World oil consumption is rising, the IEA says that demand may reach 110m barrels per day. For Alberta’s tar sand, where tar sands contain the world’s second-largest trove of oil, this is great news. The Canadian Association of Petroleum (CAPP), says that the sands will produce nearly 3.5m b/d by 2025.
The IEA says that the production of oil that is easy to reach with conventional methods, like drills and wells, is at its peak and there is a necessity to look towards new sources like the Alberta tar sands. With 173 billion recoverable barrels, the tar sands are worth 15.7 trillion, where Alberta will gain some of the wealth, the rest going through Canada with contracts of goods and services and even some going to poorer eastern provinces.
Because Canada is America’s biggest supplier of oil and petroleum, TransCanada is looking at building a $7billion pipeline, named Keystone XL, that would send 510,00b/d of oil from Alberta to refineries in Texas. With the 2010 gulf oil spill still on people’s mind, many are uneasy about the environmental risks associated with such a long pipe. It seems like whenever new locations of oil are found, they are in an environmentally rich area. Environmental concerns around Alberta’s tar sand include threatening local rivers, poisoning fish, destroying landscape, killing wildlife and polluting the air. It will be interesting to see if Canada looks past the environmental risks for the economic gains.
3 comments:
This is a nice and long article. This might be a good investment for Alberta in terms of increasing the standard of living and reducing the unemployment rate. At the same time, this will increase the economic cooperation between Canada and the United States. This might be a key to reduce foreign oil overseas and focus on what's around us. There is no question that the oil prices will continue to rise due to increasing demands from China, India, etc. So this makes sense economically.
On the other hand, there is no question that it would further harm the environment, but in this case, the companies are willing to do it environmentally friendly as much as they possibly could. There is a fear that there might be an oil spill along the oil pipeline like the one in Deep Horizon's case.
Although, the environmentalists point that we shouldn't touch the tar sands. This way, it would increase the value of oil to the point where no one would want to buy anymore and this would result in a blooming age for alternative fuels.
Again, this is debatable.
Extracting oil from the tar sands will create substantial environmental problems, not only from the possible threat of a pipeline burst as mentioned previously but from the actual extraction of the oil itself. The money spent on the technology and construction for this major project could have instead been spent in renewable energy resources and technology, this not only makes environmental sense but economic sense as well. Investing in renewable energy technology is necessary in our future, so why not invest in it now instead of delaying the inevitable?
I realize this is easier said than done, the renewable technologies are a long term investment. And I doubt the United States would not have done the same as Canada. But the U.S. and the world need to look towards the future.
In the short term, oil may be the easier and more beneficial method, but Canada should be investing in renewable energy. By using the influx of money from their oil sands, they could create wind farms, solar dishes (created by e-solar in the US, they can utilize all angles possible by tracking location-specific patterns of the sun), and begin investing in the algae industry. These three forms of energy production could help Canada be a major supplier of energy to the western United States, an enormous market. While changing the technology and re-training labor, in the long run it would be beneficial (renewable energy involves more domestic jobs on average) for Canada to take the route of environmentally friendly sources of energy.
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