Tailing ponds in the oil sands have been lethal to ducks that have landed in them. (image: ghostsintheeyes.typepad.com)

Oh, Canada. It’s time to clean up your act. Not only is our neighbor to the north the target of “mounting international pressure” to beef up its emissions-reduction record before Copenhagen, but it has recently come to light that seven of Alberta’s nine oil sands projects are falling short of their new cleanup rules. According to a New York Times Green Inc. blog post Thursday, vast amounts of tailing ponds near bitumen refineries are housing some seriously toxic chemicals.

The numbers are grim. If Canada continues its noncompliance, the Pembina Institute and Water Matters Society of Alberta estimate that the tailing ponds could contain 300 million gallons of toxic liquid by 2020. A 30 percent increase over current volumes, that prediction amounts to toxic sludge covering 100 square miles, roughly the size of Brooklyn!

After a 2008 controversy in which hundreds of ducks died after landing on the contaminated tailing ponds, Alberta’s Energy Resources Conservation Board announced new rules for cleanup. Their directive required producers to “capture 50 percent of fine particles by mid-2013.” However, slow technology development is blamed for the delays in cleanup.

Canada’s tar sands have been the subject of much controversy over the years. While the amount of oil located therein is huge, getting to it is costly and, as evidenced here, pretty terrible for the environment. And if, as HeatingOil.com reported recently, the oil sands’ output is due to double within ten years, the cleanup issue is one they’ll really want to get in check.

Interestingly, in the comments of Green Inc.’s blog post, David Sands, an official allegedly hired by the Canadian government, states; “The tailings production problem in oil sands development must be addressed as per the ERCB directive. Compliance is not optional.” There is some further discussion in the comments after that, where Mr. Sands indicates that a “new, more restrictive directive” will be enforced soon in response to the violations.

With the oil sands comprising much of Canada’s oil supply, it is unlikely that the present situation will halt production in any way. So we can only hope that the Canadian government can find a way to regulate effectively, and that the necessary technology to clean up these tailing ponds is found soon. As our Gregg Gethard pointed out in his recent piece, doubling the output of Canada’s oil sands would lead to lower prices for heating oil and other energy consumers.

ACT may have a new technology to extract more oil from Alberta’s challenging oil sands. (image: decideforyourself.wordpress.com)

On Nov. 12 American Clean Technologies (ACT) reported additional information about the pilot tests conducted by its American Petroleum Solutions (APS) subsidiary, including the fact that the oil extraction rate was more than 99 percent in tests conducted on oil sand samples from Utah and Alberta, Canada.

APS, which ACT acquired on Oct. 5, uses its patented fluidizer—which the company refers to as “a water-based technology”—to separate oil from any solid surface, including soil and sand. This fluidizer allows oil to be rejected by a solid surface, resulting in recoverable oil. While APS has used this technology for environmental remediation projects after oil spills, removing oil from contaminated soil or sand, the recent tests have shown its promise in extracting oil from the difficult-to-mine oil sands of Alberta.

The findings were reported in a company-issued press release, so the information has not been independently verified. However, this technology could significantly reduce the cost of producing oil from oil sands, making oil sands excavation and processing projects more attractive to investors, and laying the groundwork for a major increase in North American oil production.

According to the Alberta Energy website, Alberta ranks second after Saudi Arabia in proven crude oil reserves. The oil sands areas of Alberta contain an estimated 1.7 trillion barrels of crude bitumen trapped in a mixture of clay, sand, and water. About 10 percent (170.4 billion barrels) of this bitumen is recoverable using current technology. Depending on the bitumen content of the oil sands, potentially 90 percent to 100 percent of the bitumen could be recovered using ACT’s developing technology.

Gregg Gethard wrote on HeatingOil.com that Canada’s oil sands are more difficult and expensive to mine. Gethard cited an article on Bloomberg.com, which quoted the International Energy Agency’s World Energy Outlook as saying that “oil sands projects in Canada account for the bulk of the suspended oil [production] capacity” resulting from the global economic crisis.

Skiff loaded with armed Somali pirates. (image: scrapetv.com)

As reported by the Associated Press Monday, Somali pirates launched an ambitious attack on an oil tanker, 1,000 miles from shore. Two skiffs loaded with pirates armed with automatic weaponry and RPGs closed on a Hong Kong-flagged tanker in the Indian Ocean. The pirates fired on the tanker, which-as improbable as it seems for a ship the size of a small town-took evasive action and escaped.

This was hardly the first attack on an oil tanker. For example, early this year, pirates successfully ransomed a tanker, an event which focused world attention on the threat Somali pirates pose to trade. In contrast to pirates of old, who made their money primarily by stealing cargo, modern-day pirates often try to profit by holding vessels for ransom.

If pirate attacks on tankers become more common, they could have an impact on world oil prices. As our Gregg Gethard recently explained in the context of attacks on oil infrastructure by Nigerian rebels, military or paramilitary assaults on oil production and transportation raise prices two ways:

• The lesser impact comes from the actual disruption in the oil supply; lesser because the ability of any one rebel or pirate group to make substantial inroads on world oil supply is limited.

• The greater impact comes, as almost always, from psychology. The attacks cause investors and speculators to anticipate disruption of oil supplies. In response to that fear-or seeking to profit by it-they look to acquire or control more oil, bidding up prices and tightening supply more than the rebels or pirates themselves ever could.

The capture of a Saudi tanker in November 2008 was followed by a $1 rise in the price of crude, neatly illustrating the point.