[R-G] Canadian Crude: Impact Felt 1,200 Miles Away

[Macdonald Stainsby]

Canadian Crude: Impact Felt 1,200 Miles Away

Canada produces two and a half million barrels of oil a day and 
production is expected to double over the next decade. So, energy 
companies are looking for ways to get a newly developed oil from Canada 
to refineries in North America. One option is TransCanada's proposed 
Keystone Pipeline that would run through South Dakota and it all would 
start in Fort McMurray, Alberta.

It's about as far north as any paved road in Alberta goes. Fort McMurray 
sits in the Athabasca River valley 275 miles north of Edmonton.

But one look at downtown and you can tell, Fort McMurray is quickly 
growing from a remote town into a booming city.

Fort McMurray Realtor Jeanette Sibley says, "The oil sands actually put 
Fort McMurray on the map."

Fort Mac, as many Canadians call it, is all about oil. Seventeen 
companies that mine the oil sands in and around the city have brought in 
thousands of workers who now call it home.

Athabasca Regional Issues Working Group Executive Director Jacob Irving 
says, "This community's population has actually doubled in the last ten 
years."

Doubled to 70 thousand people. Realtor Jeanette Sibley has seen that 
growth first hand.

Sibley says, "When I arrived in 1987 myself and my family we purchased a 
home up here for $92,000. That same home to go on the market today in my 
opinion would probably list between 560 and $600, 000. That's more than 
triple."

Demand for housing is so high that most homes have a starting price of a 
half million dollars.

Irving says, "People need affordable places to live in order to come and 
work, and this is something where we need to catch up both in Fort 
McMurray and I would say throughout all of Alberta."

Sibley says, "I feel that the oil sands with the companies that has 
sprouted up in the past few years have made a big impact on Fort McMurray."

And that impact just keeps getting bigger as the development of oil 
sands grows.

Vice President of the Canadian Association of Petroleum Producers Greg 
Stringham says, "About the early to mid-90's and that's really where 
when the reserves started being exploited and now we're up to one 
million barrels a day being produced out of it."

The oil in this part of Canada is actually part of the dirt. It's dug 
out of the ground and then separated from the sand in a refinery. But 
getting oil out of sand is more expensive than just pumping it out of 
the earth.

Stringham says, "Today, it's probably 50 to 60 dollars a barrel to get 
it out of the ground and get it upgraded to light oil, so it's very 
costly."

The oil sands have always been in northern Alberta, development actually 
started in the 1960's but it wasn't until the past few years when the 
technology improved and the price of oil rose and that's when the oil 
boom started.

Now hovering around 90 and even 100 dollars a barrel, this northern 
Canadian oil has become a profitable product. And it's being developed 
at a rate that will make Canada the fourth leading oil producer in the 
world by 2015.

Brenda Kenny of the Canadian Energy Pipeline Association says, "We're 
looking at numbers up to about 5 million barrels a day and a lot of that 
will be U-S destinations."

Experts say Fort McMurray's oil sands have 174 billion barrels of 
potential oil, enough to rank Canada just behind Saudia Arabia for 
having the second largest oil reserves in the world.

Stringham says, "That's over 400 years worth of reserves in the oil sands."

But that means nothing without a means to get the oil to market. And 
that's why Canadian experts say projects like TransCanada's Keystone 
Pipeline are needed.

Kenny says, "There's an absolute one-for-one link because you have to be 
able to get the oil into markets where people can use in refineries to 
make gasoline or other purposes."

Stringham says, "Right now I probably think there's 17 proposals for new 
pipelines to try and meet this growing supply push that's coming from 
the oil sands."

With several pipeline projects being developed, South Dakota is just one 
of many states that sits in the path of an oil boom happening more than 
12 hundred miles away.

Irving says, "More companies are coming all the time, more leases are 
being purchased and plans are being announced."

And that's why South Dakota may soon feel the impact from Fort Mac.

The impact of the oil development and growth around Fort McMurray may 
have an even bigger impact on South Dakota in the next decade than just 
the TransCanada pipeline.

Hyperion Energy's proposed project near Elk Point is also planning on 
using the oil from Alberta's oil sands in it's refinery.
-- 
Macdonald Stainsby
Coordinator, http://oilsandstruth.org
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