According to the Canadian Association of Petroleum Producers (CAPP), 79 per cent of the world’s oil reserves are controlled by national governments. Out of the 21 per cent left accessible to private industry, more than half is located in Alberta’s oil sands.
Prime Minister Stephen Harper and his administration insist that exploiting the oil sands is necessary and beneficial to our country’s long-term economic health. But for the average Canadian, it can be tough to see exactly where these benefits lie.
So which are the corporations, businesses and individuals with big stakes, who stand to gain from tar sands operations? And how much are they worth?
Part one of this series focused on the top oil extractors in Fort McMurray, and part two looked at companies transporting the product through major pipeline systems. Now, we take a look at some of the companies with high stakes in other areas.
Oil upgraders and refineries
While there is some conventional oil extracted from the tar sands, the region’s primary oil product is bitumen. Bitumen is a heavy, viscous type of oil that must be treated before it can be turned into usable fuels like gasoline and diesel.
Before even reaching the refinery, the bitumen goes through an upgrading process that adds hydrogen to the carbon substance and removes contaminants like sulfur and nitrogen. Then, once the product has been upgraded (and diluted), it can be transported via pipelines to refineries across North America.
The most prominent energy companies working on extraction in Alberta also operate upgrade and refining facilities. According to the Alberta Energy website, there are currently five upgraders in the province, operated by major producers like Suncor, Syncrude and Canadian Natural Resources Ltd.
Suncor, one of the oldest and most profitable tar sands extractors, also operates refineries in four different locations, processing oil sands crude into refined products to serve markets around North America. Its major refinery in Edmonton, Alta., runs entirely on oil sands crude, and it has other refineries in Quebec, Ontario and Colorado. In fact, the Colorado Suncor plant recently came under fire for a spill leaking petroleum products into creeks near the South Platte River.
Imperial Oil operates another refinery in Strathcona, Alberta – though it is run on conventional oil rather than oil sands crude.
The third major refinery in Alberta is operated by Shell Canada, and according to its website, it was the first to exclusively process synthetic crude from oil sands products.
A large proportion of upgraded tar sands product also ends up in the United States, where other oil and gas companies operate their own refineries. Many of these are located at key points connected by the major pipeline systems, in places like Illinois, Montana, Ohio and Utah.
Major U.S. refineries fed by the tar sands are operated by international oil giants, such as ConocoPhillips, ExxonMobil, BP and Marathon Petroleum.
Within refinery operations, jobs range from engineering, maintenance and trades to safety and even food service. Most of the major refineries in Canada employ between 400 and 1,000 employees.
Other industries
Apart from the refineries, there are several other industries that are connected in some way to mining in the tar sands. Many – but not all – of these businesses operate in Alberta, alongside extraction operations.
For instance, water treatment systems are essential in the Fort McMurray region, to protect communities and wildlife from harmful toxins associated with mining, and to provide tar sands workers with potable water. As a result, companies specializing in this type of process can score lucrative contracts with oil sands developers.
One example is H20 Innovation Inc., a Quebec-based company awarded a $9.4 million contract with a project operated by Suncor Energy. The company was hired to build, install and commission a water treatment package specifically to provide water for workers on the project. Multiply that single contract by the number of projects operating in the tar sands, and you’ve got a lot of potential for business.
There are also a variety of major construction projects that revolve around tar sands production, including roads to allow transportation within extraction areas, and even housing for the influx of temporary workers who come to Fort McMurray.
Of the vast amount of workers employed indirectly in tar sands operations, some are geologists, environmental and safety consultants, machinery maintenance workers and market traders. And don’t forget the damage control – potential oil sands hazards require specialized workers in areas like firefighting and spill cleanup.
The Alberta government has published a step-by-step guide to the industrial process around the oil sands, which provides a bit of an outline to understanding what types of direct and indirect businesses are involved.
According to the Canadian Association of Petroleum Producers (CAPP), the oil sands industry provides work for over 239,000 people in Alberta alone. If you include all the other related machinery, goods and services needed for production in Alberta – a good deal of which is manufactured in Eastern Canada – the CAPP says the oil sands also affect the livelihoods of 112,000 workers across the country. If the industry grows as planned (including disputed pipeline proposals and expansions), they claim it will provide another 500,000 jobs over the next 25 years.
To read part one of this series and find out who’s who in tar sands extraction, click here.
For part two, focusing on pipelines and oil transport systems, click here.