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How Ethical Is Alberta’s Oil?

Canadian oil sands in plain polarized light
Canadian oil sands in plain polarized light. Dr. Julie Dee Bell, CC BY-SA 4.0, via Wikimedia Commons

In What Is Ethical Oil?, I discussed various ways philosophers define the word ethical.

Since we got this philosophy out of the way in that post, let’s get into the weeds about how Alberta’s oil and gas industry harms people, the climate, wildlife and our economy.

CLIMATE, ENERGY AND ALBERTA’S FUTURE

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Methane Leaks

Tim Doty, a former regulator for the Texas Commission on Environmental Quality, was brought to the Alberta-Saskatchewan boundary by The David Suzuki Foundation to look for oil and gas emissions. 

According to CBC News, he surveyed 128 sites and said he “…just can’t describe the magnitude of the emissions we saw.”

Doty witnessed unlit flares and flares burning less than 98 per cent of the gas they are assumed to. He also claims there needed to be more recovery units to collect fugitive gas. 

At least the leak Doty observed is recognized. Many others are completely unknown. According to the Financial Post, in September 2022, the European Space Agency found a methane plume near Lloydminster that Canadian regulators, including the Alberta Energy Regulator (AER), were unaware of.

Methane related to human activity is responsible for approximately one-quarter of the planet’s warming, and Canada is the only G7 country whose methane emissions have increased since 1990. The only ethical response to these methane leaks is to phase out oil and gas because, as I explained in my last post, contributing to climate change is unethical.

Environmental Liabilities

The oil industry has saddled the province with enormous environmental liabilities, including oil sands, tailings ponds and orphaned wells. 

According to Energi Media there are 1.7 trillion litres of toxic waste in the 37 oil sands tailings ponds found in Alberta, 91,000 unreclaimed plugged wells and 82,000 abandoned wells.

In an interview with Mandy Olsgard, a former senior toxicologist for the AER, Mandy explains the difference between chronic and acute toxicity. 

“Acute toxicity would be like immediate effects to life, survival. It’s death of whatever is being exposed. Generally, in Alberta, we test that with rainbow trout.” 

“Chronic toxicity, that’s where we measure sub-clinical effects, so maybe effects on behaviour, function, the immune system, different organ systems.”

Mandy argues that the Imperial Oil tailings pond leaks are an example of chronic toxicity. This makes sense when, according to the Energy Mix, the AER was aware that the site was leaking since as early as 2019.

Then there is the matter of cost. According to Global News, internal documents from the AER stated it would cost around $260 billion to clean up the oil patch. But who will pay for this cleanup?

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The Narwhal explains that the AER’s Mine Financial Security Program ensures that the AER holds money that companies put aside for future cleanup projects. In reality, however, an AER spokesperson told the Narwhal that the amount held in deposits is nowhere near enough for cleanup.

There are $939 million being held for oilsands companies, which is only three per cent of the estimated cost of liabilities.

This is why taxpayers are increasingly responsible for the cost of cleanup. Some examples of this include the $1 billion in taxpayer money that went to the cleanup of wells owned by Albertan companies as part of the pandemic stimulus package and the half a billion received by the Orphan Well Association. Tailings ponds and orphaned well cleanup, or lack thereof, is an environmental and financial burden on our province.

Human Rights

Canada’s oil and gas industry not only harms the environment but also people’s health. According to a report from the National Resource Defense Council (PDF icon), those living near tar sands experience adverse health outcomes and even higher cancer rates. 

This report claims that “…the snow and water in an area extending outward 30 miles from upgrading facilities at Fort McMurray contained high concentrations of pollutants associated with fossil fuels, known as polycyclic aromatic hydrocarbons (PAHs).”

These PAHs are associated with DNA damage, developmental delays and cancer. In 2013, elevated levels of the carcinogens benzene and styrene were found in the air north of Edmonton, as well as high levels of leukemia and other blood and lymph cancers. I would hardly call that “ethical oil.”

Oil and gas development also destroys land and homes sacred to many Indigenous Peoples. Alberta Beyond Fossil Fuels interviewed Jean L’Hommecourt, an activist, registered Treaty No. 8 member, Indigenous Denesulinè and Keepers of the Waters board member. She described how nearby industrial operations threaten her land and that she can no longer drink or fish from the polluted Athabasca River.

“There aren’t as many areas where we can go and enjoy our outdoor excursions,” Jean says. “It’s hard to go berry picking now. You run into fences, gates, and private properties. These are infringements on our rights to practice a traditional life. The government is allowing this infringement to happen.”

Jean and her family used to enjoy camping at the Muskeg River, which they can no longer do.

“There are so many special places that have been taken away and where we are forever blocked or forbidden or not allowed to go into anymore because of the expansion of mines.”

The recent Imperial Oil Kearl project spill even impacted Jean. This spill caused 5.3 million litres of contaminated water to leak into the surrounding muskeg and impacted Jean’s ability to hunt safely. This is because oil can contaminate animals who pass by, making their meat unsafe.

This disaster is just one example of many in a recurring pattern of harm to Indigenous lands by the oil and gas industry. These events contaminate the environment and distance Indigenous communities from their sacred land.

State Capture

The unfortunate truth is that the Alberta Energy Regulator (AER) is industry-funded and compromised. They put the oil and gas industry’s interests above the interests of farmers, Indigenous communities and the environment. 

Energi Media got the inside scoop from a source who worked for the AER. This source claimed that in an executive meeting, oil and gas industry representatives claimed they owned the AER because they funded them, and the AER executives agreed.

University of Calgary law professor Martin Olszynski was also interviewed by Energi Media, where he explained that discretion is the AER’s biggest weakness. This means that rules can be changed on a case-to-case basis and can be manipulated to benefit certain parties.

There have also been three Alberta government investigations that have found the AER guilty of mismanagement, misusing public dollars and conflict of interest.

Reports from Alberta’s auditor general, public interest commissioner and ethics commissioner criticized the AER for creating the International Centre for Regulatory Excellence (ICORE). They found that creating ICORE was not in the AER’s mandate and was an inappropriate use of public funding.

According to these reports, ICORE was created to ensure the future employment of the then-CEO of AER, Jim Ellis and three other AER employees. These reports found that the processes meant to prevent corruption, including the AER board, were ineffective.

The AER is also guilty of withholding information from the public, such as the full duration of the Kearl tailings ponds spill. Imperial Oil introduced a seepage interception system as early as 2015, and the AER was aware of this seepage by 2019.

It wasn’t until May 2022 that the AER sent a single email to one First Nations contact to inform them about the spill, and they didn’t even follow up on that email. This means there were likely years where local Indigenous Peoples harvested from contaminated lands.

The Financial Post interviewed Drew Yewchuck from the University of Calgary’s Public Interest Law Clinic, who claims the AER broke the law by withholding information about the Kearl spill. He argues they didn’t abide by Alberta’s Freedom of Information and Protection of Privacy Act, which states that “…any public body must immediately release information that involves significant harm to the environment or to the health or safety of the public.”

Things don’t look much better regarding the Canada Energy Regulator (CER) either. According to Liam Fox’s thesis paper from Simon Fraser University, the CER uses its public interest mandate as an excuse to circumvent consultation, especially with Indigenous groups, to ensure that oil and gas projects proceed.

The Trans Mountain Pipeline (TMX) is an excellent example of this. Fourteen First Nations groups sued the CER for approving this project because it Indigenous Aboriginal title claims, fishing and hunting rights, and access to clean drinking water. 

The court eventually overturned the pipeline approval in 2018, claiming that they couldn’t follow the law and adequately judge how the project affects the environment and public interest.

And this is just one example of how often the CER has prioritized industry over First Nations’ rights, public well-being and the environment.

Economic Harms

According to Investopedia, oil prices highly influence the Canada-U.S. exchange rate. Generally speaking, when oil prices rise, so does the loonie. This is because Canada earns most of its U.S. dollars from selling crude oil.

Canada was the fifth-largest exporter and producer of crude oil in 2019, and oil is Canada’s primary source of foreign exchange earnings.

Turns out, a strong crude oil-fueled loonie harms agriculture and industry trade. CBC’s article on the loonie outlines how a robust Canadian dollar increases the cost for Canadian manufacturers and exporters when they market their products in the United States, which impacts everything from timber to automotive components.

When the Canadian dollar is strong, American companies enter the market more aggressively, while Canadian firms, grappling with heightened competition, have to reduce expenses.

A strong loonie can also lead to currency exchange issues with investments. If a stock’s U.S. dollar price rises, its Canadian dollar price doesn’t always rise with it. Canadians with certain stocks can even end up with less money when they convert them to Canadian dollars.

A study from the journal One Earth, for the first time, calculated that Shell, ExxonMobil, Total, Saudi Arabia’s oil company, BP and Chevron are responsible for $5.4 trillion of damages due to weather events like wildfires, sea level rise, drought, melting glaciers and more.

According to this study, this number is likely low, as it excludes lost lives, livelihoods, species and biodiversity, as well as factors of well-being not measured by GDP.

The worst part is that oil and gas companies are also guilty of tax evasion. This information is open to the public, and you can read all about it at Alberta.ca. In 2022, Rural Municipalities of Alberta conducted a survey that reported $253 million in unpaid taxes from oil and gas companies.

The oil and gas sector’s high emissions also mean other sectors of the economy must reduce their emissions even more if Canada is to reach its overall emissions reduction target.

Unethical Oil

When looking at liabilities, human rights, regulations, leaks and the economy, all I see is unethical oil. This article was hard to write because it’s all bad. Thankfully, there is good work being done outside the oil and gas industry.

If you are sick of these unethical practices and want to make a change, consider working with Alberta Beyond Fossil Fuels.

Or consider donating to our GoFundMe, so you can help change minds about the unethical fossil fuel industry.

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What Is Ethical Oil?

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