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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

BP and the federal government say theyre weighing different options for the final, permanent sealing of the blownout oil well in the Gulf of Mexico. The disaster has left lingering questions about where our oil comes from, and what we're willing to do to find it.

NORRIS: Today on MORNING EDITION, we heard about the oil boom in North Dakota. Now, NPR's Martin Kaste takes us to Canada. That nation has become America's single biggest foreign source of oil. But it's oil that comes at a steep environmental price.

MARTIN KASTE: When the weather warms up in northern Alberta, you'll sometimes get a whiff of something something like fresh asphalt.

Mr. RAYMOND CARDINAL: A lot of people tend to use the phrase: Smell my...

KASTE: Raymond Cardinal worked for 20 years in Alberta's oil sands. It's just what it sounds like vast deposits of petroleum mixed with sand. Since the 1960s, Canadians have been digging it up in open-pit mines. Cardinal is standing near one such hole just off Highway 63, north of the town of Fort McMurray.

Mr. CARDINAL: That's huge. I couldn't tell you exactly how big it is. Probably would be about half-hour to drive around.

KASTE: Everything about the oil sands is huge. The electric shovels, the 400-ton dump trucks, and the towering facilities in which hot water washes the oil out of the sand. It takes up to four barrels of water to make one barrel of this kind of oil. And after the process, the water is too dirty to go back in the river. So they store it in what's called tailings ponds, though the word pond hardly does them justice.

(Soundbite of cannon)

KASTE: That's the sound of cannon echoing over the expanse of toxic water.

(Soundbite of cannon)

KASTE: The booming is supposed to scare off migrating birds. In April of 2008, 1,600 ducks alighted in one of these tailings ponds and died.

(Soundbite of highway)

KASTE: On Highway 63, a convoy of buses takes workers home after a shift change - 70 buses in a row, before we lose count.

Raymond Cardinal says he's glad he no longer works in the mines.

Mr. CARDINAL: It was hard 'cause you saw what they were doing to the landscape. It made it difficult, especially if you were raised in this part of the country and you see the destruction that happens, you know.

KASTE: But the pit mines may soon become a thing of the past. Canada's oil sands reserves cover an area roughly equivalent to North Carolina. But most of it is too deep to dig up. So the Canadians have found another way to get it out.

(Soundbite of machinery)

KASTE: In a forest clearing in eastern Alberta, Greg Fagnan of Cenovus Energy shows off a series of pipes that run straight into the ground.

Mr. GREG FAGNAN (Cenovus Energy): Think about an 800-meter straw.

KASTE: The straws are sending 500-degree steam straight down to cook the ground below.

Mr. FAGNAN: Just think of it as a percolation stream all the way down that just - you know, poof, poof.

KASTE: The steam is melting an underground deposit of bitchumen. That's the technical name for oil sands. Bitchumen is usually sticky, tarry stuff. But the steam loosens it up enough to be pumped to the surface and into a tank, where it's separated from the water. To take a sample, you just open a tap.

Mr. FAGNAN: Oh, there we go. Gusher.

KASTE: And out comes hot petroleum. As the gases bubble out, the oil sparkles in the cup like a velvety coke. This used to be an experimental process, but steaming the oil sands is fast becoming the norm. Cenovus is expanding this site, called Christina Lake, with an eventual production goal of more than 200,000 barrels a day.

The company flies its workers in. Hundreds of them work and live on the site. And Cenovus is still expanding the comfortable living quarters. The mandatory hockey rink is already in place, complete with a Zamboni. And in the forest outside the Cenovus site, there are more modular buildings.

Ms. FRANKIE KAREN: This is a remote cap location.

KASTE: This is Frankie Karen(ph). Once a month, she commutes here from British Columbia to run the camp housekeeping staff. These remote camps are common in this part of Alberta. This one is overflow housing for contractors and others serving the oil industry.

Mr. KAREN: In our particular camp on this side, there's 300 men camp here. There's an open camp which is further down, which is another couple hundred. And the other camp over here holds about 500 people.

KASTE: And the industry needs these workers. Production using steam and other underground methods is growing. It's on track to produce most of the barrels coming out of this region within five or six years. Supporters say that's good news. It's billions of barrels of oil without the open pit mines. But there are down sides. The networks of steam pipes and roads can still disturb the ecosystem in the pristine boreal forest. And then there's this...

(Soundbite of steam generator)

Mr. FAGNAN: This is a steam generator, a really big steam generator.

KASTE: That steam they send down the pipe to melt the oil sands? This is where it comes from. Greg Fagnan shows off a building full of boilers, all furiously burning natural gas.

Mr. FAGNAN: We're burning fuel to produce steam and send it down hole.

KASTE: It's a lot of energy to send down a hole, even if another form of energy is coming up. For every barrel of oil that comes up, Cenovus has to burn about 750 cubic feet of natural gas. A natural gas-burning car could drive 170 miles on that.

Simon Dyer, who tracks the oil sands for an environmental think tank called the Pembina Institute, says it doesn't make sense.

Mr. SIMON DYER (Pembina Institute): Some people have described this as a kind of reverse alchemy, where you're taking a relatively clean-burning energy and natural gas, and using it to create a much dirtier source of energy.

KASTE: In fact, when it comes to global warming emissions, steaming oil out of the ground is worse than the pit mines. And the mines were already worse than conventional oil.

The industry says oil produced with steam generates up to 15 percent more greenhouse gases. But critics say the difference is more like 40 percent. Either way, this kind of oil production is worse when it comes to climate change. Cenovus says it's finding ways to reduce its per barrel emissions. But Simon Dyer says that doesn't solve the larger problem.

Mr. DYER: Virtually every environmental indicator is actually worsening, you know, in a cumulative sense because those per barrel improvements are sort of washed away by the increases in production.

KASTE: And production will keep increasing. The reserves contained in those Alberta sands are huge, an estimated 170 billion barrels worth that's decade's worth of oil. But most of it is deep underground, so it'll be reached only with energy intensive methods like steam.

David Goldie, vice president at Cenovus, says that's just reality. The age of easy oil, he says, is over.

Mr. DAVID GOLDIE (Vice President, Cenovus): Now, we're at the stage where fields are depleted. We're going after the - harder to get oil and having to use technology to figure out how to get it out of the ground.

(Soundbite of construction)

KASTE: At Christina Lake, Cenovus is building new facilities to last at least 30 years, including big, new holding tanks to feed the growing network of pipelines that are now taking oil to the United States.

Martin Kaste, NPR News.

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