barrels of oil, or 1,000 U.S. gallons (3,785 liters) of gasoline.

To get up into the cab, I have to climb fifty feet (15.24 meters) up a welded steel staircase of twenty steps. From the top, the landscape appears lunar—a lumpy black asphalt field stretching to the horizon—and over to the east, the greasy sludge ponds kept in by a monstrous tailing dam—the largest in the world by volume—standing as high as a house. Beside the plant, the eye is drawn to the neatly stepped pyramid of shocking yellow sulphur, a by-product of synthetic crude, to be shipped out to make fertilizer.

Like the tar that pools out of road asphalt on a blistering hot day, liquid bitumen has always oozed out of the high banks of the Athabasca River for as long as native people can remember. In summer, it can stick to your boots; in winter, you can burn it like coal. Also called pitch, bitumen is the heaviest of the naturally occurring crude oils, a hydrocarbon with most of the hydrogen missing.