Please Canada, develop the oil sands of Alberta!

Post ImageI have long thought that we as a country should be investing more money in energy, including properly developing Alberta’s vast oil sands. Canada could become the most important region in the world for oil if we were able to extract it efficiently enough – and while it may not the best for the environment, it would certainly be a welcome change to have the oil capital of the world in a democratic, peaceful place for once. A new report from CIBC World Markets seems to support the idea of developing the oil sands, suggesting it will become the most important source of new oil by 2010:

Alberta will sit on one of the most valuable energy sources in the world by that time, and one of the few still open to private investment, said Jeff Rubin, chief economist at CIBC World Markets, the bank’s wholesale banking arm.

He added that conventional oil production around the world apparently peaked in 2004.

Energy companies are finding new oil, but most of it will come from non-conventional sources. Ocean oil rigs are the primary source of new oil today, with Alberta’s oil sands tomorrow, with expansion projects rivaling those of Saudi Arabia.

If we were able to properly develop the oil sands, without ceding too much control to the United States, Canada could become very rich, and the world would have oil for longer than is currently projected. This means two things would happen; first, the push for alternative energy sources may be slightly delayed and second, Canada could use its new wealth to invest in those alternative energy sources to be prepared for the time when no more oil can be extracted. If we sit back and choose not to increase production, the world will shift to other sources of energy more quickly, and we might one day be left with a bunch of useless oil, or at least, much less valuable oil.

One of the problems with the oil sands is that our technology is not good enough to efficiently extract the oil on a large scale. There has been some progress, but not enough. So how do we solve that problem?

  • We could just hope that Syncrude, Suncor, and the other companies involved figure it out.
  • The Canadian government itself could hire lots of researchers, engineers, chemists, whoever it takes, to try and improve the technology.
  • Canada could sponsor a research competition, kind of like NASA or DARPA’s popular programs in the United States. Challenge people to develop the most efficient, least harmful process for extracting oil from the oil sands. This is probably the best way to get some quick, meaningful innovation.

The point is that problems are not insurmountable.

There are lots of people who want Alberta to be the only one to profit from our reserves, but I don’t think there’s any reason that Alberta cannot be properly compensated and still have the entire country benefit. We don’t want Trudeau’s NEP, but we do need a national policy that recognizes Alberta and benefits all.

Unfortunately, our political parties do not seem that interested in developing such a policy. Vitality Magazine has a good round up of the “green” platforms the parties have announced for Monday’s election. There are quite a few mentions of alternative energy sources, but no mention of the oil sands. I think if we’re serious about alternative energy, we need to invest a lot of money into it, and what better way to obtain that much money than by fully exploiting the oil sands?

The oil sands offer our country very unique possibilities for the future. Let’s do something with the oil sands and take advantage of those possibilities!

(For more information, read these notes I took during a September 2005 conference that included some discussion on Canada, the oil sands, and the need for a national policy on energy.)

5 thoughts on “Please Canada, develop the oil sands of Alberta!

  1. The facts are that this is highly unlikely, if not impossible, to happen. Extracting oil from the sands is incredibly expensive, relatively. It costs about twice as much to get oil from the oil sands as it costs to get from regular drilling methods. Second, since extraction is such an expensive process, production is already about as high as it can go. Third, they’re using so much water in the extraction process that the environment can’t sustain much more than what’s going on now.

  2. Yes, but that’s part of my argument! It’s not impossible, it’s just a challenge. We do have the ability to come up with a better way, we just need incentive to do so. To say that it will never be done is to say simply that we don’t care enough to try.

    That’s the way the world works, everyone needs an incentive.

  3. The oil sands ARE being developed, and have been for the last 35 years or more. I encourage you to read more about it – simply Google "oil sands". Yes, it is a little more expensive than extracting conventional crude, but the oil sands companies are performing very well in spite of it.

  4. I have visited the oil sands twice, spent a lot of time learning about it in high school, have friends whose parents work there, took the time to think about it before writing this post, follow the news, etc. so I know progress is being made (a Google search isn’t always the answer). What I am arguing, however, is that we can do better.

    Imagine if something like the Ansari X Prize was held to help come up with new ways of extracting oil from tarsands. That competition probably single-handedly paved the way for private space flight, a major accomplishment. Look at the competition for robots to travel across the desert on their own (I forget the name, sorry). That competition also had a huge impact on what we’re capable of doing.

    Incentive, incentive, incentive! Oil companies have too many issues to deal with to sponsor a program that I am describing (they have to deal with environmentalists, competition, government regulations, etc.) If the government itself were to sponsor such a program, I am really confident we’d see some amazing progress that would let us really benefit from the oil sands in a big way.

    Remember, progress is relative. I’m not comparing it to other industries in Canada. I’m comparing it to oil production on the world scale, and in that comparison, the oil sands could be doing so much better.

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