NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Energy

Oil sands boom swamps the wilderness

By Tim Webb
Observer·
22 Jul, 2008 05:00 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

KEY POINTS:

Todd Dahlman scoops up a handful of oily sand and smiles. "This is the money - it even smells like money," says the manager of Shell's Muskeg River oil sands mine in the Athabasca region of North Alberta in Canada.

We are standing in the middle of a
pit 50m deep that giant diggers have hollowed out of the earth.

Some 150m beneath our feet lie almost a billion barrels of oil.

With Brent crude at more than US$130 ($170) a barrel, the oil sands frenzy is in full swing. Canada holds estimated reserves of 179 billion barrels of oil, the majority from oil sands, putting it second only to Saudi Arabia.

Canada's oil sands produce just over a million barrels a day but this is set to triple by 2020, making the country one of the largest producers in the world.

Shell, which operates the mine with Chevron and Marathon Oil, has 20 billion barrels of potential reserves in the sands, representing a third of its entire potential reserve base.

It produces about 150,000 barrels a day from its oil sands operations, around 5 per cent of total production, but plans to increase this figure fivefold.

For oil majors finding it difficult to locate new reserves, the attraction of Canada's oil sands is strong.

Resource nationalism, where countries bar foreign companies from their oil, is on the rise, as shown by BP's spat with its Russian partners over its joint venture TNK-BP.

The issue of reserves is particularly sensitive for Shell, which had to downgrade almost a quarter of its booked proven reserves four years ago, a scandal that led to the ousting of then chief executive Phil Watts.

But development is controversial. Untreated oil sands have the same consistency as peanut butter. Steam is pumped into the sludge to separate the oil from the sand and water. Huge upgraders are needed to treat the oil before it can be refined conventionally, and the process creates at least three times as many greenhouse gas emissions as conventional oil production.

The environmental organisation, the Pembina Institute, estimates that by 2030 the emissions produced by the industry in Canada could total more than a quarter of Britain's emissions. Production also devastates the boreal forests and wetlands which cover northern Alberta.

Increasingly, Shell - and other oil sands operators - are being targeted by environmentalists. The First Nations tribes - around 6000 native Indians live in the Athabasca region - are taking legal action against some companies. And the US is passing an environmental law which could restrict imports of the most polluting types of fossil fuels such as oil sands.

George Poitras is a former chief of the Mikisew Cree, the largest First Nation tribe in the Athabasca region.

Now he negotiates on their behalf when they lease land to oil companies. His office is in Fort McMurray, an hour and a half away by plane from Calgary, and the epicentre of the oil sands boom. With the highest GDP per capita in Canada, locals have dubbed their town "Fort McMoney".

Poitras says the development of the oil sands is poisoning the Athabasca River. The fish taste different since development began 40 years ago. "We think the water is giving us cancer."

The three deposits of oil sands in the province, of which the one in Athabasca is the largest, lie in 149,000sq km, covering a quarter of the province.

Not all of this will be extracted, and much will be extracted using "in-situ" methods where the material is pumped out of the ground, rather than mined, and so less forest has to be cleared. The industry says 420sq km of forest has been "disturbed" so far. Meanwhile, the Pembina Institute says 2000sq km of forest is likely to be affected.

Oil companies are required by law to "reclaim" the land after they cease operations there, and promise to plant native species of grass and trees and reintroduce wildlife.

Poitras is scathing. "Our elders laugh when the industry says this. Who do they think they are - God or the creator?"

Campaigners say environmental regulations covering the industry are inconsistent and ineffective. The Alberta government requires companies to reduce the greenhouse gas emissions' intensity per barrel produced by 12 per cent, but there are no limits on reducing overall emissions which will mushroom as operations expand.

The federal government has proposed tougher laws and higher levies for companies that miss their targets. It is not clear whether these will take precedence over Albertan regulations.

Shell has put forward proposals to equip the Scotford Upgrader - which treats the oil from the Muskeg River mine - with carbon capture and storage technology to reduce emissions.

Even if this happens, it would only cut emissions from the upgrader, when it is expanded, by a fifth.

BLACK SAND
* Oil sands are naturally occurring mixtures of sand, water and a dense form of petroleum.
* Untreated oil sands have the same consistency as peanut butter.
* Steam is pumped into the sludge to separate the oil from the sand and water.
* The treatment and refining process creates at least three times as many greenhouse gas emissions as conventional oil production.
* Oil sands are found in large quantities in Canada and Venezuela.
* They have only recently been considered to be part of the world's oil reserves.


- OBSERVER

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Energy

Energy

Auditor-General warns of investment need for electricity reliability

24 Jun 12:55 AM
Energy

Big four power firms near deal to secure Huntly's back-up role

18 Jun 10:57 PM
Premium
Energy

Why energy is set to be a hot topic in next year's election

15 Jun 02:00 AM

Kaibosh gets a clean-energy boost in the fight against food waste

sponsored
Advertisement
Advertise with NZME.

Latest from Energy

Auditor-General warns of investment need for electricity reliability

Auditor-General warns of investment need for electricity reliability

24 Jun 12:55 AM

Achieving net zero by 2050 will require increased spending in the electricity sector.

Big four power firms near deal to secure Huntly's back-up role

Big four power firms near deal to secure Huntly's back-up role

18 Jun 10:57 PM
Premium
Why energy is set to be a hot topic in next year's election

Why energy is set to be a hot topic in next year's election

15 Jun 02:00 AM
Premium
Israel-Iran attack: AA says petrol price panic pointless

Israel-Iran attack: AA says petrol price panic pointless

13 Jun 04:46 AM
Engage and explore one of the most remote places on Earth in comfort and style
sponsored

Engage and explore one of the most remote places on Earth in comfort and style

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP