“Political, Misleading or Downright Wrong”

The Washington Post attempts to explain the significance of KXL beyond Capitol Hill politics – and misses a few facts along the way

It’s long been a source of pride for folks in Washington, D.C. to be living in one of the “best-educated” regions in the country, a status to which it lays claim thanks to the outrageously high ratio of residents in possession of a college degree (“smartest” is a different matter).

But when it comes to issues relevant to the debate over Canadian energy and the oil sands, it’s safe to assume that, among most folks in Washington, Canada’s role as our number one supplier of imported oil goes unnoticed and only one word comes to mind: Keystone. That’s why we were excited to hear that the Washington Post  was breaking free of the Beltway to head up to Alberta to do some reporting on the issue.

Based on tours of the Athabasca oil sands region and speaking to a diverse set of interests along the way, the story attempts to explain the somewhat foreign process of oil sands extraction to a Washington audience more familiar with campaign promises to build KXL than the reasons behind it.

While there were many things the article got right, there are a few points that remain unclear. As MEG Energy spokesman Brad Bellows told the reporter, much of the criticism of oil sands development is “political, misleading or downright wrong.” Well Mr. Bellows, we tend to agree, and we’re checking the facts on this story in hopes that the 38 percent of Americans who are against KXL may have a change of heart – or at least be better informed.

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WaPo: “The rush to expand [oil sands development] has been fueled by high oil prices.”

• Sure, more energy production means more supply, which in turn can bring down the overall cost of oil. But the rate at which we’re seeing the oil sands develop has less to do with oil prices and more to do with improvements in the technology being deployed. Advancements in drilling technology such as directional drilling are generating significant production power, allowing as many as 20 wells to be drilled at a time. And according to the Canadian Association of Petroleum Producers (CAPP), oil sands production is projected to more than double by 2025 thanks in large part to innovations in drilling technologies as compared to more traditional mining operations.

WaPo: “A new Washington Post poll finds nearly six in 10 saying the U.S. government should approve the project. Its wide acceptance is rooted in the fact that 83 percent think it will create jobs. Nearly half think it will not cause significant damage to the environment.”

• Many experts think KXL will create jobs and not have significant environmental impacts too; in fact, they know it. Data from the Canadian Energy Research Institute concludes that the U.S. will fail to create 10,000 new U.S. jobs this year due to the delay in KXL approval. That number jumps to 45,000 in 2015. And according to the State Department’s supplemental draft of its environmental review of KXL, the pipeline would “have a degree of safety over any other” and “limited adverse environmental impacts.”

• On top of WaPo’s poll findings, Rasmussen Reports found that 60 percent of Americans favor building KXL. Sentiment hasn’t changed much since March 2012, when Gallop reported that Americans favor KXL by nearly a 2 to 1 margin.

WaPo: “Unlike oil that spurts up from reservoirs in most of the world, including Saudi Arabia, half of Canada’s oil sands are dredged up in a process more akin to strip mining.”

• The type of extraction the story is attempting to describe is known as surface or open pit mining and only 20 percent of oil sands reserved can be developed this way – not half. The majority (80 percent) of the oil sands region can be developed using a process known as “in situ drilling,” which produces oil from more than 200 feet below the ground and does not require tailing ponds as the article notes.

WaPo: “Congressional Research Service report released May 15 estimated that Canada’s oil sands produced 14 to 20 percent more greenhouse gas emissions than the average barrel of U.S. imported crude oil — or comparable to low-quality Venezuelan crudes. By other standards, however, oil sands look worse. The ‘well to tank’ emissions (those created just to get the gas to the car) of Canadian oil sands are about twice as high as the average U.S. crude import.”

• And by other standards, oil sands are quite comparable. An analysis from IHS CERA concluded that life-cycle (or “well to wheels”) greenhouse gas emissions are only 5 to 15 percent higher than the average barrel of U.S. imported crude oil, and generally stick around 6 percent. There are lots of other reasons why OSFC thinks the Congressional Research Service report is a bit flawed, and we outlined them all in this previous issue alert.

• Another point to consider: out of the top five countries from which the U.S. imports oil, only Canada has GHG regulations.

WaPo: “Companies expend energy equal to one barrel of oil to extract four to eight barrels from the oil sands.”

• According to calculations by the Canadian Association of Petroleum Producers based on data collected by the Energy Resources Conservation Board, it takes one unit of energy – most often in the form of natural gas and not oil– to get between 6 and 10 units of energy out of the oil sands. Water is used at a minimum as well. Mining processes use 2 to 4 barrels, while in situ processes use even less – 0.5 barrels of water for every barrel of oil produced.

WaPo:  “‘The projects themselves are enormous and ugly — but even uglier is the freight of carbon they contain,’ said Bill McKibben, a Middlebury College professor who has been a leading voice against the pipeline.”

• Carbon is not uniquely “contained” within crude oil from the oil sands. Instead, it is largely released during the combustion process e.g. when you turn on your car or run your lawnmower. According to IHS CERA, 70 to 80 percent of GHG emissions for all sources of crude, including oil sands, occur during combustion. Once the oil is refined, there is no difference between combusting oil sands crude and any other crude oil. Notably, oil sands development accounts for just over 0.1 percent of global GHG emissions.

WaPo: “The process of extracting the bitumen hasn’t changed since it was patented in the 1920s by a University of Alberta scientist, Karl Clark.”

• We get the gist of this statement; bitumen extraction has always involved a process by which bitumen is separated from the other components that make up the oil sands. But to suggest that nothing much has changed at an oil sands production site would be far from the truth. The in situ process – which calls for advanced technology to inject steam or other sources of heat into the ground to warm and eventually extract bitumen – was first used commercially in 1985 and continues to evolve. In March 2012, twelve oil sands companies, now known as Canada’s Oil Sands Innovation Alliance (COSIA) pledged to continue this evolution while improving environmental performance and accountability.

• Two good examples of advanced in situ technologies in action:
  1. Imperial Oil developed Liquid Addition to Steam for Enhanced Recovery in 2005. The process has made drilling more efficient and reduces GHG emissions by 25 percent.
  2. Petrobank Energy has spent the last three years developing THAI technology – Toe to Heal Air Injection – which has proven to produce 70 to 80 percent more of the resource, while using significantly less fresh water. The process brings the bitumen up using natural pressure and allows for partial upgrading underground.

WaPo: “[T]he Pembina Institute says only 1 percent of the tailings ponds have been replanted. Even if land can be reclaimed, a costly undertaking, the greenhouse gases will be long gone into the atmosphere.”

• According to Alberta law, reclamation isn’t an option – every mining site must be reclaimed. Thus far, over 67 square kilometers have been reclaimed and the Lower Athabasca region is showing a species intactness index of 94 percent.
• We question the logic used here as well. If oil sands projects can last for 40 or 50 years, as the article states, and oil sands production became commercially viable in 1963, then many tailing ponds could either still be in use or in the process of re-growing as we write.