Between Cheap Gas And Carbon Caps, Oil Sands Face Uncertain Fate Canada's potentially lucrative oil sands business faces serious economic challenges. It has some concerned about its future as environmental critics look for ways to keep the oil in the ground.
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Between Cheap Gas And Carbon Caps, Oil Sands Face Uncertain Fate

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Between Cheap Gas And Carbon Caps, Oil Sands Face Uncertain Fate

Between Cheap Gas And Carbon Caps, Oil Sands Face Uncertain Fate

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  • Transcript

STEVE INSKEEP, HOST:

Now let's report on a place in Canada that is blamed for adding to climate change. The oil sands in Alberta province hold much of Canada's oil reserves. Oil worth hundreds of billions of dollars is in the ground. Now the people who produce that oil are looking for a way to stay in business in an era of increasing restrictions on carbon emissions. Here's NPR's Jeff Brady.

JEFF BRADY, BYLINE: Stand at the edge of an oil sands mine and all the senses are occupied. It feels very cold outside this time of year. You can smell oil in the air. And there's the hum of huge shovels filling massive trucks. The overwhelming part is what you see, a very large strip mine.

LUKE KILLAM: You're right. It is - it is massive. We're running the largest trucks in the world.

BRADY: Luke Killam, with Shell Oil Company, stands next to what used to be a dense forest. Now it's a 20-square-mile hole in the ground.

(SOUNDBITE OF TRUCK HORN HONKING)

BRADY: We head over to the shop for an up-close look at one of those big trucks. When it's dumping a load, the top of the truck is five stories high. And instead of a few steps to get into the cab, there's a staircase. Shell has more than five dozen of these trucks hauling away 400 tons of earth at a time. The Alberta government requires companies to reclaim this land for nature. But that can take more than a decade after a mine closes. Companies will build lakes where there were none before. Until the water is clean enough for wildlife, migrating birds have to be kept away with hazing systems. They use fake birds of prey and air cannons.

(SOUNDBITE OF AIR CANNON FIRING)

BRADY: Some oil sands companies produce this crude without strip-mining by injecting steam underground. That comes with its own environmental problems. But all the companies face one big challenge. Making this oil usable requires more energy and creates more pollution than traditional drilling. At Shell, Luke Killam shows me what comes out of the ground. It's called bitumen.

KILLAM: Once you've got the protective gloves on, you can pick some up.

BRADY: It feels like - like really sandy Play-Doh, very sticky.

KILLAM: And it's very tacky as well - yeah, absolutely. The bitumen in its pure form is extremely high in viscosity. It's more viscous than molasses.

BRADY: Before this can be refined into gasoline for your car, it has to be mixed with hot water and chemicals, then piped about 300 miles south to a plant for more processing. That requires energy, which means burning fossil fuels to make fossil fuels.

MIKE HUDEMA: The tar sands are one of the largest climate polluters in Canada.

BRADY: Mike Hudema of Greenpeace Canada is campaigning to keep this oil in the ground to address climate change.

HUDEMA: Canada needs to do its part. We need to be an active and progressive player. And what that means is that we need to stop the expansion of this project.

BRADY: Environmentalists celebrated last month, when President Obama rejected the Keystone XL pipeline, which would have transported oil sands crude to market. And they cheered again when Alberta Premier Rachel Notley pledged to limit carbon pollution from the oil sands industry.

(SOUNDBITE OF ARCHIVED RECORDING)

PREMIER RACHEL NOTLEY: Friends, the government of Alberta is going to stop being the problem. And we are going to start being the solution.

(APPLAUSE)

BRADY: Those new limits could make it difficult for companies to expand their oil sands operations as planned. But Shell has a potential solution.

(SOUNDBITE OF ARCHIVED RECORDING)

BEN VAN BEURDEN: Yay.

(APPLAUSE)

BRADY: Last month, Shell CEO Ben van Beurden officially opened what his company calls the Quest carbon capture and storage facility. Van Beurden says it will capture a third of the carbon pollution from an oil sands processing plant and store it deep underground.

(SOUNDBITE OF ARCHIVED RECORDING)

VAN BEURDEN: Canada and Shell have very good reason to feel some pride in Quest. And we invite the world to follow. Thank you very much.

(APPLAUSE)

BRADY: Capturing and storing carbon is expensive. Oil prices plummeted over the past year along with profits. Companies want to save money, not spent more. That leaves no easy answers to the environmental challenges facing Canada's oil sands business. Jeff Brady, NPR News.

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