Thank you, Mr. Chairman.
First of all, I have to apologize for the quality of my voice. I am struggling with a cold virus that I can't get rid of. No, I'm not spreading it, and it is not the swine flu. Don't go back to Ottawa and say I did it.
With your permission, Mr. Chair, I have a presentation here, but I'll skim through it to allow more time for questions. It shouldn't take more than five minutes. I will be discussing challenges to the oil sands development.
Page 2 of the presentation talks about why the oil sands are very important for the economy of Alberta and Canada. It is very important for the citizens economically, and also for the prosperity of future generations. You must have heard a lot about that in the last little while, so I'm not going to repeat it. But if you look at the numbers on page 2, you can see a very large number of direct and indirect jobs, and revenues to the government.
There are two methods of extracting oil sands. One of them is in situ and the other is surface mining. Both of them have their own particular challenges. They both have impacts on the land, on the air, and on the water. These impacts vary depending on the method of extraction, but they are significant and we must deal with them.
On page 4, there is a diagram showing the water use in the oil sands in surface mining. Page 5 shows it for in situ. In the diagram on surface mining, we'll start with the 100 units--whatever units you would like to use. Of these 100 units, 74 are recycled, and 26 are entrained in tailings, which makes them very difficult to get rid of under normal circumstances. We have 74 units coming back, so we must make up the 26 units from other sources. There's water that comes with the ore, which is the four units, and where it says “River” here it's a misnomer; it actually should be fresh water coming from the river, and runoff and all of that, making up 22 units. Evaporation is about four units and precipitation is about four units. So this is neutral here. The 26 units are equivalent to three to four barrels of water per barrel of bitumen.
We try to make it very succinct so that at least we're talking about the same issues.
In situ, we selected the SAGD, which, as you might have heard, is steam-assisted gravity drainage. Again, if we start with the steam, which is 100 units, the steam goes into the reservoir. Ten units stay behind, and 90 units are recycled. Sometimes you need some water treatment for that. You have to get fresh water, so you need 10 units of fresh water. This is the balance between 27.6 units of fresh and salt water...[Inaudible--Editor]...to treat it, and you lose about 17.6. So the balance is 10 units.
The 10 units are equivalent to about 0.7 barrels of water per barrel of bitumen, or many estimates say it is about one barrel for the in situ.
I refer you to page 6.
We believe that technologies are the only way you can resolve some of these challenges. We must have technologies to address water challenges in surface mining. We have to squeeze out the water in the tailings, and when this water comes out it is not in ideal condition sometimes. So you have to treat it, and improved water treatment is important.
In situ gets around the water problem by using less water, by using technologies that use this water like solvent-assisted SAGD, or air injection and combustion, and so on. Again, you need water treatment in this case.
The tailings ponds have been in the public eye for a very long time because of their enormity and because of other recent circumstances that highlighted the tailings ponds issue.
Again, at the very beginning of the mining process, the tailings ponds were estimated to be much less than that because they was based on the number of fines, the number of very fine particles, and no attention was paid at the time to the nature of the fines. The fines immobilize water around them, so a lot of water is immobilized, not based only on the size of the particles but because of the nature of the clays, and so on.
Understanding that will help a lot. It can help more if we pay more attention to it.
We put together a research consortium in the late eighties. Almost everybody in this consortium was a researcher from the provincial or federal government or the universities. They worked for five years for $25 million and they came up with a lot of conclusions that have been applied in the field.
I have a summary of these conclusions. The industry called that the silver bullet. They referred to it a lot, and I would say it focused information here that can be used. You got the companies, NRCan, and the Alberta government. We all contributed to that, and so did two universities.
This was the beginning. I think there's a lot to be done, and we should pay attention to various technologies.
Again, another issue that has recently had more attention paid to it is the volatile organic compounds, which come out from the tailings and the mine face and so on. I would say it affects both health and the environment. It has some GHG components to it. Again, some work has been done in different places on understanding what these compounds are and how to characterize them and how to look at their influence on the environment.
In summary, the oil sands are very important. We cannot abandon them. Improvements are made, but you have to keep in mind that if you have improvements in one area you have to look at other areas these improvements may impact, either positively or negatively. So we have to look at this as a whole rather than as one individual unit. It's very important, and we are committed to working toward a resolution to make it a responsible resource.