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Birthplace of pipeline controversy

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By Paul Hammel

FORT MCMURRAY, Alberta — Even those in the Canadian oil industry will tell you that mining oil sands isn’t pretty.

At the Syncrude strip mine north of town, huge scoop shovels gnaw garage-size bites of the dark sands from the terraced walls of the largest open-pit mine of its kind — a 1.5-mile-wide, 300-foot-deep hole scraped out of the boggy forest.

Dozens of dump trucks as big as barns rumble and groan up and down dusty roads, hauling away 400 tons at a time to processing buildings the size of grain elevators.

After a trip through a steam-belching “upgrader” plant — a maze of metal pipes, centrifuges and towers — that 400-ton load of sand eventually becomes 20 barrels of synthetic crude oil.

The mining area stretches as far as the eye can see.

Bright yellow dried sulfur, a waste product removed from the oil sands, is stacked in piles as big as shopping centers.

Nearby is a muddy mile-wide pond that holds the wastewater from the upgrader plant. It’s dotted with floating scarecrows and ringed with radar-activated, propane-powered cannons to scare off any waterfowl pondering a deadly landing in the oily water.

Roughly 7,000 workers a day labor for Syncrude.

They arrive in a 24/7 conveyor belt of buses from Fort McMurray, a boomtown known as “Fort McMoney” for its high wages, huge bonuses and expensive cost of living.

Wages average nearly $180,000 per household, which helps pay the bills for housing: A typical two-story house costs $740,000 here, more than double the price for a home in Edmonton, a four-hour drive to the south.

Depending on your point of view, Syncrude’s massive North Mine at Mildred Lake, amid the jack pines, yellowing birch and boggy muskeg of Canada’s vast northern forests, is either America’s best answer to its energy future or its worst nightmare.

It’s the birthplace of a controversy burning red-hot in Nebraska and the United States.

A visit to the oil fields offers a window into what is at the heart of the high-stakes, big-money fight over the Canadian oil industry’s need to process and transport its product. The clash pits environmental interests in both countries against those pressing for jobs and a U.S. ally’s alternative to Middle Eastern and South American oil.

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Canada’s oil sand deposits cover an area the size of Florida. They are estimated to hold the world’s third-largest reserves of oil, behind Saudi Arabia and Venezuela.

The deposits are called “tar sands” by most locals because of their thick, tarry appearance and “oil sands” by the more publicity-conscious. Canada plans to double production of such oil by 2020 and needs somewhere to send it.

The best bet is the United States — still the world’s largest consumer of oil and the recipient of 99 percent of the oil mined out of the oil sands.

Canada is eyeing increased pipeline capacity to its west coast so it can sell more oil to China, which owns 9 percent of Syncrude. But those projects face stiff opposition from western Canada’s First Nations, or native tribes, and aren’t expected to happen for at least five or 10 years.

That puts a lot of chips on a pipeline furthest along in the planning and permitting process: the Keystone XL.

The 36-inch pipe would connect this remote corner of northeast Alberta to the world’s largest concentration of oil refineries, along the Gulf Coast of Texas and Louisiana. The Keystone XL would double Canada’s pipeline capacity to the United States.

Those U.S. refineries are operating under capacity and face declines in the heavy crude oil they get from Venezuela and Mexico.

So they’re looking to Canada, which is already the largest U.S. oil supplier, providing more than one in five barrels of oil.

Alberta, the prairie province, has staked its future on continued demand for fossil fuels and is glad to oblige.

Officials in Canada maintain that while they support the development of renewable energy sources such as wind and solar, those sources aren’t well developed enough to meet future world energy needs, which they project to grow by 51 percent by 2035.

Canada and its oil sands are the answer, they say.

“At the end of the day, oil and gas will be a big part of our energy future. At least in our lifetimes,” said Travis Davies of the Canadian Association of Petroleum Producers.

Davies, Alberta officials and others in the oil sands industry are in a public relations battle royal to prove they are mining the oil sands responsibly and addressing concerns about environmental and health impacts.

Companies such as Syncrude, Shell and Suncor that operate open-pit mines are stepping up efforts to reclaim the pits and to turn “tailings” lakes into budding forests and ponds that support ducks and local wood bison.

Newer technologies are being developed to mine deep oil-sand deposits in a way that doesn’t require pit mining and the wholesale stripping away of forests.

Such in situ, or “in place,” mining disturbs only a few acres of land per mine and can reach 80 percent of the remaining oil, which is too deep for pit mining.

While it takes a lot of energy for such mining, officials say they’re reducing greenhouse gas emissions and working to further reduce them and operate more efficiently.

Critics say the environmental costs of stripping away the fragile forestlands and the extensive processing needed to turn oil sands into bitumen — the thick, tarlike oil recovered here — are too high.

The breakneck speed of development, they say, is outpacing environmental monitoring and research into increased levels of contamination in local rivers and slightly increased levels of cancer downstream from the mines.

Even some Albertans say a moratorium is needed on new development so regulators and scientists can catch up with a mining process that they say has left behind 223 billion gallons of toxic waters and requires 3.5 to 4 times more greenhouse gas emissions than extracting conventional oil.

Those statistics, and the gaping pit mines, are why environmental groups call this the world’s “dirtiest oil.”

“It’s clear to a lot of people that there are significant environmental impacts that haven’t been addressed,” said Nathan Lemphers of the Pembina Institute, a Calgary-based environmental think tank.

“The Keystone XL pipeline will provide a strong market signal for accelerated oil sand development,” Lemphers said. “While that will be good news for a small group of companies, it’s bad news for Albertans, bad news for the environment and potentially bad news for consumers in the state, because they’ll see higher prices at the pump.”

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The headquarters for the booming oil sand industry is Fort McMurray, a former fur-trading post along the wide and winding Athabasca River.

Some workers here say sarcastically that the best thing about Fort McMurray — where shifts are typically 10 to 12 hours long and temperatures can range from 80 above to 40 below — is seeing it in the rearview mirror.

But for tens of thousands of workers, from across Canada and as far away as Pakistan and the Philippines, it’s a “mini Dubai” of the north, where hard work can be rewarded with oil riches in a town where the northern lights dance in the night sky.

The big boom has come in the past 15 years, transforming Fort McMurray from a sleepy village into a city of 80,000. And that doesn’t include the 35,000 temporary construction workers living in remote camps carved out of the woods.

In town, you can whet your whistle at the Oil Can Tavern, cheer on the Oil Barons hockey team and then sleep it off at the Oil Sands Motel.

The faint smell of oil in the air reminds you where the money is coming from.

Luring workers to this formerly roadless wilderness has always been a huge problem. But they come, mostly younger people (the average age is 31.8 years) drawn by the $100,000-plus-a-year paychecks, bonuses and housing allowances, for agreeing to work for a period of years. There’s even a federal tax break for working in the remote north.

“The money’s here, and so are the jobs,” said 24-year-old Hillary Woodhead.

She hops aboard a company-chartered jet every month at the Pacific Coast town of Powell River, British Columbia, to come to work.

Woodhead works a three-week-on, one-week-off shift as a janitor/clerk at a remote work camp north of Fort McMurray.

Workers live in a maze of interconnected steel trailers that look like the shipping containers from oceangoing freighters. Inside, pool and foosball tables and big-screen TVs provide recreation. A well-stocked cafeteria provides dinners, cookies and gourmet coffee.

The food and lodging are part of Woodhead’s compensation. She figures her salary is double what she could earn in her old job as a licensed beautician back home.

“A lot of people my age are up here,” she said. “British Columbia is beautiful, but, unfortunately, there’s no money there.”

Americans, too, are drawn to the work created by the rapid mine expansion.

Mike Foster of Aurora, Colo., works for a Colorado-based contractor that does laser surveying and sells mine-planning software. Half of his work is now done on the road in Canada, and he expects to spend more and more time in the oil sands region.

Foster said the Syncrude pit mine is the largest he’s ever seen, and he’s worked with every kind of mining, from coal to uranium. People need to realize, he said, that such industries are heavily regulated and that they are required to reclaim mined lands.

“Sometimes I think we’re environmentalizing ourselves out of jobs,” he said as he boarded a plane to return to the States.

Half of the residents of Fort McMurray work in the oil sands business, and nearly 11,000 new residents arrived in the past year.

You can spot pit-mine workers by their pickup trucks. They are fitted with 10-foot-tall “buggy whips” that fly a fluorescent-orange plastic flag.

The flags provide an eye-level warning for drivers of the huge dump trucks in the pit mines so they know that far below, a tiny pickup is driving by.

Longtime regional Mayor Melissa Blake said Fort McMurray has moved past the days when workers slept in tents and campers because of the lack of housing.

Now there’s a Walmart Supercenter in town, along with a beautiful indoor recreation facility. There are enough Subways, Burger Kings and Tim Hortonses (a Canadian-based fast-food/doughnut chain) along major streets to make you feel like you’re in any major suburb instead of an isolated rural outpost at the edge of Alberta.

Now Fort McMurray is bracing for another influx. With the expected doubling of mining, an estimated 200,000 people will be living in the area by 2030.

Orange road-construction barrels are everywhere. The four-lane freeway is being expanded, a new bridge is going up across the Athabasca, and a new water-treatment plant is being built.

Housing is rising as fast as the Crown — the provincial government — releases new land for development, said Blake, who is something of a Canadian Sarah Palin, with her spunky personality, rapid-fire responses and vigorous promotion of her remote community.

Blake, whose region includes 10 villages that are home to Canada’s First Nations, readily admits that without the oil sand mines, there would be nothing here.

It was the mines that lured her father to Fort McMurray. She was a recruiter for Syncrude before she got involved in politics.

Everyone here, Blake said, wants “the cleanest, healthiest environment we can have.” Indeed, Fort McMurray has a progressive law that bans plastic bags at grocery stores.

She urges visitors to look past “the rhetoric” of those who oppose oil sand development.

“There are risks in just about any endeavor,” Blake said.

That goes, too, for a project that will help speed along the expansion of oil sand mining here, the proposed Keystone XL pipeline.

“Even if it doesn’t exist,” Blake said, “we’ll find a way to move forward.”

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