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This Sept. 19, 2011 aerial photo shows an oil sands mine facility near Fort McMurray, Alta. (Jeff McIntosh/The Canadian Press/Jeff McIntosh/The Canadian Press)
This Sept. 19, 2011 aerial photo shows an oil sands mine facility near Fort McMurray, Alta. (Jeff McIntosh/The Canadian Press/Jeff McIntosh/The Canadian Press)

Report on Business at 50

Athabasca oil sands: Making headlines, then and now Add to ...

Fifty years ago, the Athabasca oil sands took their first small steps toward becoming – depending on your point of view – North America’s economic salvation or its environmental cataclysm.

The roots lie in a little mining venture in the Alberta woods launched by U.S. petroleum giant Sun Oil Co. Sun named its project Great Canadian Oil Sands, but by today’s standards it was not so great. When it launched production in 1967, it targeted 45,000 barrels of oil a day – much less than what the region might generate in a single hour today.

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Yet even as the plant opened there was a sense of history in the making. A Report on Business story gushed that “synthetic crude will soon flow southward, signalling an invasion of conventional oil markets that could ultimately spread the name Athabasca around the world.”

Today, Athabasca does indeed resonate around the world. It is familiar in the boardrooms of China, where it is valued as the site of the world’s third-largest oil reserve, and in the U.S. streets around the White House where protesters assail the plan for the Keystone XL pipeline to carry bitumen to the Gulf of Mexico.

The 50 years of the Report on Business trace the rise of the oil sands, which now produce half of Canada’s oil output, and are a high-profile pawn in Canada-U.S. relations. They are a global rallying cry for ecological idealists digging in for the key battle of the climate change war, and for energy realists grasping for security in a world of peak oil and fragile supply lines tied to unstable, unfriendly regimes.

Fort McMurray, 500 kilometres north of Edmonton, is the latest of a long line of Canadian boomtowns – from the nickel capital of Sudbury, to Quebec’s asbestos towns – but “Fort Mac” now looms largest in our national psyche.

It is the hub of an oil sands region that traverses 140,000 square kilometres, although only a small percentage is mineable – with the focus now shifting to deeper in situ methods. The area produces 1.5 million barrels of oil a day, with output targeted at four- to five-million by 2025.

The municipality of Wood Buffalo, dominated by Fort McMurray, contained 3,400 people in 1967. Now, it is bursting at the seams with 100,000 residents, and that doesn’t count ghost workers who fly in for two to three weeks and then fly back home to St. John’s or Moncton.

When GCOS opened in 1967, production was based not on big trucks, as today, but on massive bucket-wheel excavators that weighed 3.5 million pounds – 21 times the heft of a Boeing 727, the Report on Business reported with the awe that has always characterized oil sands coverage.

GCOS had cost $238-million to that point, 20 per cent over estimates, and the pattern of cost overruns continues. Investment in the sands is projected to reach $20-billion this year, and maybe more, given the risk of hyper-inflation and accidents that plague production.

Through the half-century, the oil sands have represented the best and worst of Canada – in our ability to harness nature to extract resources, and to build monuments of environmental degradation.

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