Oil sands: burning energy to produce it

Everything about the Alberta oil sands development is impossibly big. Monster-sized trucks and giant excavators are carving up hundreds of square kilometres of land, thousands of kilometres of pipelines and roads have been laid, and millions of litres of water are being super-heated to process millions of tonnes of rock and sand.

Producing oil from oil sands uses impossibly large amounts of energy. The mining-extraction process requires about 750 cubic feet of natural gas for every barrel of bitumen. The "in situ" process that pumps super-hot steam 1,000 metres underground requires 1,500 cubic feet of natural gas to produce a single barrel of oil. 2 Bcf (billion cubic feet) of gas will be needed for the entire oil sands operations by 2012 - almost enough gas to heat every Canadian home. Due to the enormous consumption, local sources of natural gas are declining and will not be sufficient to meet future needs of the oil sands development. Other future energy sources being considered include the building of several nuclear power plants or coal bed methane plants.

Producing one barrel of oil from oil sands emits three times more greenhouse gases (GHG) than production of conventional light or medium crude oil. Oil sands currently pump out 23 megatonnes of such emissions, and are the fastest rising source of greenhouse gases in Canada. Oil sands mining and refining have also dramatically increased the levels of air pollutants such as sulphur dioxides, nitrogen oxides, particulate matter and volatile organic compounds.

- I continue to refrain from supporting tar sands companies via buying their shares. There is an ongoing recommendation from my investment guru on one such company - its shares have been knocked down 50% in the May/Jun crash. Normally my trading instincts will say to buy and make 100% or more on the rebound, but in this case I refuse to do so on ethical grounds. There are other, better candidates for achieving 100%.

Exploiting tar sands is a desperate last resort. Burning cleaner-burning, high-quality natural gas to extract polluting, low-quality oil smacks of craziness. The proposal to build nuclear power plants to help extract the oil from tar sands instead of using the enormous amount of generated power directly reeks of insanity.

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