Canada once had a vibrant manufacturing sector, growing economy and about 20 oil tankers per year passing through Burrard Inlet in B.C., mostly delivering refined products to coastal communities. Today, Canada has a declining manufacturing sector, growing unemployment, and over 70 crude oil tankers per year transiting Burrard Inlet. What happened?
The tar sands happened. Canada took the lure of globalization and raw resource export. Over a decade ago, the world’s largest oil companies decided to exploit the black bitumen tar buried under Alberta’s boreal forest, and to ship it from Canada with minimal local economic benefit.
Since then, the number of oil tankers has tripled and meanwhile, B.C. lost three of its four oil refineries. If American billionaire Richard Kinder gets his way, oil tanker traffic will increase to some 400 tankers per year through Burrard Inlet, more than one per day, shipping crude oil to refineries in the U.S. and China.
Canadian citizens are asking: What does this do for our economy and our ecological integrity?
Tankers and tar sands
Consider the ecological impact: The 700,000-barrel Aframax tankers now traversing Vancouver harbour and Georgia Strait carry the world’s dirtiest, most toxic, most carbon-intensive crude oil, heavy bitumen tar diluted with petroleum condensate. The diluted bitumen or “dilbit,” travels from the Alberta tar sands, through the Trans-Mountain pipeline, to Kinder Morgan’s Westridge Terminal in Burnaby.
To mine the tar sands, oil companies first remove the boreal forest “overburden.” Some 150,000 square-kilometers of forest are already gone. Each day, the tar sands miners draw over 300 million gallons of water from the Athabasca River and aquifers, and boil the water to blast bitumen from the sand. They return about 10 percent to the river. The rest is toxic sludge.
They send the black sludge waste into “tailings” lakes that cover more surface area than the combined cities of Vancouver Richmond, and Burnaby. In the last decade, the tar sands have produced over 8 billion tons of toxic waste. In 2008, 1,600 migrating ducks landed in the sludge pits, suffocated, and drowned. The oil companies want to quadruple this production and impact.
Tar sands bitumen is considered dirty because it is carbon-intensive to produce and toxic in the environment. Tar sands mining burns about a third of the energy it produces, seven-times the energy and carbon cost of a conventional oil well. The heavy bitumen is then diluted so it will flow through pipes.
The pipelines invariably rupture and spill. In the US, between 2010 and 2013, an average of 1.6 pipeline spills occurred every day. Dilbit contains sulphur, asphaltics and benzenes, a thick toxic tar that sinks in water and suffocates and poisons bottom-dwelling plants and animals. The lighter polycyclic aromatic hydrocarbons (PAHs) dissolve in the water and kill off the micro organisms at the foundation of the food chain. The dilutants — solvents such as condensate or naphtha — separate in the marine environment; volatile gases rise into the air, causing headaches nausea, lung disease and cancer.
The Indigenous populations in Alberta — Athabasca Chipewyan, Mikisow, Lubicon Cree, and other First Nations — have complained of these symptoms and deadly ailments. In February of 2009, the Alberta Cancer Board published “Cancer Incidence in Fort Chipewyan, Alberta 1995-2006,” showing deformed fish downstream from the tar sands, declining waterbird counts, and rising human cancer rates.
Finally, the oil that does not spill onto the land or water spills into our atmosphere when the bitumen oil and coke are burned. Besides releasing more carbon in the mining stage, the bitumen coke produces 4-5-times the carbon of conventional oil or coal when it is burned.
Meanwhile, the concentration of carbon-dioxide (CO2) in Earth’s atmosphere — which averaged about 230 parts-per-million (ppm) for the last 800,000 years — is now approaching 400ppm, already heating Earth’s atmosphere by about 1-degree-celsius. The tar sands contain enough carbon — 240 gigatons — to add another 120 ppm, melt Earth’s permafrost and poles, raise sea levels, and send Earth into runaway heating.
One may imagine that there exists some terrific economic benefit for us to so willingly destroy our forests, poison our air and water, poison our citizens, and bake the Earth.
Economy of the tar sands
Digging up a natural resource and selling it for cash might sound like a good idea, but it is never that simple.
The first financial blow to any resource colony arrives with the now-famous economic “Dutch disease,” named in the Netherlands during the North Sea oil boom. Dutch disease is simple: When a nation with a healthy manufacturing sector exploits a cheap resource for cash, its national currency rises in value. This increase in exchange-rates makes all of its exports more expensive to customers, who turn elsewhere. The former manufacturing sector erodes. The country loses jobs and economic stability, so when the resource boom is over, or when commodity prices drop, the nation is worse off, not better. That’s Dutch disease. And Canada has it bad.
The tar sands boom over the last decade pushed up the Canadian dollar value, and right on cue, Canadian manufacturing declined. Last year, the global trade watchdog, the Organization for Economic Co-operation and Development (OECD) warned that the tar sands boom and commodity price fluctuations has left Canada with a floundering economy. “The export-oriented manufacturing sector had by 2011 shrunk sharply,” the OECD reported.
The OECD encouraged Canada to restore its non-resource economy to maintain high employment and equitable wealth distribution. They noted that while Alberta was making money from the tar sands, the rest of Canada suffered from a hollowed-out manufacturing and export sector. Now however, since commodity prices have dropped, even Alberta is suffering the curse of Dutch disease.
In March this year, the Alberta government announced that it would cut spending and borrow billions to cope with declining revenues, due to falling crude oil prices, exactly as Dutch disease warns. Alberta — only a decade after former premier Ralph Klein paid off the province’s $23-billion debt — is in debt again and going deeper. Alberta expects to borrow $12.7-billion over the next three years.
In the same month that Alberta promised more debt, Canada lost 54,500 jobs, the biggest job decline in four years. Half those lost jobs disappeared from the manufacturing sector, once again, just as Dutch disease predicts.
Meanwhile, to ship oil to China and America, Canada risks oil spills that would cost billions of dollars to clean up, destroy the $14-billion annual west coast tourism industry, obliterate a healthy fishing industry, and shut down our ports. A single oil spill near Vancouver or Victoria harbours could cost this region $40 billion dollars.
Such a deal
So there you have it: Canada’s Conservative government — and B.C.’s Liberal government — appear willing to destroy Canada’s boreal forest, poison its water tables, pollute its rivers, kill its wildlife, cause cancer in the population, risk a devastating oil spill, destroy tourism and fishing, erode its manufacturing sector, lose jobs, and hollow out its economy in exchange for … what? Big profits for a few international oil companies and pipeline companies. What a great a deal.
Rex Weyler is a journalist, author and an activist with Tanker Free B.C.