How Will the Alberta Oil Sands Affect Future Generations?

Introduction

Alberta oil sands’ success is complicated and often criticized; nonetheless, oil sands are a major part of the Alberta economy and create employment opportunities. This short commentary will investigate how Alberta’s oil sands are a ticking time bomb for the province and the country as a whole.

Alberta’s Oil Sands

In 2023, Canada produced 5.6% of the world’s oil, 80% of which was produced in Alberta’s oil sands (U.S. Energy Information Administration, 2023; Canada Oil Production | The industry across Canada., n.d.). Alberta’s oil sands make up 21% of the province’s yearly GDP and roughly 3% of the national GDP (Government of Canada, 2023; Jones, 2024). According to the Alberta government’s website, the oil sands industry emits 70 megatonnes (Mt) of greenhouse gases (GHG) yearly (Ministry of Environment and Protected Areas, n.d.). As of 2021, those emissions are roughly 10% of Canada’s yearly GHG, but they are expected to grow by 2030 (Heyes et al., 2018).

Yet oil sands may not exist if not for the Alberta, Ontario and federal governments stepping in with financial support in the 1960s, 80s, and 90s, which can still be seen today with the Kinder Morgan pipeline (Wilt, 2018). In 1995, the Alberta government agreed to a generic royalty regime for the oil sands industry that only charges 1% of revenues until the project has recuperated its capital cost. Since the publicly funded oil sands showed signs of profit, private investment supposedly dominated the industry in the 2000s. Yet public money still finds a way into these projects through grants for innovation, carbon reduction, and transportation.

Oil sands have a return on investment (ROI) of around 4:1 to 7:1 (Canadians for a Sustainable Society, n.d.). For reference, drilling has a return on investment of 25:1.

Oil Sands Emissions

Oil produced from oil sands has also been shown to have much higher emissions than other oil sources. In 2015, the California Air Resources Board found that Western Canada Select emits 18.43 grams of carbon per megajoule (MJ) of energy used in production. For comparison, North Dakota Bakken crude emits 8.71 grams of carbon per MJ, 47% less than Western Canada Select (Heyes et al., 2018).

Currently, the Pathways Alliance is proposing a carbon capture facility in Northeastern Alberta to reach carbon neutral by 2050 (The Pathways Alliance, n.d.). Carbon capture technology has been criticized for its environmental risk, expense, and infrastructure requirements. Additionally, these facilities capture carbon during production and not after combustion. This effort seems like a great expense, CAD 16.5 billion specifically, that the oil sands industry is once again expecting to be picked up and financially backed by the Alberta government.

Boreal Forests Affected by Oil Sands

Boreal forests account for approximately 20% of global carbon sinks but are highly at risk due to climate change. It is believed that Boreal forests will be affected by an increase in fire disturbance and higher temperatures as climate change progresses (Espinosa-Leal et al., 2019). This belief has implications for the future reclamation of oil sands, which have disturbed 940 thousand hectares, of which 0.1% has been restored and returned to the province (Lothian, 2017).

Currently, there are 95,300 hectares of land leased for oil sand mining, which will eventually need to be reclaimed and restored to functioning ecosystems (EnergyNow Media, 2022). In 2010, it was believed that reclamation would cost approximately CAD 220,000 to 320,000 per hectare in the region, resulting in a minimum cost of CAD 20.7 billion (up to CAD 30.1 billion) (Lemphers et al., 2010). Recently, the Alberta Wilderness Association estimated the cost of reclamation to be CAD 130 billion (Anderson, 2019). The total calculated reclamation costs for the oil sands mining industry was only CAD 27.8 billion, which aligns with Lemphers et al.’s (2010) estimation. In the calculations below, we will assume that reclamation costs will be the average value of approximately CAD 80 billion.

Boreal forests are thought to sequester and store 11 teragrams (Tg) of carbon per year in Canada (Kurz et al., 2013). As the Canadian government rolls out carbon sequestration strategies across the country, tree planting being one, it seems that the 94,095 hectares in Alberta’s oil sands would be the perfect place to introduce this strategy. Not only will the area require restoration in the next 30 years, but the area is a large carbon sink that is currently not in use.

Table 1 shows a breakdown of the details and costs of oil sands reclamation.

Table 1: Details & Costs of Oil Sands Reclamation

Note. All $ amounts in CAD. Information on oil sands is from the Canadian Encyclopedia (Davidson, 2014), EnergyNow Media (2022), Environmental Defence Canada (Chow-Fraser & Rougeot, 2022), Alberta Wilderness Association (Anderson, 2019), and Lemphers (2010). 

Media Attribution

Figure 1: “Athabasca Oil Sands” by Jesse Allen and Robert Simmon [using EO-1 ALI data courtesy of the NASA EO-1 team. Caption by Holli Riebeek] (2009), via NASA Earth Observatory, is used under the NASA Media Usage Guidelines.

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