Crude oil from Canada’s tar sands is known to be one of the dirtier and more costly to process crude varieties, a fact that has been a major stumbling block in the construction of TransCanada Corp’s (TRP) proposed Keystone XL pipeline that would stretch from Alberta to the Gulf of Mexico.
Tar sands crude, far heavier than the WTI or Brent varieties, is extracted as a thick, sludgy paste, and must be melted down using steam and heat in order to get it to flow through pipelines. The process of getting the fuel from one place to another also requires the burning of natural gas, which itself creates carbon pollution.
Now, however, it appears as though Canada’s oil industry, increasingly eager to up its exports of tar sands crude, has resorted to a creative new process in order to cut carbon emissions resulting from the extraction process.
Research has indicated that the CO2 emissions from the later stage of the extraction process can actually be blended with sewage water and subsequently fed to algae which can then be turned into useful products such as cattle feed.
A number of Canadian oil companies have been enthusiastic about the research, and have participated in making the process a viable one. They include Canadian Natual Resources Ltd. (CNQ) , Imperial Oil Ltd. (IMO), Suncor Energy Inc (SU) , and TransCanada.
The new process has been billed as a response to President Obama’s rejection of the Keystone Pipeline, if it can be proved that the project would provoke a significant increase in carbon emissions. The president has come under strong opposition to Keystone XL at home, with critics saying that the environmental costs would be too high, and the economic benefits negligible at best with most of the job creation coming from temporary construction work.
As for Canadian Natural Resources, the company plans to have the algae project up and running by the beginning of 2014, and claims that the algae pond it is building at one of its sites in Northern Alberta will decrease emissions by between 15 and 30 percent. Furthermore, the company plans to share the results of its research with its competitors.
Critics have called the algae scheme little more than an exercise in public relations, similar to the often-cited “clean coal” technology that purports to trap and store emissions, keeping them from dispersing into the atmosphere. Regardless, the sincerity of Canada’s oil industry in building the so-called algae ponds is indeed ironic. Unlike the United States, Canada has gone to far greater lengths to shift from coal-based power sources to renewable sources in an effort to curb greenhouse gas emissions.
Canadian Natural Resources was down 1.35 percent in midday trading, to $30.06. The company is up 6.5 percent on the year.
[Image: Tar Sands in Alberta, Canada, courtesy of WIkimedia Commons]
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