When nature gives you tar sands, make carbon fibres

Oil sands crude prices have hit rock bottom. The future could be in the tar -the bitumen. The original name for the deposits, tar sands, should be restored because that’s where their potential value exists.

Image: Mining.com

Extracting oil from tar sands is done at great cost. Huge tracts of land are stripped and the tar sands are dug up or injecting with steam. Once it’s dug up, the thick goo has to be diluted just to get it through pipelines. To turn into useable petroleum, it has to be sent to refineries thousands of kilometres away. Because there aren’t enough pipelines to get it to refineries, and because convention oil is relatively cheap, the extraction of oil from tar sands is not profitable.

Beyond the cost of extracting oil from tar sands, there is the cost to the environment. Because extraction is so energy intensive, more greenhouse gases are produced than from conventional sources. Canada is the fifth largest producer of crude oil in the world but we produce 70 per cent more greenhouse gases per barrel than global averages according to Corporate Knight magazine (Fall, 2018). That higher average is because of the tar sands.

Then there are investment pressures that are moving away from fossil fuels. Europe’s largest asset manager is increasing its “decarbonized portfolios” and so is Canada’s second largest pension fund, Caisse of Québec.

Instead of burning the stuff as fuel, a better plan would be to extract the valuable byproducts of bitumen. An Alberta government agency, Alberta Innovates, is looking to producing derivatives of tar. In their report “Bitumen Beyond Combustion,” they suggest three possibilities.

The most obvious is asphalt for roads. The global market for asphalt is currently at $65 billion and is expected to grow. The tar sands now produce asphalt but the current method of transportation requires that the product be kept very hot for transport. A better way of moving asphalt to market is to turn it into pellets and ship it to markets. An engineer for Stantec engineering who worked on the report says:

“The infrastructure, the rail cars, are out there, the global pull, the pricing mechanisms – people are building roads all over the world everyday.”

Less obvious is the production of carbon fibres. Like any organic compound, bitumen is right for making carbon fibres. The fibres have a wide variety of applications including strong lightweight composite materials used in aircraft, aerospace, and wind industries. They strengthen cement and steel.

When used on their own, they can replace steel in automotive manufacture. If carbon fibres took just one per cent of the global steel market by 2030, that would require 3 million barrels of bitumen a day, one study found.

Another surprising component of tar sands is vanadium used in making batteries and high temperature metals. While one a barrel of bitumen contains only 30 millilitres of vanadium, millions of barrels would produce a lot of the metal.

At the current value of crude oil, it’s not worth mining the tar sands for petroleum. The bitumen, once regarded as a troublesome byproduct, may be the future of the tar sands.

 

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Empty pipelines spill no oil

The Kinder Morgan pipeline should be built for the same reason as the pyramids –as a national monument.

The pyramids employed workers but served no practical purpose other than an grand burial site for the pharaohs. The humble graves of the workers would have served the pharaohs just as well.

   Composite: David Charbonneau

Construction of the People’s pipeline will employ well-paid union workers. It’s supposed to carry crude oil to Asia but that market doesn’t exist. Therefore, it will serve as a wonderful monument to the “National Interest.”

The pipeline should be built because it serves political interests. Premier Notley’s hopes to be re-elected depend on completion of the pipeline. In her letter to Maclean’s, she said:

“And together, we are building this pipeline — with B.C. workers, using steel made in Saskatchewan, from ore mined in Quebec. Now, it’s time to pick those tools back up, folks. We’ve got a pipeline to build.”

While I’m less optimistic about the future of fossil fuels than Notley, I would rather see her re-elected than Jason Kenney, leader of United Conservative party of Alberta. A progressive premier with delusions about the future of oil sands is better than a retrograde one with similar delusions.

The People’s pipeline will bring the feuding NDP family members back into the fold where they can return to civility. This spat has been an embarrassment for the NDP for the new leader Jagmeet Singh.  Until recently, the NDP was one big happy family; unlike other parties, there is only one party provincially and federally.

The pipeline should be built to strengthen our federation. Prime Minister Trudeau is correct in asserting the nation’s right to move goods to market over the objections of provinces. One province should not have the ability to stop the national transport of commodities.

While the symbolism of the pipeline is strong, the financial rationale for the pipeline hinges on flawed logic. Finance Minister Morneau claims the pipeline is required to get oil to “tidewater” so it can be sold at higher prices than in the U.S.  Economist Robyn Allan is not so sure:

“The facts don’t support the argument. The economics aren’t there. This project is financially compromised and not commercially viable (Globe and Mail, June 2, 2018).”

The fantasy is that Asia will pay more for the goop than it could be sold for in North America. However, in recent years, heavy crude has consistently sold for significantly less in Asia than the U.S.  Refineries in Texas, Louisiana and Mississippi are ready; they have been re-engineered to process the heavy crude of the oil sands.

Just one per cent of the oil in the existing pipeline flows to Asia. Another pipeline won’t change that fraction. Most oil goes to California and Washington State where it is refined and sold back to Canada as expensive automotive fuel.

The financial reality is that TransCanada’s Keystone XL pipeline to the U.S. is a better bet in getting crude oil to market. The off again/on again pipeline is breathing new life under the Trump administration.

The pipeline should be built and remain empty. Everyone will be happy, workers and environmentalists alike.

Mid-Canada beckons

Between Canada’s border-hugging south and our great white north runs a ribbon of undeveloped territory indicated on this map in green. This undulating swath of land contains the riches of our nation; everything from cobalt and copper in Labrador, gold and hydro in Quebec, chromite and copper in Ontario, potash in Saskatchewan, oil and gas in Alberta and B.C.

It makes great sense to develop this mid-Canada corridor in an orderly fashion. Also, we need to prepare land and infrastructure for the influx of climate change migrants that will flock to Canada. A hodge-podge of development is now the norm says John Vahan Nostrand in Walrus magazine.

“As an architect and planner with special interest in mining regions and towns, I’ve seen the damage first-hand.” The standard approach to resource extraction is to build a temporary settlement, extract the resource and move on.

Majority world countries are more susceptible. Labour is cheap and environmental standards lax. However, Canada is not immune to the damage of resource extraction; even more vulnerable after the Harper government weakened environmental laws with the passage of bills C-38 and C-45. Now only one per cent of our waterways are protected.

“The Conservative agenda,” says NDP Megan Leslie, “systematically dismantles any environmental legislation that might restrict unbridled expansion of their resource exploitation agenda.”

The explosion of Fort McMurray is an example of what unregulated development looks like. While 73,000 live in Fort McMurray, almost that many live in surrounding camps.

“At current rates of production,” warns Van Nostrand of oil sands extraction, “the timeline for its full exploitation is estimated at more than 200 years, and yet existing First Nations, Métis, and non-Aboriginal communities are being built up on haphazard, short term basis.”

Communities don’t benefit from the resulting chaos. Workers in the camps spend sizable paycheques in other cities, provinces, and countries. The workforce is primarily male and the businesses that spring up are hardly family oriented: drugs, prostitution, and strip clubs.

The money used to set up these temporary, malfunctioning, camps could be used to build permanent towns and cities. The cost of a temporary camp for 1,200 workers is $50 million. A rational approach would be to set up permanent family-friendly communities with economies that actually work; where wages are spent locally and the social costs are reduced.

Developing our middle corridor will require some changes in governance as well. As things now stand, municipal regions pay for the costs of runaway expansion while reaping little of the rewards.

Melissa Blake, the mayor of the municipal region containing Fort McMurray, complains that the city pays for infrastructure while provincial laws prevent taxation that would cover the costs. Oil companies get a break on taxes as well, paying only 75 pre cent of what other businesses pay.

Plans for a rational development of the corridor have been in place for decades but have fallen on deaf ears. Recently, Van Nostrand’s firm prepared a plan for the Alberta government that would see a new town north of Fort McMurray with commuter hubs radiated from it.

Mid-Canada settlement corridor can take place with sustainable communities or continue in the current chaotic manner. It’s time we had that conversation with near-sighted and deaf politicians.