Renee Schoof
October 12, 2008

FORT McMURRAY, Alberta — For decades, the U.S. has vowed to reduce its dependence on imported oil and to find a reliable source to meet the nation's growing oil needs.

Now, Canada offers a solution.

While oil supplies are dwindling in some places, or disrupted by hurricanes, threatened by terrorist attacks or controlled by hostile governments, Alberta's oil sands — a patch of forest about the size of Florida with a sea of oil beneath it — produce more crude than all the wells in Texas or Alaska.

With more than 170 billion barrels, the oil sands are the second-largest proven reserves in the world after Saudi Arabia.

Because of the Alberta oil sands, Canada has become the largest supplier of crude oil to the United States. The oil sands are booming, and production is expected to triple in a little more than a decade.

Also growing are the environmental costs — higher greenhouse gas emissions than conventional oil and long-term destruction of a swath of deep forest. In the past few months, Alberta officials have announced new environmental policies and plans to invest $3.7 billion to cut emissions. What's clear so far is that they're facing an environmental problem — supersized.

The Alberta government controls the rights to this oil and is in charge of environmental protection. This year, the western Canadian province of about 3.5 million has an estimated $7.9 billion surplus.

Demand for fuel in North America will keep oil sands production growing from 1.2 million barrels a day in 2007 to 3.5 million to 4 million barrels a day by 2020, said Alberta Oil Minister Mel Knight.

Oil companies are expanding so fast in Alberta that the three big players — Suncor Energy Inc., Syncrude Canada Ltd. and Albian Sands Energy Inc. — have built their own airstrips to ferry in temporary construction workers.

From a helicopter, the view of the area begins with a forest of spruce, pine, poplar and aspen spotted with ancient bogs under a summer cover of bright green algae. That landscape suddenly gives way to miles of black strip mines, brownish settling ponds with a rainbow sheen, and beyond the mines, well pads amid grids of roads and cuts from geological seismic surveys.

About 200 square miles have been mined, close to the Athabasca River.

But most of the thick crude oil lies farther from the river, too deep to be scraped off. Here the thick oil is heated by steam piped underground so that it can be pumped.

GREENHOUSE GASES

The sands contain a form of crude oil called bitumen that's as thick as peanut butter. To remove the sand and clay to turn the bitumen into heavy crude that can flow to refineries takes a lot of energy.

For that reason, greenhouse-gas emissions from production are three to five times those of conventional oil. Scientists have determined that heat-trapping gases from fossil fuel burning are largely responsible for the major climate changes of recent decades.

Alberta's environmental officials forecast that with the new policies in place, the province's emissions will increase until 2020 and then decline to 14 percent below 2005 levels by 2050. Global targets based on the 2007 findings of the Intergovernmental Panel on Climate Change are 50 percent to 85 percent reductions from 2000 levels.

Other environmental concerns are with the Athabasca River and the forest.

Preston McEachern of the province's oil sands environmental management division said oil sands production has not harmed the river.

But Canadian First Nations people living downstream of the oil sands report an unexplained cluster of rare cancers. This summer, a two-jawed fish washed ashore.

Canada needs the oil, but the people need clean water, said Patrick Mercredi, the medical director of Athabasca Tribal Council. He said people are worried about contaminants in fish and game.

David Schindler, an ecology professor at the University of Alberta, said that the woodland caribou would be extinct in this part of Alberta in 20 years, because when they're calving and rearing young, they're easily disturbed and avoid industrialized areas.

Schindler said other species also are losing habitat, including migratory songbirds such as warblers who nest here in summer.

Oil companies are required to restore the land. But oil sands operations use the land for many years, and restoration requires decades.

"If there was a Guinness Book of Records for unsustainable development, this is it," Schindler said.

Canada has been fighting back against the dirty oil image. Officials are particularly concerned about a sentence in the 2007 U.S. energy bill that said the federal government wouldn't buy unconventional fuel that produces more greenhouse gases than conventional oil. Some members of Congress have proposed repealing it.