Thanksgiving in Canada is a great time to reflect on those things which make our lives richer: family, friends, snow tires and the return of hockey season. While Canada’s oil sands probably don’t make too many top-ten lists, we think perhaps they should.
In the spirit of Thanksgiving, we present four reasons to be thankful for the oil sands.
1. We need the energy
The International Energy Agency expects global demand for energy to increase one-third by 2035. All sources of energy, including that from Canada’s oil sands, will be needed to meet growth in global demand.
Canada has 173 billion barrels of oil that can be recovered economically with today’s methods. Of Canada’s 173 billion barrels of oil, 167 billion barrels are located in the oil sands, according the Alberta Energy Regulator. Oil sands already figures prominently in North America’s energy supply. According to the Canadian Petroleum Producers Association (CAPP), more than half of Canada’s crude oil production was from the oil sands in 2013.
Crude oil derived from the oil sands is refined into products, such as gasoline, diesel, and aviation fuel, which keep us warm, power our industries, and help us move about the country and the world (not to mention cooking those turkeys).
With conventional oil supply declining, the need for oil sands is increasing. CAPP forecasts Canadian oil production to reach 6.4 million barrels per day (bpd) by 2030, including 4.8 million bpd from the oil sands.
2. Oil sands sets us up for an energy system transition
With the challenge of global climate change looming large, there’s no doubt we need to change our energy system so it relies less on hydrocarbons and more on cleaner energy sources, such as renewables.
What do the oil sands have to do with this? In addition to developing oil sands and other hydrocarbon sources, many oil sands companies also have what it takes to develop renewable energy. In fact, major oil sands players such as Suncor, Shell and Total are already producing energy from renewables.
As the Pembina Institute notes in this blog, energy market insight, technology know-how, project management, balance sheet management and community engagement expertise are key oil and gas sector strengths which are transferable to renewable energy development.
Industry players are honing these competencies as they develop the oil sands: competencies which should serve industry and society well, as the focus of future energy development shifts from hydrocarbons to cleaner energy sources.
3. Oil sands development is good for Canada’s economy
Nearly everything we’re thankful for somehow depends on the health of Canada’s economy. From the jobs we depend on to the roads that get us to our families during the holidays, oil sands development is a major part of Canada’s economic well-being.
The Canadian Energy Research Institute (CERI) expects new oil sands development to contribute more than $3.8 trillion to the Canadian economy over the next 25 years (or about $155 billion per year). CERI forecasts the oil industry will pay about $1.5 trillion in provincial ($302 billion) and federal ($574 billion) taxes and provincial royalties ($590 billion) over the next 25 years.
Direct employment in Canada resulting from new oil sands investment is expected to grow from 149,000 jobs in 2014 to 225,000 jobs in 2038. And then there are the indirect employment benefits. The goods, materials and services needed for oil sands operations are sourced broadly. For example, tires, trucks, gauges, valves, pumps and other components used in the oil sands are made in Central and Eastern Canada. CAPP notes that in 2013, more than 2000 companies from across Canada had direct business with oil sands operations.
4. Communities benefit from oil sands development
Oil sands operators give back to the communities in which they work by providing support to local charitable and community-based organizations. This includes Fort McMurray and Aboriginal communities in the oil sands region.
One way Suncor is contributing to the Regional Municipality of Wood Buffalo is through its support for Social Prosperity Wood Buffalo (SPWB). A five-year partnership between stakeholders in the region, the Suncor Energy Foundation, the Region of Waterloo in Ontario and the University of Waterloo, SPWB aims to improve the quality of life in Wood Buffalo by strengthening its non-profit sector.
Aboriginal communities in the oil sands region are also benefitting. In 2011 and 2012, for example, oil sands companies contributed more than $20 million to Aboriginal communities in the Wood Buffalo and Lac La Biche regions for school and youth programs, celebrations, cultural events, literacy projects and other programs, according to the Oil Sands Developers Group (whose work is now part of the Oil Sands Community Alliance).
So when you’ve polished off that last slice of pumpkin pie, put on your stretchy pants, hit the couch and consider how the oil sands may have contributed to what you’re thankful for this year.
We’re taking a break
OSQAR will be taking a break for the Thanksgiving holiday. Watch for our next edition the week of October 20.
