High Gas Prices in the U.S. Are Increasing Demand for Dirty Gasoline from Canada's Oil Sands

An oil sands mine in Fort McMurray, Alberta, where some of Canada’s dirtiest crude oil comes from.

An oil sands mine in Fort McMurray, Alberta, where some of Canada’s dirtiest crude oil comes from.Photo: Mark Ralston (Getty Images)

Canada’s oil sands are going through an unexpected boom period, spurred on by the recent surge of oil prices around the globe. Now that the U.S. is struggling to curb the prices of gasoline, oil producers in Alberta, Canada are looking forward to renewed demand for bitumen extracted from the oil sands. But the main hurdle toward this economic revival is the same as it’s always been: Canadian oil sands produce some of the world’s dirtiest fuel.

And yet, according to the Financial Times, the scramble for stable sources of foreign oil — in the wake of Russia’s invasion of Ukraine — has made the Canadian oil sands more appealing to the U.S. and others.

Both oil production and export capacity are higher than they’ve been in years due to the price of oil surging past $100 per barrel. Workers tell the FT the price has turned back the clock to pre-pandemic times, back before the viability of the oil sands plummeted:

“Everything’s just totally switched,” says Tim Valleau, owner of 1441 Energy Services, an oilfield maintenance company in Wainwright, a town close to the Saskatchewan border. When the pandemic hit in 2020, he dismissed the 11 men who worked for him. Now he is struggling to find enough workers. “Folks are punching wells all overthe place. It’s right back to where it was in 2014 — and in 2014 it was nuts,” he says, referring to the last time oil topped $100 a barrel, before prices crashed.

Just before 2014, the oil sands were bringing in around $30 billion Canadian dollars (over $23.4 billion USD based on current exchange rates). By 2021, that amount decreased to about $9 billion (or about $7 billion).

The pandemic more or less pushed the demise of the oil sands projects along, but the cancellation of the Keystone XL pipeline, and stricter regulations set by the Canadian government all contributed. Again, this was due to the oil sands carbon emissions, which even today are around 88 million tons — more than the annual emissions of some countries in the EU, like Austria.

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Image for article titled High Gas Prices in the U.S. Are Increasing Demand for Dirty Gasoline from Canada's Oil Sands

Photo: Veronqiue de Viguerie (Getty Images)

Every barrel of oil from Christina Lake, one of the oil sands’ most efficient projects, requires two barrels of steam to produce. And that steam comes from burning natural gas, which emits a lot of CO2.

Oil producers say they will lower emissions using carbon capture facilities along the three major sources of CO2 emissions: the initial production, the process of turning heavy sludge into synthetic crude oil and the refinement of crude into fuel. Once captured, the carbon will be stored under Cold Lake in Alberta.

Under this plan, oil sands producers say they can cut 24.2 million tons of annual carbon emissions by the year 2030. The oil producers also say their operations will be carbon neutral by 2050. But that’s a long time away, and it threatens the government’s plan to reach its climate goals by cutting 42 percent of total Canadian emissions by 2030.