Giant dump trucks carry 400 tons of sand a piece to a crusher at a nearby processing plant where the process begins to separate the oil from the sand.- Sean Cole/Marketplace
The oil sands mines and production operations are in the midst of the boreal forest in northern Alberta, about 460 miles north of Calgary. Every major international and Canadian oil company is somehow involved.- Sean Cole
Shell Canada has held a production lease on this land since 1956, but it didn't make first oil here until 2002. Albian Sands is mostly owned by Shell. Chevron and Marathon each own a 20 percent share.- Sean Cole/Marketplace
An excavator loads 400 tons of sand into each truck per pass. The trucks then drive them to a crusher to begin the bitumen extraction process. This happens 40 times an hour.- Sean Cole/Marketplace
Each truck can carry 400 tons of sand. The trucks then drive them to a crusher to begin the bitumen extraction process. This happens 40 times an hour.- Sean Cole/Marketplace
The dump trucks at Shell Albian Sands have 13-foot high tires. This one set the project's record for longest life, lasting 9,855 hours. So Shell employees autographed it.- Sean Cole/Marketplace
The view from Shell's tailings facility gives you a sense of what this mine used to look like. One day the land will have to be turned back into forest.- Sean Cole/Marketplace
Shell uses a robotic falcon to scare ducks and geese away from the oily water of the tailings pond.- Sean Cole/Marketplace
Devon Canada's Jackfish project is located about two and a half hours south of the oil sands mining area in Alberta. This is an 'in situ' project, meaning it extracts the bitumen that's too deep to mine.- Sean Cole/Marketplace
In situ extraction looks less impactful than mining. But The Pembina Institute in Calgary says it may have more of an impact on the land, due to all of the pipelines and roads, etc., required for in situ development.- Sean Cole/Marketplace
Surprisingly, most of what Devon does at its Jackfish site is process water to make steam. The teardrop shaped silo is called a hot lime softener, or HLS.- Sean Cole/Marketplace
Devon uses only salt water in its production process. It gets the water from a brackish underground reservoir. Many in situ operations use fresh water in production.- Sean Cole/Marketplace
Once the bitumen is pressured out of the ground, Devon adds a diluent to it so it will flow better in the pipeline en route to an upgrader farther south in Alberta.- Sean Cole/Marketplace
In Devon's tap room, it can gauge the quality of the product at any stage of the process. This is bitumen mixed with the cutting agent that helps it flow.- Sean Cole/Marketplace
A well-head like this one sprung a leak not long after our reporter's visit. It sent a steamy mist of water and bitumen about 36 feet into the air for 36 hours.- Sean Cole/Marketplace
Extracting oil from Canadian sand pits
TEXT OF STORY
Kai Ryssdal: From the bottom up, the top five sources of American oil imports are Nigeria, Venezuela, Saudi Arabia, Mexico. And in the number one spot: Canada. Twenty-one percent of all the crude we use comes from north of the border. About half of that from something called the "tar sands." Big oil and many Canadians prefer to call it the "oil sands." Whatever you call it though, it has also been called the world's dirtiest oil. The way things are going, 20 years from now, a full third of our imported crude could be coming from the sands -- oil or tar, take your pick.
That's why we sent Sean Cole about 500 miles north of Calgary to look what we do to fill our gas tanks.
Sean Cole: This is the sound of the biggest dump truck in the world.
Sound of dump trucks driving
Imagine a two-story house on wheels with a guy steering it from the upstairs bedroom. There are more than 40 of these things rolling along a sprawling strip mine cut into a boreal forest.
Each can ferry 400 tons of sticky black sand from an oozy cliff to a nearby processing plant. The project is called Shell Albian Sands. Shell as in... Shell. I'm standing a safe distance away with one of the managers.
Cole: You can smell it.
Todd Dahlman: You can, yeah. You can smell the oil.
But it's not oil in the ground here. It's a hydrocarbon called bitumen that has to be processed into an oil equivalent, synthetic crude, using one of the most expensive and energy intensive processes in the world.
David Corriveau: The process requires a warm water process for the most part to separate it.
David Corriveau oversees the technical end of things at Shell Albian Sands.
Corriveau: It's much like a washing effect if you will.
Cole: It's like putting it in a washing machine.
Corriveau: Very much so, yeah. Yeah, exactly. And it can be a little... quite the stubborn stain if you're not careful so.
It takes two to four barrels of water to wring one barrel of fuel out of the sand. The water's heated with natural gas. This industry uses enough natural gas to heat two and a half million American homes a day. Almost every major international and Canadian oil company is somehow involved in the oil sands. After all, there are 170 billion barrels of proven reserves under northern Alberta, the largest petroleum reserve outside Saudi Arabia. The process of turning it into fuel would take the entire show to explain. It's a pain. Even the most loyal defender of the oil sands I spoke to had to level with me.
David Yager: Let's be honest about the oil sands -- this is the last place you wanna go.
His name's David Yager and he writes a column for Oil Week magazine.
Yager: I mean, why would you bother going to the middle of nowhere, and digging up sand and spending all this energy processing it.
And then he pretty much answered his own question.
Yager: You know, if we can go into Iraq without getting shot at, if you could go into Venezuela without getting nationalized.
Yager: Yeah, if you could go to Nigeria, if you could go to these places, I suspect gasoline would be 50 cents a liter and oil would be 20 bucks a barrel.
Weirdly, it's the price of oil that governs these projects though, not the other way around. Oil has to cost a certain amount in the first place to make digging in the oil sands worthwhile. And that's just the economics. There is, of course, another kind of cost.
Yager: That developing the oil sands is environmentally hazardous?
Yager: Well, yeah. The Gulf of Mexico's not lookin' too s***-hot these days either. I mean, there's no such thing as clean oil. This is the absurdity of the debate.
And this is an intractable debate with agendas and spin on all sides. Everyone agrees oil sands production emits more CO2 than producing conventional crude oil, but people measure this differently. The Canadian government was looking into potential water effects, but finally scrapped the investigation and destroyed draft copies of the report. Local aboriginal groups have sued over land rights.
Andrew Logan: If the industry doesn't take steps to aggressively manage those risks, then the industry's long-term growth and perhaps existence is in doubt.
Andrew Logan works for Ceres, a network of environmental groups and investment funds. Ceres released a report back in March saying these ecological hazards could leech into the money side of things.
Logan: You know, the oil sands are extremely water intensive in a world that is dry and getting drier. They are carbon intensive in a world that is increasingly carbon constrained. If companies aren't considering these kinds of factors when they make their investments, these investments may turn out to basically not be profitable.
Now, Shell, for one, says it is considering these factors. And even Ceres will tell you Shell's done a lot to reduce CO2 emissions and that it recycles most of the water it uses. The rub lies in how that water is stored.
You know we haven't even addressed the issue of the tailings ponds.
I know, that's where I'm going next. Every oil sands mine keeps used water in a giant lake called a tailings pond. Tailings ponds are toxic. And just recently, oil companies were required to hand in specific plans for reclaiming them, which means turning them back into forest.
Logan: You know, the clean up of these things will end up on the balance sheet of these companies pretty soon. And it's gonna have a pretty significant financial impact on any company that has to clean up these ponds.
But there's a more immediate issue with tailings ponds. Ducks and geese can get fouled up in the oily water and drown. Thus, Shell is using the latest in bird-deterrent technology -- a robotic falcon and a sound cannon.
Recorded falcon cry and a sound cannon
Cole: And that scares away the birds.
Scott Wytrychowski: Yeah, the peregrine falcon is a bird of prey for the water fowl so they fear it.
Scott Wytrychowski is an environmental manager at Shell. He told me they lose fewer than 20 birds a year.
Wytrychowski: Our end goal is zero.
Cole: Zero birds.
Wytrychowski: Yeah, it's like safety -- we want to have zero incidents for safety for humans. It's similar to wildlife. Target is always zero.
Cole: But there are accidents.
Cole: And there are birds who die.
Wytrychowski: Yes. Yup.
In fact, two years ago, 1,600 ducks died after landing on another company's tailings pond. Pictures from the incident are now plastered across billboards in four U.S. cities. And all of this isn't even half the story. In fact, it's one-fifth of it. Eighty percent of the bitumen underneath Alberta is too deep to mine, which hasn't stopped the oil companies from going after it.
I'm Sean Cole for Marketplace.