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The Albertan region represents one important region in the Canadian economy. Ideally, this region, endowed with numerous oilfields, is among the main drivers of the Canadian economy. While this region is of economic importance, it comes with its social and environmental challenges. As such, in this article, we ask: what significance is the Albertan region to the Canadian economy?
Crude oil and its products are among the worlds most traded commodities. The majority of exporters come from the Arabian realm; however, Canadas oil reserves come second and third to Venezuelas and Saudi Arabias, respectively, with respect to size. The Canadian oil comes in liquid form or oil sands- a mixture of sand, water, clay and bitumen (McKee 2). Bitumen is a highly viscous tar-like oil that can only flow once its heated or diluted.
Oil sand is majorly exported to the US and has its major reserves skewed in northern Alberta. An analysis of the estimated quantity of the available deposits puts it at a figure of 174 billion barrels, dwarfing those estimated as non-sand oil (6 billion barrels) (McKee 4). This implies that most Canadian oil is derived from oil sands (97%). Canadian crude oil exports account for 2.6 million barrels per day, and it accounts for 5% of the GDP (McKee 5).
Economic-wise, the northern Alberta region represents a region endowed with large deposits of oil sands, a single-most important source of Canadian oil accounting for 98% of the total oil reserves (McKee 5). The important major deposits are found in the Athabasca-Wabiskaw, Cold Lake, and Peace River regions of Alberta. The major consumers of Alberta oil sands are the US refineries. The rate of consumption in the US has constantly increased since 2005.
By the year 2013, its consumption had increased by 102%, which accounts for 60% of the total production in Canada (McKee 6). The cost of crude oil varies depending on the technique used in mining, a function of whether it has been mined from shallow deposits or gotten from in-situ reservoirs. The cost has been rising from $34-35 per barrel in 2005 to $88-90 in 2010 (McKee 6). This is projected to increase as the number of consumers increase. The US refineries opt for oil sands as opposed to crude oil from their region, citing that their systems were initially designed to handle denser raw materials.
These systems are very expensive to reverse to suit their lighter raw materials leaving them with no option but embrace the Canadian oil sands. The petroleum industry benefits more than half-a-million employees, either directly or indirectly. The companies can afford to pay them handsomely and still maintain their profit margins. Importantly, with most regions still unexploited (174 bbl), consumer markets need not panic, for there are enough deposits (McKee 6).
On the social front, this region has positively impacted peoples lives in the larger Canadian economy. This industry has increased the living standards of the Canadian community. In terms of jobs, the petroleum industry is a significant employer within Alberta, impacting the livelihoods of over 239,000 Albertans directly (McKee 5). Currently, shares from oil sands trade at $8 per share on the Canadian stock market, a result that is largely attributed to the export market, e.g., the US. The impact of this industry is projected to directly influence more than half-a-million people across Canada in the next two-and-a-half a decade.
What impresses the Albertan workforce is the way oil companies hold their health and safety matters at heart. It is a requirement by the regions Energy Resources Conservation Board (ERCB) that companies design and adopt an Emergency Response Plan (EPR), a swift and efficient way of dealing with dangers. Also, workers are put on survival training programs before exploring offshore deposits. Companies like Newfoundland and Labrador put more emphasis on safety and, as such, are said to be building an industry for the future (Walsh and Newswires 4). Moreover, bodies like Western Canada Spill Services (WCSS) have been formed to quickly deal with spills, a safety precaution against fire.
The petroleum industry in Alberta faces environmental challenges that affect the entire component that constitutes the environment. These include air, land, and water. Petrol is a hydrocarbon and a major contributor to greenhouse gases (GHG). Canada accounts for a small percentage of the worlds population (0.5%); however, it is among the major contributors to GHGs (2%) (McKee 6). Of this, 0.1% goes to oil sands emissions. These are significantly emitted during flaring and venting processes.
With respect to water, the public is expressing concerns about the potential risk of coal-bed methane (CBM) and tailing ponds. On the other hand, the large tailing ponds jeopardize the ecosystem, affecting both wildlife and tillable land. Importantly, these companies are environmental-conscious and hence are adopting methods of addressing these issues, e.g., using carbon captures and sequestrations (CCS) to reduce carbon footprint.
In a nutshell, Alberta accounts for major oil deposits in Canada, a backbone of the Canadian economy accounting for 5% of the total GDP. The oil sands of Alberta have positively contributed to the economy, acting as important sources of raw material for the USs oil refineries. Also, it has positively affected the Albertans by improving their livelihoods thanks to the increasing employment opportunities. However, this industry has negatively affected the environment, but as a positive gesture, efforts put in place to stem these effects are evident, e.g., the use of CCS to mitigate carbon footprint.
Works Cited
McKee, Scott. Imports of Canadian Oil Sands Have Doubled Since 2005. BIPARTISAN POLICY CENTER. 2014: 4-9. Print.
Walsh, Campion, and Newswires Dow. Canadas Oil Reserves 2nd Only To Saudi Arabia. Petroleum world. 2014: 3-6. Print.
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