The Difference between Extreme and Efficient

There was a time in this country when the only way to access oil was to commission a boat, take it offshore, locate, engage and coax onto your ship a 175,000-pound whale, bring it back without sinking, and then, once cleaned, extract the relatively small deposits of oil from the animal’s carcass.

You want to talk about “extreme” oil? Ladies and gentlemen: that’s extreme. Thankfully, today, advancements in technology and a commitment to continuous innovation and improvement make the development of oil and natural gas a much easier (and safer) enterprise -- and more efficient too. According to the Energy Information Administration, the United States drilled nearly 4,000 more oil and natural gas wells in 1950 than it did in 2010 – and yet, in 2010, the country actually produced 27 million more barrels of oil. More energy from fewer wells, with less disturbance to land and the environment. If that’s your definition of “extreme” energy, shouldn’t everyone be extremely supportive of it?

Unfortunately, that’s not exactly the position that TIME Magazine takes in its cover story for the April 9 edition, titled “The Truth about Oil.” To hear the reporter tell it, producers should be recognized for engineering the solutions that allow for greater access to larger reserves of energy today – and then indicted for it: since much of the energy rendered available due to that engineering is, in his view, “expensive, dirty and dangerous.”

Cited as an example of this “extreme” energy, TIME focuses in particular on the development of the oil sands in Canada, deploying misleading (and inaccurate) statistics related to emissions and land-impact issues (we correct those below), and then suggesting through implication that oil sands development is new – new, and impossible to make viable absent the “extreme” methods being used to harvest it.

But the truth is: Oil sands exploration isn’t new at all; commercial development has taken place since the mid-1960s (and according to this federal report, research and planning activities began generations before that).

Indeed, the only thing extreme about the resource is its size. Consider: If Alberta were a country, its 170 billion barrels of oil-sands derived oil would rank it third in the world behind Saudi Arabia and Venezuela. And the only thing unconventional is the extraordinary efficiency by which these resources are produced today: with less water, less waste, a smaller footprint, and greater economies of scale. That’s not extreme energy. It’s efficient energy. All made possible by a process that gets even more efficient by the day.

Below, as promised, we take a closer look at several of the assertions found in the TIME piece, and do our best to provide some much needed context and perspective:

TIME: “The new supplies are for the most part more expensive than traditional oil from places like the Middle East, sometimes significantly so.”

As of April 4, the spot price for Western Canada select crude oil was $76/bbl as compared to the $124/bbl Arabian Gulf Arab Light crude oil – a nearly $50/bbl difference in price.Canadian oil resources are helping to reduce the price of oil for U.S. refiners, which in turn, helps stabilize and lower U.S. gasoline prices. According to Stephen Kelly, associate director of Canadian studies at Duke University: “Rocky Mountain refiners paid, on average, $91.54 a barrel for their local and Canadian oil in November. On the East Coast, which receives far less Canadian crude, they paid $111.98, which is 22 per cent more. The difference is quickly felt at the pump.”

TIME: “Producing oil from the sands in northern Alberta can be destructive to the local environment, requiring massive open-pit mines that strip forests and take years to recover from.”

The vast majority of bitumen from the oil sands region is harvested without the use of pits, ponds or mining of any sort – via a process known as “in situ.” According to MIT: “For in-situ methods, most of the bitumen is separated from the oil sands underground by thermal means. The bitumen is then pumped to the surface for further processing. Approximately 80 percent of the deposits in Canada … can only be recovered by in-situ methods.” And not only are surface disturbances being reduced, carbon emissions are as well. According to the U.S. State Department, oil sands development projects “have reduced greenhouse gas emissions intensity by an average of 39 percent between 1990 and 2008 and are working toward further reductions.” (State Dept, final EIS for KXL, Aug. 2011)As for the land-use argument, left unmentioned in TIME is that boreal forests of Canada span almost 60 percent of the land mass of the entire country – but only 0.02 percent of that acreage has been affected in any way by oil sands development. Far from destroyed, the land used for oil sands operations must be reclaimed by law.

TIME: “The tailings from those mines are toxic.”

According to the Government of Alberta, tailings are made up of natural materials including water, fine silts, bitumen remnants, salts and soluble organic compounds. They also include solvents that are added to bitumen during the separation process. As mentioned above, less than 20 percent of oil sands development involves the use of surface impoundments.More from Alberta government: “Comprehensive monitoring programs have not detected impacts from tailings ponds on surface water or potable groundwater."

TIME: “As a result, a barrel of oil-sand crude usually has a 10 percent to 15 percent larger carbon footprint than conventional crude over its lifetime, from the well to the wheels of a car.”

The well-to-wheels, or life-cycle analysis, of a fuel typically measures carbon emissions from the beginning of oil production to combustion. According to IHS CERA data, the average oil sands import to the United States is only 6 percent more intensive than U.S. crude supply and is comparable to that of oil. Indeed, according to that same study, 80 percent of emissions come from the combustion of the fuel in a car’s engine – not the production, refining and delivery of the fuel.IHS CERA: “Over the past five years the GHG intensity of U.S. oil sands imports has been steady, and over the next two decades the average is projected to remain steady or decrease slightly.”Carbon emissions as a result of oil sands development account for only 0.1 percent of global greenhouse gas emissions (GHGs). According to Environment Canada: “[T]he oil sands industry has been reducing its per-unit emissions, and in 2009 intensity was actually 29 percent lower than in 1990. This reduction in intensity is positive as larger and larger portions of production are derived from oil sands.”

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