Oil sands debate

In our navel-gazing world, it is easy for the Canadian mining press to forget how small the mining world is. That is abruptly brought into perspective when we cover the oil sands business, as in this issue. The combined metals, coal and industrial minerals businesses in this country are dwarfed by that tarry patch of sand in northern Alberta in any terms: investments, labour, value, reserves, shortages and sheer busyness.

As an example, Finning delivered its 100th Caterpillar 797 haul truck to Alberta’s oil sands in mid-March, this one going to the Muskeg River mine, bringing its complement of 797s to 25. Those 100 have been delivered since 1999, giving Fort McMurray the largest population of 797 trucks in the world. Each one has a nominal capacity of 345 tonnes, the world’s largest haul truck model. You can be sure that both Finning and Caterpillar have the welfare of the oil sands industry close to their heart.

Alongside the feverish activity at Fort McMurray, there is a raging debate about whether, when and how Alberta should develop its vast bitumen-laden oil sands–a unique resource in the world–and what benefits it should exact from the companies that are profiting from them.

Addressing that controversy is the object of the Oil Sands Consultation, initiated by the government of Alberta last spring, following its acceptance of a final report from the “Consultation Advisory Group”, which apparently was not considered to be “consultative” or “final” enough.

Albertans have had a lot to say to the multi-stakeholder committee. The 10 days of public meetings in seven locations elicited 298 submissions, not surprisingly expressing many divergent opinions.

With so much potential wealth and employment firmly situated in the area, what possible objections could there be?

Well, protection of the environment for one, and the large amount of water needed for the extraction and processing, in an area short on water resources. Then there’s the trend of current extraction techniques to release more and more greenhouse gases into the air, as deeper resources are being chased. There’s the question of why the provincial revenues from oil sands are actually decreasing despite the large increase in oil sands production. Of course, you’ve heard of the problem with lack of housing, transportation, and medical and other facilities in northern Alberta; who’s going to provide and pay for infrastructure to handle the inescapable influx of workers and their families? To what extent are the Aboriginal people in the area, who have land claims issues, going to benefit in the long run? Is Alberta getting the most bang for its oil sands buck?

The interim report of the new group, published in November 2006, came up with 12 principles to guide oil sands development, available at www.oilsandsconsultations.gov.ab.ca. The second phase of the process, expected in June 2007, will provide strategies and action plans.

It will be fascinating to see how the committee navigates these controversial waters. It needs to come up with unique solutions for this one-of-a-kind resource, and soon.