Report decries oil sands waste

Refinery expansions in the U.S. focused on processing crude fromCanadian oil sands show an entrenched reliance on fossil fuels evenas concerns grow about the effects of oil sands production, anenvironmental group said Wednesday.
Such multibillion-dollar investments illustrate a long-term shiftin refining toward so-called heavy oil, which requires moreenergy-intensive production and prompts worries about emissions andwaste runoff, the report's authors said.
"The first step is to start with awareness of what it means," saidEric Schaeffer, a former Environmental Protection Agency lawyer whois director of the Washington-based Environmental IntegrityProject, an advocacy group that produced the report.
"This is an intensely wasteful way to feed an oil habit," Schaeffersaid.
Canada is the biggest exporter of oil to the U.S., sending morecrude than Mexico, Venezuela and Saudi Arabia. And with anestimated 173 billion barrels of reserves, Canada's bounty issecond only to Saudi Arabia's.
The oil sands now produce 1.3 million barrels a day, which couldramp up to 3 million barrels a day by 2015, according to theCanadian Association of Petroleum Producers.
More and more companies have jumped into the oil sands game as highoil prices have made its costly production economical. The world'sfive largest oil companies, as well as Canadian producers and someindependent explorers and producers, have sands operations or jointventures.
But as oil sands production has increased, so have concerns aboutincreases in emissions and possible releases of toxic waste intowaterways.
Emissions from oil sands production far exceed those fromconventional crude production. Waste in some operations sits inso-called "tailing ponds" visible from space, the report said.
In late April, nearly 500 migrating ducks died after landing in aSyncrude Canada tailing pond. Such ponds are required to have noisedevices to scare off birds, but Syncrude's devices weren't workingin the aftermath of a snowstorm. The Canadian government isinvestigating.
Schaeffer acknowledged that pushing to cease oil sands productionisn't practical.
The report noted that refinery expansions and new construction arelong-term investments, indicating that the U.S. intends to receiveand refine Canadian crude for many years to come.
So instead of recommending an end to production and refining of oilsand crude, the report calls for the U.S. to reduce oil consumptionby improving efficiency standards for vehicles; raise emissionscontrol standards; consider alternatives to oil derived from thesands in Clean Air Act reviews of proposals for refinery expansionand construction; and account for sulfur, nitrogen, and otherimpurities in heavy oil when issuing construction permits.
Expansions are expected to add 800,000 barrels a day of refiningcapacity by 2011, according to the American Petroleum Institute.
A new refinery hasn't been built in the U.S. since 1976. A proposalto build one is under consideration in Arizona. Another proposalfor a plant was approved this week by voters in Union County inSouth Dakota.
Bill Holbrook, spokesman for the National Petrochemical &Refiners Association, said 22 expansion projects are ongoing,though not all are related to adding Canadian oil capacity.
Cindy Schild, manager of refinery issues for the American PetroleumInstitute, said Canada is stable, friendly and open to outsideproducers. It stands apart from resource-rich countries likeVenezuela or Russia that have squeezed access, or ones in theMiddle East and West Africa that are vulnerable to geopoliticaltensions or civil violence.
"We view the Canadian oil sands as a reliable source of energy,"she said.
She added that refiners have little choice but to revamp plants tohandle heavy oil like that produced in Canada and other countries,including Venezuela. Heavy oil contains more impurities than light,sweet crude from the Middle East, and requires more complicatedprocessing to turn it into gasoline and other fuels.
Also, Schild said, if U.S. refineries eschew Canadian oil, Chinaand other energy-hungry emerging countries will take it.
"Do you want it to be processed in a country with standards inplace to address environmental impacts maybe more stringently thanothers? It's going somewhere," she said.
kristen.hays@chron.com