by Robert Collier
24-03-05
While Congress debates whether to allow oil and gas drilling in Alaska's
Arctic National Wildlife Refuge, a similar battle with much higher stakes is
under way in northwest Canada. But the project has sparked opposition from some native tribal groups, which
call it a federal grab of their ancestral lands, and from environmentalists, who
say it would churn out greenhouse gases linked to global warming. It is a fight
that is likely to forever set the course for Canada's vast and empty north. The
project is full of continental superlatives -- North America's richest oil
patch, its biggest construction project since the Alaska pipeline in the 1970s,
its largest strip-mining operation. The Canadian government, which calls the project an economic necessity, is
not required to seek approval from Parliament in Ottawa. Pipeline construction
is expected to start in early 2007, with gas flowing two years later. Despite its bright prospects, Canada's pipeline could still be stopped in its
tracks by opposition from one of the region's native tribes, which are known in
Canada as First Nations. The Deh Cho First Nation, a tribe of about 4,200 people
who occupy the southern third of the pipeline route, has filed suit in federal
court in Vancouver, British Columbia, to block the project. The Deh Cho won a round, when a federal judge ordered the government to
release briefing notes, minutes, draft plans, correspondence and other documents
related to planning for the pipeline project. Contained in the oil sands are
vast quantities of so-called bitumen, or super-heavy oil, underneath an area of
northern Alberta as big as Florida. The crucial ingredient in this process is natural gas. Although other fuels
have been used to cook the oil sands, such as coal and the bitumen itself, none
works as well as gas. Production of gas from long-established fields in Alberta
is expected to decline in coming years, and because demand for gas is rising
fast, expansion of the oil sands will require new supplies. With international oil prices soaring over $ 50 per barrel and likely to
remain high for years to come, the oil sands are a bonanza in the making. The
oil sands are estimated to contain 174 bn barrels of oil, second only to Saudi
Arabia's 260 bn barrels. Companies such as ChevronTexaco, Shell, Exxon Mobil, Petro-Canada and Suncor
Energy have made multibillion-dollar investments in the oil sands in recent
years, raising total production to about 1 mm bpd. If sufficient natural gas is
available to cook the sludge, output from the oil sands is expected to reach 2
mm bpd by 2010, rising to 3 mm by 2020 and as much as 5 mm for many decades to
come. The oil sands expansion is expected to increase Canada's emissions of
greenhouse gases by as much as 12 % of the country's total allotment under the
Kyoto Protocol, making it almost impossible for the government to meet its
commitments for reducing emissions, Hazell said. The economic potential of the
pipeline project has been a powerful lure for many of the region's Natives.
Poverty is rampant in the ramshackle Native villages that dot the boreal forest.
Unemployment can be as high as 50 %. Three tribes in the Mackenzie Valley have allied themselves with the oil and
gas companies behind the pipeline project. The Sahtu Dene, Gwichin and
Inuvialuit, which settled their federal land claims in the 1990s, hold a
one-third stake in the pipeline project along with its corporate parents:
ExxonMobil, Shell and ConocoPhillips. "By destroying that one area in (the refuge), they will ultimately
destroy the caribou," said Joe Linklater, chief of the Gwichin First Nation
in Yukon Territory, who travelled to Washington earlier to lobby against the
Alaska refuge proposal. Many other twists and turns lie ahead amid the complicated energy politics of
the Far North. The Mackenzie project has caused consternation in Alaska because
it could delay construction of the planned $ 20 bn, 3,500-mile natural-gas
pipeline from Alaska's North Slope down into Canada. The existing trans-Alaska
pipeline carries oil only, and natural gas extracted in the North Slope as part
of the oil drilling process must be re-injected into the ground. Experts say
income from a natural-gas pipeline is needed to allow full expansion of oil
drilling in the Alaska refuge. Although US officials hope the output from Alberta's oil sands will be
exported mainly south of the border, Chinese officials are trying to lock up
long-term contracts for oil that would be sent through a proposed pipeline to
the coast at British Columbia and then exported via tanker to China.
Source: San Francisco ChronicleThe battle for Canada's underground resources
The $ 6 bn Mackenzie Pipeline project would open the Canadian Arctic for natural
gas drilling and send the gas 800 miles south down the Mackenzie River Valley to
Alberta. There, much of this fuel would be used to throttle up production in a
huge but hard-to-tap supply of petroleum dispersed in underground gravel
formations. These so-called oil sands hold petroleum reserves that are second in
size only to Saudi Arabia's, and analysts say they could supply a large portion
of US energy needs for decades to come.
"By far the most important thing for North America are those oil sands in
Canada," said Robert Esser, director of oil and gas resources at Cambridge
Energy Research Associates in New York. "It's nice we're going to have
access to (the Alaska refuge), but there are a lot of unknown questions there.
We have no idea whether there is oil or gas or how much. In the oil sands, we
know the reserves are huge, much larger than in Alaska."
In Alaska, by contrast, congressional authorization is required to develop the
wildlife refuge. The Senate vote to allow drillingwill be followed by several
more months of legislative manoeuvring and, if the plan is approved, about eight
years of preparation before oil begins to be pumped.
Unlike tribes of the northern Mackenzie Valley that have settled their land
disputes with the government and support the pipeline, the Deh Cho are holding
out for autonomous powers in their area. Until a deal is reached on the land
dispute, the government lacks legal authority for a pipeline right of way, the
tribe insists.
"What we see today is Canada not living up to its obligations," said
Noeline Villebrun, national chief of the Dene, the parent federation of
Mackenzie Valley tribes. "If Canada hopes to settle the claims, then the
Deh Cho have to see their rights being accommodated."
One extraction process is similar to strip mining, in which sand is scooped out
and cooked at high heat to extract the sludge. Another process pumps steam into
the underground deposits, dissolving the bitumen and allowing it to be piped to
the surface. Under both methods, the resulting goo is refined into commercial
grades of crude oil and piped to customers, mostly in the western United States.
About 2 tons of sand have to be dug up, heated and processed to make a single
42-gallon barrel of oil.
The nearest major source is in three well-explored yet untapped gas fields in
the delta of the Mackenzie River on the shore of the Arctic Ocean. If the
pipeline is built, gas from the delta can be funnelled down to Alberta, where it
will connect with the province's pipeline system to reach the oil sands.
In contrast, the Arctic National Wildlife Refuge contains only about 10 bn
barrels. The Energy Department predicts output there will reach a peak of about
1 mm bpd within a few years after the estimated 2015 start, and will decline
gradually thereafter.
"Imagine Saudi-type production levels just north of the US border in a
friendly country," said Roland George, an Alberta analyst with Purvin &
Gertz, an oil industry consulting firm in Houston. But environmentalists say the
process of burning large amounts of energy just to get more energy is reckless.
"The oil sands are the world's dirtiest source of oil," said Stephen
Hazell, director of the Sierra Club of Canada's campaign against the Mackenzie
pipeline.
"People need jobs, and although we're not sure the pipeline won't just hire
outsiders from down south, there are a lot of people here who are really
hopeful," Villebrun said.
Although it supports the Mackenzie pipeline, the Gwichin tribe, whose 7, 000
members live on both sides of the Alaska-Canada border, oppose oil development
in Alaska. Its leaders have long been active participants in US
environmentalists' lobbying campaigns in Washington against drilling in the
wildlife refuge because the area is the main summer calving ground of migrating
caribou herds that are a major source of the tribe's food supply.
Linklater said he and his family, who live in the village of Old Crow, north of
the Arctic Circle, hunt and kill several caribou each April and October during
the animals' migration through the area.
"That's what is in our freezer all year long -- the caribou -- and that's
what we eat," he said. But he noted that the Canadian pipeline lies outside
caribou migration areas.
The proposed Alaska pipeline route, which would parallel the Alaska- Canada
Highway into the Yukon and British Columbia, is further behind in the Canadian
regulatory process than its Mackenzie rival. Canadian officials are believed to
be deliberately taking a go-slow stance to ensure that their pipeline gets built
first.
"There have been Chinese delegations in every skyscraper in Calgary,"
said George, the analyst. "The Chinese are doing what the United States is
doing, scouring the planet for every molecule of oil production they can get
their hands on."
Many Washington conservatives are seeing red.
"It's definitely a big worry for the Chinese to be trying to monopolize the
oil sands," said Frank Gaffney, president of the Centre for Security Policy
in Washington. "We're in a race for energy supplies, and we can't allow
China to win this one."