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The Syncrude oil sands extraction facility is reflected in a lake reclaimed from an old mine near Fort McMurray, Alta. (MARK RALSTON/AFP/Getty Images)
The Syncrude oil sands extraction facility is reflected in a lake reclaimed from an old mine near Fort McMurray, Alta. (MARK RALSTON/AFP/Getty Images)

Pierre Duhaime

The oil sands: A vital part of Canada's future Add to ...

The Gulf of Mexico oil spill has understandably led to more attention on the oil and gas industry. In Canada, the discussion gravitates to the oil sands, with our 178 billion barrels of reserves - the second-largest source of oil after Saudi Arabia.

Some supporters believe this method of oil recovery is inherently safer and more stable than deepwater drilling, attracting more interest and investment. Detractors see it as another example of why we need to end our dependence on oil more quickly.

I see the oil sands as part of the solution rather than the problem. Until we dramatically change our way of life, the world will continue to need a reliable source of oil. The World Energy Council forecasts global demand for energy to grow by 35 per cent over the next two decades, driven mainly by population growth from 6.7 billion today to eight billion by 2030.

Further, it is estimated that 1.5 billion people live without electricity or modern energy services. This inequality of access is one of the most significant challenges facing the world today.

How will the demand for energy be met? Even the most enthusiastic supporters of renewable energy - including Canadians - acknowledge that rapidly retreating from hydrocarbon fuels is not immediately possible. Wind and solar power, biofuels, hydrogen fuel cells, geo-thermal and other renewable energies are promising and merit our support. But they represent a small portion of the energy mix. In 2007, such new technologies constituted 0.2 per cent of Canada's energy production - and we're a wealthy country with the resources to develop these sources of clean energy.

We must continue to develop these alternative energy sources. But oil and gas are the most affordable, accessible and deliverable sources until other options have been properly developed. And for Canadians, they are a major contributor to employment, investment and income.

The Canadian Energy Research Institute estimates that over the next 25 years, the oil sands will generate $1.7-trillion in GDP for Canada. That translates into new government revenues of $19.6-billion a year from oil sands activities, which can pay for the schools, hospitals, roads and services that sustain our living standard.

The economic benefits from the oil sands are shared across Canada. SNC-Lavalin, for example, supplies engineering and construction services to the oil and gas industry in Canada and around the world, a significant part of our business.

The oil sands obviously has significant environmental impacts including land use, carbon-dioxide emissions, water consumption and tailings ponds. But the industry is developing promising, more sustainable technologies to solve these problems, and needs to share these successes.

Cleaner and more sustainable technologies are in constant development currently. New advances permit water recycling rates of more than 90 per cent in processing facilities, dramatically reducing fresh water needs. Researchers now experiment with techniques to separate bitumen from mined oil sands without water. Carbon capture and re-injection opportunities for enhanced oil recovery in existing Alberta oil fields are becoming more cost-effective and, soon, Alberta could become the world leader in these technologies.

As to land use, 80 per cent of the oil sands reserves are too deep for surface mining and will be extracted by in-situ operations that disturb 10 to 15 per cent of the surface area. Current in-situ extraction techniques still produce amounts of carbon dioxide, however. One solution, liquid-assisted steam enhanced recovery (LASER) could reduce greenhouse gas emissions per barrel of production at in-situ operations by more than 25 per cent.

Another option worth exploring is solvent injection, in which hydrocarbon solvents are injected into an upper well to dilute the bitumen. Still a work in progress, this process is much more energy efficient than steam injection. Dedicating resources to exploring new, sustainable and energy-conscious solutions such as this is key.

New technologies are neither easy, nor inexpensive. To move from the research stage to large-scale utilization requires collaboration between producers, government, research labs and service providers such as SNC-Lavalin.

It also requires broad-based support from Canadians for the industry at large, without which prospects will be sharply diminished. Government, industry and the public need to work together to set common objectives and a shared agenda. Considering the importance of oil sands development to our economy, the demand for energy globally, and the lack of access to energy among the world's poorest populations, this is crucial.

The oil sands industry is on a path to sustainable production and to providing developed and developing nations with affordable, reliable and secure energy supplies. Let's make it happen.

Pierre Duhaime is president and chief executive officer of SNC-Lavalin Group Inc.

 

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