Oil sands key to Canada’s economic stability, says Thompson

Western Engineering News | April 9, 2012
By Heather Travis

Relying on oil for energy may not be a sustainable model, but income the oil sands generate will fuel the economy and puts Canada in a position to be a world leader and transform the energy sector, says industry insider Don Thompson.

“In Canada two-thirds of our energy is carbon-based; in the United States, it is 90 per cent. There is no doubt in my mind that is not sustainable. It will have to change over time," said Thompson during a lecture on "Canadian Oil Sands - Canada's Energy Advantage" held at Western Engineering on March 21.

“The only way that is going to change is if our economies are strong and if they are strong for the long time it is going to take to transform the energy infrastructure in North America,” he continued. “The only way that is going to happen is if our economy is banging on all cylinders and sorry, right now that means oil.”

Thompson is the executive advisor, sustainability and oil sands outreach for Canadian Oil Sands Limited. Most recently, he was president of The Oil Sands Developers Group (OSDG). As president, he was the external voice presenting OSDG members’ actions and ideas to audiences primarily across Canada and in the United States – industry, community and government. He also served as corporate secretary and general manager of environment, health and safety for, and as an officer of, Syncrude Canada Ltd., a position he held for 18 of his 32-year career with Syncrude.

Thompson joined the oil sands industry before it earned the reputation it holds today – at the time it was viewed as a “technical and economic experiment,” he says. The major problem facing the industry three decades ago was extracting the oil in a reliable and robust way, however modern engineering technology has allowed businesses to tap into this resource.

“Thanks to the technological prowess of the people who tackled the oil sands and thanks to the entrepreneurs, Canada is now third largest in the world for crude oil reserves,” noted Thompson.

Canada has the third largest oil reserves in the world behind Saudi Arabia and Venezuela; 97 per cent of these reserves are found in the oil sands. Modern engineering technology has allowed the industry to reliably and robustly unlock the

“With the oil sands and Canada’s strong environmental and human rights regulations, we are of great interest to many countries around the world,” he said. “Half the world’s accessible oil is in Fort McMurray (Alta.).”

Fort McMurray contributed $32 billion to the Canadian economy last year. According to the Canadian Energy Research Institute, by 2035, 905,000 jobs will be linked to the oil sands as a result of its ongoing development.

As we move forward developing this resource, we must continue to work to achieve the balance between economic contribution, environmental sustainability and energy security, he suggests.

“…The balance between economic considerations and energy security for our nation and the need to protect the environment, that is a balance that my industry has always sought and frankly, I think, has achieved,” said Thompson.

Oil sands crudes are more carbon-intensive than some of the crudes being imported into North America, he says, but notes they are less carbon-intensive than others. “They are middle of the pack,” he said.

“We all know we have to keep getting better. Since 1990 we have driven down the emissions from the oil sands by 29 per cent per barrel.”

Technology is key to moving the industry forward. Only 20 per cent of the resources are shallow enough to be mined, he points out. In order to access the entire oil sands resources, new technology had to be developed.

“Only as recently as a dozen years ago have we figured out how to reliably produce 80 per cent of the resource that is too deep to be mined,” he said. “Were it not for game-changing technologies, we would not have much of an industry today to build upon.”

Production capacity in Fort McMurray today is slightly less than 2 million barrels per day, with about 600,000 barrels under construction each day.

The oil sands industry has also focused on continuous improvement in the areas of emissions and water management, land reclamation and environmental monitoring towards reducing its environmental footprint.

Overall, the oil sands are contributing to Canada’s energy and economic security, he said.

“Unlike many countries in the world, we are energy secure for the very long term,” he said. “I am proud the oil sands have contributed to the standards of living and employment Canadians enjoy.”

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