Humanities addiction to oil has become a global crisis, as energy needs continue to skyrocket. Because of this, Alberta’s oil sands are being touted as a ‘bright light’ for the province. Although industry and government alike have been criticized for ignoring the true costs of the operation, they continue to maintain that the oil sands are an economic necessity. This series will look at the main economic, social and environmental justifications for the oil sands, and present alternative views.
Argument 1: The Oil Sands Provide a Stable and Growing Economy for Alberta and Canada
Industry touts that there are currently 456 000 direct and indirect jobs created by the oil sands, while more are being created every day. (OSDG, an industry funded association)
The figure implies that in the:
- Short-term: Alberta’s economy will no doubt enjoy the economic benefits that oil is providing, in the form of jobs and injected capital.
- Long-term: The number of jobs that rely on the presence of oil will become detrimental to the economy. Guaranteed oil exhaustion will put hundreds of thousands of well paying jobs into peril. This is only natural, as structuring an entire economy around a finite resource only invites an eventual collapse in the system.
“As demand grows in the next decade, we will not have the oil production capacity we will need to meet demand. Supply will then have to ration demand, and prices will skyrocket – with the likely outcome of bringing the world’s economy to its knees.” explains John Hess, chairman of Hess, a large, international energy company based in the United States.
Furthermore, Alberta's tourism industry has been targeted because of the oil sands. In 2010, Corporate Ethics International launched a billboard campaign that encouraged Americans to rethink visiting the province, which would block valuable tourism dollars from multiplying through Alberta’s economy. The message of the campaign was simple, Michael Marx of CEI stated that he wanted “Alberta and Canada to quit interfering in our efforts in the United States to end our addiction to oil and transition to a clean energy economy.”
Even Barack Obama maintains that renewable energy sources will be the economic power house of the future; he claimed that "the country that figures out how to make cheaper energy that's also clean, that country is going to win the economic competition of the future.”
Please comment below if you have questions, comments or ideas.
6 comments:
Here's an interesting article, 20% of the oil sands may become protected:
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/albertas-proposed-environmental-laws-would-cancel-oil-sands-leases/article1971930/?utm_medium=feed&utm_source=feedburner&utm_content=My+Yahoo&utm_campaign=Feed%253A+TheGlobeAndMail-Business+%2528The+Globe+and+Mail+-+Business+News%2529
You may have sensationalized the "job loss" argument for the long term effects of the oil sands. You mention that the oil will eventually be entirely consumed (obviously); however you do not give an honest timeframe or any time frame at all. Oil will not dry up overnight, in fact the largest producers, and consumers of oil in the world are already aware of when peak production will be declining. Recent reports state that Saudi Aramco has been overstating their reserves for years. As a result new estimates state that we may already be at the cusp of peak production. This should be great news for you. Now what does this mean for your job argument? It means that the effects of declining oil production will be diluted across 50+ years. Layoffs and transitioning away from high capacity oil production will be gradual. Alternative energy methods do exist; in fact many are very well developed and are ready for mass consumption (but are they feasible in all geographical locations.) Given this fact, as well as the prediction that peak oil production will decline starting “today,” you should be optimistic. It is extremely likely that the energy giants already have plans in place to allow their company to smoothly transition to other products in the future. Actually this is not likely, it is a fact. Ironically enough, if there were such magical alternative resources that we could switch to at the drop of a hat, it would have the same effect as if we dried up world oil reserves (re: your long term economic tragedy for Alberta/oil producing nations.) Some bad news: promising research has been done on creating synthetic “crude “oil.
Bottom line: Oil will be mass extracted and consumed as long as it is still economically feasible for the corporate giants who utilize the resource. They control the market. It has nothing to do with individuals driving big SUV’s. Gasoline is already on its way out, and it is really a dead issue. No one can argue that automotive companies are not already transitioning forward. Name one Auto Company who has not already produced electric, or hydrogen fuel cell cars. Most have hybrid models in production at very affordable prices; some already have full electric models in production. This is great, because about 60% of petroleum goes on to be used as transportation fuel. Regardless oil will always need to be extracted. We are not all of a sudden going to find an alternative to producing rubber products, some plastics, asphalt, lubricants and specialized fuels.
This whole situation is incredibly complex; it involves factors from almost every single academic discipline. The Obama quote you used really drives the point home. The president is acknowledging how unlikely and difficult it will be to implement alternatives to petroleum in our lifetime. “…cheaper (net) energy that’s also clean (net)…” Currently this is as hypothetical as a perpetual motion machine. If only we could utilize my bullshit as an alternative fuel, it is certainly abundant.
Alberta's oil sands are expected to run out by 2060, unless new technology is invented which can economically extract more of the oil sands.
Many of your arguments will be addressed in further posts!
Also, I think may be surprised to find that many of the oil companies are NOT actually planning a smooth transition, but putting more and more money into new technologies to extract the rest of the sands.
I spoke to Don Thompson, president of the oil sands developers group, who said that some companies are not even investing in renewable technology at all.
While extracting heavy crude does take longer and it does cost more, as long as the price per barrel of oil is at least $50 it will still be profitable. And when something is profitable it is still worth it for a corporation. And we can all agree that oil will only grow more expensive, which only furthers the desire for the big boys to further development in heavy crude. So while they say the in-situ methods are not currently economical to extract the "unextractable" heavy crude, keeping technology the same in the future (which they wont be, they will be better) the in-situ processes will eventually become very profitable.
Note on price: The major profitability will be as a result of very high oil prices attributed to --> diminishing reserves, stockpiling, expense to produce, higher populations, India/China's excessive development etc. We are all well versed on these points.
We leave out major temporary events which in the the very short term (0-2 year effect) alter the price (higher or lower) such as wars, natural disasters, and financial crisis. We can agree that the average price of oil will never be close to $50 (will be substantially higher.) Also, multiple world government policies ensure that oil does not reach a certain minimum threshold or "maximum" via stockpiles. I know it's redundant to say, but I must be said to clarify the first point.
Furthermore, if your "run out date" estimate was true, then I have faith that with 40 years of R&D (not to mention R&D already taken place) they will have come up with new methods to more efficiently/profitably extract the oil.
Here is a quote from the OSDG:
"Extracting the oil from the oil sands was considered an economic impossibility about 50 years ago, but innovation overcame those barriers."
It seems to me they are very optimistic about the likelihood of being able to access that last 315 billion barrels.
Within the last 3 years, every single oil company with operations in the north have announced plans to increase daily production volume. Sounds like more optimism to me. This does not indicate slowing down. If Canadian economists/world economists, the Canadian/world governments, and oil companies really took the 2060 estimate to heart, then we would be enjoying $200/barrel right now. The companies are extremely optimistic that they can drain Alberta of 100% of it's heavy oil as well as 100% of Venezuela's heavy oil, because if they truly were unsure, then we would be at the tipping point to other alternative energies, but as you adamantly point out, clearly we are not.
CONTINUED...
I am going to try and do some research as to what sort of R&D and investments companies like BP, Conco, Exon and Shell are doing, because I am very sure they are doing something.
Regarding Don Thompson and his industry funded not for profit propaganda machine:
Frankly I am surprised you put stock into him and his organization. They are essentially a public relations/lobbyist group that works on behalf of the oil companies in Alberta. Their purpose is to counter the anti- "tar" sand sentiments from organizations and public figures such as Layton and Green Party's Elizabeth May.
Also the OSDG is not concerned with alternate environmentally friendly energy technologies, they are first and foremost "concerned" with alternate environmentally friendly heavy crude oil extraction technologies. Their role is to demonstrate the good things that companies are doing to help alleviate the negative media surrounding the oil sands.
I would not put much stock into what Mr. Thompson says regarding the renewable R&D of oil companies. He probably possess many lifetimes worth of knowledge then I will ever have, especially when it comes to the O&G industry; regardless, I am surprised he would say such a thing given his role as an ambassador for the image of these corporations. I am sure he would retract his statement on a wider stage.
I'm looking forward to the remainder of your critique.
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