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Oil Sands Stand to Gain from Deepwater Horizon Disaster

| Monday May 10th, 2010 | 8 Comments

No one is celebrating the Deepwater Horizon disaster unfolding in the Gulf of Mexico. But once the oil settles, so to speak, one big beneficiary could be the Canadian oil sands industry.

The province of Alberta contains petroleum reserves second only to Saudi Arabia: 173 billion barrels oil in the form of a thick, sticky substance known as bitumen, aka oil or tar sands. This nearby, safe, secure and increasingly cost-competitive source of energy has just one big problem: it is far more polluting to extract than conventional sources.

But now the Gulf oil spill may make the environmental costs associated with bitumen look relatively manageable in comparison.

Don Coxe, a financial analyst, told the Edmonton Journal, “The oilsands were referred to as ‘bad oil’ … but it’s nowhere near the same thing as [the Deepwater disaster]. I hate to say it, but what is really bad news for offshore is good news for the oilsands.”

These sentiments were echoed in an editorial in the Calgary Herald. The paper noted that “to appear triumphalist in the face of the calamity in the Gulf would be insensitive,” but added “there is, however, an opportunity here for Alberta to reinforce the obvious without actually stating it: environmental damage from land-based oil operations remain localized and are more manageable.”

It doesn’t take a petroleum engineer to understand their argument: it is hard to imagine a land-based oil disaster that would be as difficult to control as a gusher 5,000 feet below the surface of the ocean.

In some ways it’s a question of the Devil we know. The environmental costs of oil sands are well documented, and not negligible: toxic lakes capable of snuffing out entire flocks of birds, poisoned rivers, deforestation, and life-cycle “well-to-wheel” emissions 15-40 percent higher than traditional oil, according to Green Century Capital Management, green investment advisors.

On the other hand, each week that passes without a fix to the Gulf oil spill further undermines conventional wisdom that the risks associated with offshore drilling are minimal, or at least manageable.

If the Gulf spill does curtail US offshore development — and the President has already suspended exploration as a result of the spill — then the country will be forced to buy more oil from foreign sources. Where better than friendly, stable Canada?

As if in anticipation of the Gulf spill, late last month the US Environmental Protection Agency determined in a draft statement that a proposed pipeline to bring oil sands crude from Canada to Port Arthur, Texas “would have limited adverse environmental impacts.” The 1,980 mile long pipeline is expected to begin construction this year.


▼▼▼      8 Comments     ▼▼▼

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  • Pete

    Of course, oil from Canada still needs to be transported to the market, either by tanker or pipeline, both of which can spill.

    • mcoc

      good point.

    • http://twitter.com/branto Brant

      And let's not forget that one earthen dam breach send millions of gallons of toxic goo gushing into one of North America's largest watersheds. Sorry to see this industry's “conventional wisdom” being parroted here by TP. Some scenarios to ponderL http://pubs.pembina.org/reports/watersthatbindu

  • huanghuiyue

    Yesterday, the last day of May Day holiday, my friends and I went shopping in the incandescent sunshine. It

    is said that Guangzhou is like a hot pot in summer. That’s definitely true and we witnessed this truth and

    evidenced it by ourselves. However, to my surprise, I found many slim and good-figured girls wear <a

    href=”http://www.fashiontimberland.com/timberland-footwear-c-1.html”> Timberland Footwear with their

    short skirts. It looks pretty and fashionable. And there is just one problem that bothers me—did they feel

    hot?

  • Harry

    Now you to have oil sands in the gulf and Valdez. We are leaders in removing oil form sand .

  • GUCCI SHOES

    Im a honset vistor of your website. How a great article is !

  • Anarchyhour

    The earth's a lot tougher than people think. Oil in the water, though, is far more destructive than carbon emissions and de-forestation.

  • Anarchyhour

    The earth's a lot tougher than people think. Oil in the water, though, is far more destructive than carbon emissions and de-forestation.

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