Articles
31.01.11

Avatarsands

Avatarsands

 

The deity "Oil Baron" reigns supreme in the Athabasca Oil Sands Region. Through the din of petroleum drenched smoke and the pounding of propane cannons, guarded by bitumen buoys the floating sentinels allegedly spooking water fowl from landing on an inviting tailings pond, a giant truck loads 400 tonnes of earth into the mouth of the great Nebuchadnezzar of oil. Belching emissions, emulsifying what was once sustenance of a majestic boreal forest stand, the god releases another barrel of oil to its hungry subjects scrounging relentlessly, desperate for more energy in a scene analogous to F. Scott Fitzgerald's 'valley of ashes' in the Great Gatsby.

 

The indignant naysayers, worshipping the 'god of alternatives', seek to destroy this kingdom of wealth pray for a time when this scene can be erased from both memory and the landscape. The subjects in this land of alternatives are unconstrained by the economic principles of competitive energy needs across their communities. The endless bounty once perceived under the tyrannical regime of fossil fuels will return when gifts from the sun, the wind, and possibly waves adorn their energy systems. The dastardly deity of petroleum riches will not be needed to build this infrastructure it will appear from faraway lands with as little environmental intrusion as the free services graced upon them by ebb and tide of land and sea.

 

We interrupt this cartoon for your regularly scheduled program!

The incarnation of this 'tale of two worlds' is fortunately as obtuse as the recent dance between the politicians, oil barons and environmentalists alike of Alberta; and their partners, US political dignitaries followed by Hollywood tycoons. The optics may make good TV but the events are likely to bring no meaningful dialogue to this clash of titans in Northern Alberta. We know through the Alberta Governments Land-use Framework and the Water for Life Strategy fundamental environmental system capacities are approaching significant thresholds. The real solutions to the real problems will be found amongst those acknowledging there is challenge that needs resolve.

How will production systems, technology, and corporate guidance be influenced by this resolve?

The first challenge that requires attention is the question of sustainability of the oil resource being produced. Sustainability of an oil sands operation is not based on the staple of lease land eligible for continued mining operations. Sustainability of the so called oil sands jewel is based on production of the resource in a manner that does not constrain the right of access to clean air, fresh water, and a healthy landscape for all Albertans. What good can be fathomed when an oil sands producer claims the investment is sustainable because of an extended reserves life, while the value of surrounding natural capital is exposed to ecological catastrophe? Production system design needs to focus on the broader form and function of the landscape to ensure truly sustainable resource extraction. An example of this could be placement of operations with a significant offset from riparian areas. Preservation of these areas could offer vital filtration for healthy ecosystem function during operations and be the anchor of biodiversity when disturbed lands are being reclaimed. Sustainable oil sands production is only possible when the range ecological goods and services are contemplated and system design is best fit into the natural landscape.

A second challenge, 'money never sleeps', another slogan coined from Hollywood dramatization. Some have called for a slowdown in development; capital investment adheres to the time value of money. It creates an unfair competitive environment when a hierarchy of the right to invest is established through political, social, or indeed an environmental agenda. Investment is dominated by market forces. Demand for oil sands products will create conditions for infrastructure development that will support increased supply. Prudent capital does take a breather, however, to evaluate and manage risk. Much debate in valuing natural capital has placed dollar figures on the ecological goods and services an intact landscape provides. Hence, it could be argued that a healthy economy can only be obtained when supported by healthy ecosystems and environment. It appears as no small coincidence to me that the $2 billion dollars committed by the Alberta Government to investment in carbon capture and sequestration technology, could be entirely offset when calculating the carbon capture and sequestration opportunity from an intact healthy boreal forest stand equivalent in size to the area oil sands development in the Athabasca Region. (This number was calculated using data derived from the Canadian Boreal Forest Initiative and my own 'back of an envelope' arithmetic, please contact the author for more detail). The point is simple the cost of oil sands development could be offset by benefits received from a healthy landscape. This does not mean a moratorium on continued oil sands development, but it does mean capital investment could be deployed more effectively under a full cost benefit analysis of valuing natural capital versus the pace of development.

Most politicians, senior oil company executives, and impatient investors will provide advice on the definition of economic success. Few will delve into the topic of acceptable environmental impact when considering development in a sand box the size of the Athabasca Region. Many environmental groups have scored or graded the practices of an oil sands operation with challenges on where improvement can be made. Problems persist, and recent findings of toxic compounds emitting into the Athabasca River contradict government and stakeholder groups advising there has been no net cumulative effect in the Athabasca River from oil sands operations. It would seem a solution to this is to insist the same politicians that rant and rave about economic success should also be required to deliberate on ecological success. The concept of ecosystem based management planning places value on natural capital, and seeks to establish guidelines to ensure the integrity of a landscape is assessed. Development occurs leaving the essential features and function of the landscape intact.

The business of hydrocarbon extraction is increasing in complexity. In Alberta, as is the case in many other oil bearing provinces around the world, demand for both hydrocarbons and the interconnected natural resources that entomb the oil prize are also being drained from increased demand. The jewel in these regions is the diverse range of natural resources that support the home economy. The Alberta government has responded by developing the Water for Life Strategy and the concepts for a Land Use Framework. Desired outcomes for these policies are, a healthy economy supported by our land and natural resources, healthy ecosystems and environment, and people friendly communities with ample recreational and cultural opportunities. Just imagine responsible resource development and use, and communities that legislate and adhere to truly sustainable resource extraction. These are powerful strategies that have been boldly articulated through public dialogue. Clearly this is the path to an enlightened energy regime where intelligent systems and smart grids respond to human consumption and mitigate risks in environmental intrusion. The alternative is an endless precession of some great television while we consume ourselves to death.

 

For more information contact Patrick D. Brennan, Upstream Research. Phone 403-444-7396 or e-mail pdbrennan@upstreamresearch.ca.

The deity "Oil Baron" reigns supreme in the Athabasca Oil Sands Region. Through the din of petroleum drenched smoke and the pounding of propane cannons, guarded by bitumen buoys the floating sentinels allegedly spooking water fowl from landing on an inviting tailings pond, a giant truck loads 400 tonnes of earth into the mouth of the great Nebuchadnezzar of oil. Belching emissions, emulsifying what was once sustenance of a majestic boreal forest stand, the god releases another barrel of oil to its hungry subjects scrounging relentlessly, desperate for more energy in a scene analogous to F. Scott Fitzgerald's 'valley of ashes' in the Great Gatsby.

 

The indignant naysayers, worshipping the 'god of alternatives', seek to destroy this kingdom of wealth pray for a time when this scene can be erased from both memory and the landscape. The subjects in this land of alternatives are unconstrained by the economic principles of competitive energy needs across their communities. The endless bounty once perceived under the tyrannical regime of fossil fuels will return when gifts from the sun, the wind, and possibly waves adorn their energy systems. The dastardly deity of petroleum riches will not be needed to build this infrastructure it will appear from faraway lands with as little environmental intrusion as the free services graced upon them by ebb and tide of land and sea.

 

We interrupt this cartoon for your regularly scheduled program!

The incarnation of this 'tale of two worlds' is fortunately as obtuse as the recent dance between the politicians, oil barons and environmentalists alike of Alberta; and their partners, US political dignitaries followed by Hollywood tycoons. The optics may make good TV but the events are likely to bring no meaningful dialogue to this clash of titans in Northern Alberta. We know through the Alberta Governments Land-use Framework and the Water for Life Strategy fundamental environmental system capacities are approaching significant thresholds. The real solutions to the real problems will be found amongst those acknowledging there is challenge that needs resolve.

How will production systems, technology, and corporate guidance be influenced by this resolve?

The first challenge that requires attention is the question of sustainability of the oil resource being produced. Sustainability of an oil sands operation is not based on the staple of lease land eligible for continued mining operations. Sustainability of the so called oil sands jewel is based on production of the resource in a manner that does not constrain the right of access to clean air, fresh water, and a healthy landscape for all Albertans. What good can be fathomed when an oil sands producer claims the investment is sustainable because of an extended reserves life, while the value of surrounding natural capital is exposed to ecological catastrophe? Production system design needs to focus on the broader form and function of the landscape to ensure truly sustainable resource extraction. An example of this could be placement of operations with a significant offset from riparian areas. Preservation of these areas could offer vital filtration for healthy ecosystem function during operations and be the anchor of biodiversity when disturbed lands are being reclaimed. Sustainable oil sands production is only possible when the range ecological goods and services are contemplated and system design is best fit into the natural landscape.

A second challenge, 'money never sleeps', another slogan coined from Hollywood dramatization. Some have called for a slowdown in development; capital investment adheres to the time value of money. It creates an unfair competitive environment when a hierarchy of the right to invest is established through political, social, or indeed an environmental agenda. Investment is dominated by market forces. Demand for oil sands products will create conditions for infrastructure development that will support increased supply. Prudent capital does take a breather, however, to evaluate and manage risk. Much debate in valuing natural capital has placed dollar figures on the ecological goods and services an intact landscape provides. Hence, it could be argued that a healthy economy can only be obtained when supported by healthy ecosystems and environment. It appears as no small coincidence to me that the $2 billion dollars committed by the Alberta Government to investment in carbon capture and sequestration technology, could be entirely offset when calculating the carbon capture and sequestration opportunity from an intact healthy boreal forest stand equivalent in size to the area oil sands development in the Athabasca Region. (This number was calculated using data derived from the Canadian Boreal Forest Initiative and my own 'back of an envelope' arithmetic, please contact the author for more detail). The point is simple the cost of oil sands development could be offset by benefits received from a healthy landscape. This does not mean a moratorium on continued oil sands development, but it does mean capital investment could be deployed more effectively under a full cost benefit analysis of valuing natural capital versus the pace of development.

Most politicians, senior oil company executives, and impatient investors will provide advice on the definition of economic success. Few will delve into the topic of acceptable environmental impact when considering development in a sand box the size of the Athabasca Region. Many environmental groups have scored or graded the practices of an oil sands operation with challenges on where improvement can be made. Problems persist, and recent findings of toxic compounds emitting into the Athabasca River contradict government and stakeholder groups advising there has been no net cumulative effect in the Athabasca River from oil sands operations. It would seem a solution to this is to insist the same politicians that rant and rave about economic success should also be required to deliberate on ecological success. The concept of ecosystem based management planning places value on natural capital, and seeks to establish guidelines to ensure the integrity of a landscape is assessed. Development occurs leaving the essential features and function of the landscape intact.

The business of hydrocarbon extraction is increasing in complexity. In Alberta, as is the case in many other oil bearing provinces around the world, demand for both hydrocarbons and the interconnected natural resources that entomb the oil prize are also being drained from increased demand. The jewel in these regions is the diverse range of natural resources that support the home economy. The Alberta government has responded by developing the Water for Life Strategy and the concepts for a Land Use Framework. Desired outcomes for these policies are, a healthy economy supported by our land and natural resources, healthy ecosystems and environment, and people friendly communities with ample recreational and cultural opportunities. Just imagine responsible resource development and use, and communities that legislate and adhere to truly sustainable resource extraction. These are powerful strategies that have been boldly articulated through public dialogue. Clearly this is the path to an enlightened energy regime where intelligent systems and smart grids respond to human consumption and mitigate risks in environmental intrusion. The alternative is an endless precession of some great television while we consume ourselves to death.

 

For more information contact Patrick D. Brennan, Upstream Research. Phone 403-444-7396 or e-mail pdbrennan@upstreamresearch.ca.