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How the Alberta oil sands have changed Canada

Globe and Mail Update

Latest comment posted at 7:10 PM EDT 28/01/08

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  1. RD Lone from Vancouver, Canada writes: Pretty balanced perspective for once. Good job.
  2. Globe Insider subscriber content
    Oldman Johnson from Calgary, Canada writes: Continued comparisons of Alberta's royalty structure to that of Norway or Alaska are not meaningful, in the context of the oil-sands. Norway and Alaska have large reserves of relatively light oil, and while production costs are high(er) than regular conventional oil, due to the nature of their offshore and isolated locations, respectively, they do garner top dollar once on the market. Alberta's heavy crude, on the other hand, get's marked down considerably from the WTI price benchmark, while it's just as expensive, if not more so, to produce. If the Alberta government had not lowered royalty rates on the heavier crudes, no up-front development would have happened, and we'd be nowhere near ready to ramp up production in accordance with demand. Ten to fifteen years lead time is required on projects of this size. The fact that Alberta's Heritage Trust Fund is not in the same league as similar funds in Norway and Alaska has more to do with undisciplined spending/maintenance of the fund, than the respective royalty rates. As far as the laws in the US being passed that don't allow the use of 'dirty energy', how do those laws apply to 'clean energy' that is transported half-way around the world, from countries that don't come close to the environmental responsiblity shown by Canadian companies and regulatory bodies. Don't confuse heavy oil with 'dirty', please allow for all full cycle costs to come into play. Do those same laws in the US apply to electricity produced from US coal? The oilsands are a big target, perhaps rightly so, but not enough attention is being made to the advances in environmental responsibility, which have been, and continue to be, many. And finally, while the European energy agencies think so little of us, European energy companies are currently scrambling over each other for any piece of the oilsands puzzle they can lay their hands on. They obviously didn't get the memo that it wasn't worht bothering about.
  3. Globe Insider subscriber content
    Vic Hotte from Kettleby, Canada writes: Thank you, Shawn McCarthy, for a timely reminder about economic behaviour and measurement: 'Economists don't factor in unregulated pollution because they are only liabilities if someone — the government — forces the companies to account for dealing with them. Without a limit on carbon dioxide emissions, for example, companies can send all the CO2 into the atmosphere they want — free of charge.' These unaccounted costs are called 'externalities'. If cancers are caused by ingesting polluted water, they are economically irrelevant -- someone else's cost. Dr. David Schindler, an award-winning Canadian scientist observed there is no real hope for rehabilitating the devastated & degraded landscape of the tar sands, an area the size of Florida. In 1990, Environment Canada warned against intractable water pollution from pretroleum products. Yet, the bitumen in the tar sands is heated, using finite supplies of natural gas & water from the Athabasca River. The polluted water is stored in tailings ponds that leach directly into the adjacent river. The water used/polluted in this process far exceeds the water use of the city of Calgary. Alberta leads the charge backwards into the 19th century, when we were ignorant about pollution and land degradation. Sequestration of carbon emissions has been suggested, but as the gas rises in large amounts, it might bleach large areas of the overlying landscape, rendering it unuseable; research is needed. Alberta should declare a moratorium on future tar sands development for now. Alberta’s current gigantic greenhouse gas emissions from the tar sands give it the unenviable title of NORTH AMERICA’S TAILPIPE. “Ready, fire ….” has been Alberta’s approach -- but, Alberta must take aim at this growing environmental catastrophe soon. Money earned in the short-term will do nothing for future generations deprived of the boreal forests, lakes and natural life extinguished by this monstrous and growing project.
  4. Michael Kalus from writes: Eric Reguly: 'If you want cheaper gasoline in Canada, vote for the candidates who promise to reduce energy taxes.'

    Funny, a bit earlier in the piece there was an admission that economists do not price the environmental cost into the price of oil or the oilsands production, but instead of addressing this (and say, pointing out how much these 'energy taxes' cover these costs we are being told to get rid of them?

    Why is Canada (and Alberta) thinking only in the now instead of the long term? The idea to ask a fair price (as in: This is how much it costs us to get it out of the ground with ALL the costs factored in) doesn't seem to occur to either the writers or the average Albertan. The fight of words over the Royalities is a good example of this as well.
  5. Tristram Shandy from london ontario, Canada writes: oldnman johnson you make some good points there and i am concerned that alberta could be scapegoated on the energy/environmental issues.

    that is why i asked about the background of these reporters, which i find a bit lacking with regards to alberta experience.

    i am no expert, but having read your post and the articles, i am not so diametrically opposed to stelmach's proposals for the environment out there, given the constraints.

    this reminds me a bit of the problem with harper vis-a-vis the afghanistan file: he has simply not make sufficient effort to put the case forward in favour of our involvement there. similarly, stelmach needs to start talking not just to albertans (i know, he is trying to get re-elected) but to the rest of canada.

    the lack of leadership on the environment in canada is very disappointing.

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