By on February 5, 2011

Alberta is a province in Canada. A lot is agricultural, but what is much more important are the treasures beneath the soil. Alberta sits on more than 1.7¬†trillion barrels of bitumen, better known as oil sand. That‚Äôs about equal to the world’s total proven reserves of conventional petroleum. Canadians are troubled that EVs might ruin these riches.

Oil sand competes with electric vehicles in insidious ways: Electric vehicles are expensive. They only make sense when the oil price goes up. It costs money to extract the oil from the sands. The higher the price of oil, the more sense it makes to harvest the sands. At 2006 prices, 170¬†billion barrels were considered economically recoverable from the sticky sands. That put Canada’s oil reserves in second place behind Saudi Arabia. However, it represents only 10 percent of what‚Äôs there. The people of Alberta should be as interested in higher oil prices as the proponents of EVs, one would think: The higher the price, the more sand can be turned into oil. Instead, the people of Alberta are getting very nervous.

‚ÄúElectric cars could make driving cheaper and cleaner, but also could put some Albertans out of work,‚ÄĚ worries the St. Albert Gazette. ‚ÄúCars are a major source of greenhouse gas emissions. Electric cars could take care of those emissions, but what would that do to the demand for Alberta oil?‚ÄĚ

The Albertans are one step ahead of us. Instead of getting anxious about vanishing oil reserves, they get apprehensive about a sinking demand by a wide adoption of EVs. Which would put Alberta out of business. They still remember the 80s when oil became cheap and most of their mines closed. They became rich again by the middle of the last decade. Now, Canada is the largest foreign source of oil for the United States, supplying nearly a million barrels a day from oil sand, says the Gazette. Checking data by the U.S. Department of Energy, the number makes sense. However, it also makes sense to say that Canada only supplied 22 percent of the imported oil in one of the last months of 2010.

Be it as it may, reading the papers about the success of EVs, Albertans are worried about a bust cycle. People did what people do when they don’t know what to do: They assembled a panel of experts.  The panel will first meet next Tuesday in Edmonton.

Talk organizer and St. Albert resident Perry Kinkaide already sees a new boom ahead for Alberta: It could mean a new auto industry in Alberta, he suggests, as oil companies shift from using oil as fuel to oil as a starting product for lightweight electric car parts. ‚ÄúIn the old days you needed to be near steel. In the new days, you may need to be where the oil is.‚ÄĚ Comforting thoughts – for Albertans.

Axel Meisen, chair of foresight at Albert Innovates Technology Futures, toots in the same vuvuzela: ‚ÄúAlberta should think of other uses for petroleum than for fuel, such as carbon fiber. This light, strong material will be popular in electric cars, and could see use in bridges and other buildings.‚ÄĚ

Al Cormier, the talk‚Äôs facilitator and executive director of Electric Mobility Canada, a national industry group that promotes electric vehicles, also sees no reason for alarm. EVs surely are the wave of the future and will lower the demand for oil, but ‚Äúassembling an electric vehicle probably takes just as long as assembling a regular vehicle,‚ÄĚ Cormier says, and he does not expect any job losses there. If the cars are assembled in Alberta.

The proceedings of the panel’s meetings will be available at www.abctech.ca.

Now here comes an heretic thought: If EVs¬† indeed become wildly successful and kill the demand for oil so much that Alberta will have to close oil sand mines and take to assembling electric motors and plastic parts, does that mean that us Luddites can drive down to the gas station and say ‚ÄúFill ‚Äėer up‚ÄĚ for, say, $1.80 a gallon?

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46 Comments on “Alberta: EVs Could Kill Canada‚Äôs Oil Sand Mines, And Jobs...”


  • avatar
    mpresley

    In an economy unfettered by government imposed distortions, capital flows to its most efficient uses vis-a-vis production, and supply will always reach an equilibrium with demand (although this equilibrium is dynamic).  Today, electric cars are a political, and not, strictly speaking, an economic phenomenon.  One thing is certain, aggregate consumer demand will always be directed toward efficiency; government imposed artificial manipulations (subsidies, taxes, tariffs, and so forth) are hardly ever directed towards it.  Also, today, whether electric cars are a good idea cannot be decided upon using strictly economic measures.  If so, it would be clear that dynamo-charged vehicles are a very bad idea.

    • 0 avatar
      charly

      Only local maximums, not absolute maximums. Government interference can lead to absolute maximums or in other words more efficient solutions than the market can reach.

    • 0 avatar
      HerrKaLeun

      yes capital flows to the most efficient use… most efficient for the investor in short term. But as a country government you should think of the whole country and the long term.
       
      I’m not defending certain government policies and programs… but a pure free market for money being invested would let us all cut down all trees and whoever is first becomes rich and everyone else is poor because of oversupply of wood and the forests are gone.
       
      Just think of the waste of having children. For 25 years they don’t make any money, cost a lot of $ and then they just gradually pay some taxes, but spend most of their money on selfish things. Without long term no one would have children – are you crazy, 25 years of expenses and never a positive cash flow? Or since people have children, just not give them any education and cut taxes. This improves cash flow a bit. You also can start having them work in coal mines when they are 10. teh current system of college etc. really is wasteful government spending….
       
      Yes, there are the right and left wing nuts that don’t like government to begin with. but even bible-camp is some sort of government.

    • 0 avatar
      Mike999

      EV’s stop the flow of money out of your economy to Arab Nations, making Canada richer thru the “Multiplier Effect”. ¬†That local money will more then make up for what you lose from tar sands.
      And with Canada experiencing much larger temperature variation from Global Warming then the US, you should be happy the Tar Sand project shuts down ASAP. ¬†Russia lost $17,000,000,000 in damage from their Wheat Harvest / Heat Wave. ¬†Global Warming isn’t going to be nice or cheap.
      Power from Wind is now down to 11 cent per kilowatt, it’s time you updated your stock portfolio to “future” technologies as well.

  • avatar
    OldandSlow

    Ain’t going happen very soon. My Luddite companions in China, India and Southeast Asia outnumber me by 10 to 1.¬† They are going to driving the price of petrol, not me.

  • avatar
    mdensch

    The fears expressed by Canadian officials in the article above are silly in so many ways that I’m not sure where to begin. ¬†I have to wonder what tea leaves they’re reading that predict that electric cars are going to overwhelm the automobile market and evaporate demand for oil any time soon. ¬†The disadvantages of owning and operating an electric car go far beyond the high initial cost and the technology to solve these problems is still years away, at least.
     
    Still, there are lessons to be learned. ¬†You don’t want to base your local economy on a single industry no matter how profitable it is. ¬†Since they have such a rich supply of this one resource they may as well start diversifying now and develop new industries based upon it.

    • 0 avatar
      Jimal


      Sometimes an organization just needs to put out something to show that they exist. Like the conveniently recent study published by Clinical Cardiology about the connection between cheering for the losing team in the Super Bowl and heart attacks. Apart from letting the world know about the existence of the publication Clinical Cardiology, what purpose does this release serve?

  • avatar
    charly

    Don’t see how making stuff in Alberta makes sense. Transportation cost for oil isn’t high because it is done by pipeline but it is high for manufactured goods as it can’t use waterways and is far away from end demand.

  • avatar
    RangerM

    It takes hot water to extract the oil.

    They should build a nuclear power plant, and use the excess heat to extract the oil.

    • 0 avatar
      PeteMoran

      They already plan to do that… Quite ridiculous.

    • 0 avatar
      Mike66Chryslers

      Ridiculous?¬† Ingenious IMO.¬† We can’t propel cars with nuclear fission, but we can use it to get the oil to run the cars.¬† Today, natural gas is used to boil the water that is injected in the ground.¬† When nat. gas price rises, this plan may keep oil sands extraction cost-effective.¬† It takes years to build a nuclear plant though, so they need to consider this well in advance.

    • 0 avatar
      PeteMoran

      @ Mike66Chryslers
       
      Actually, costs go way up, especially initially. What the CERI study was tasked with trying to show was that the average cost of recovery with a nuclear power plant would be lower than using gas until the end of the recoverable reserves.
       
      People should always be suspicious of energy supplied with lots of other energy to “make it”. It should be treated very sceptically like corn ethanol, for example.
       
      Current recovery energy inputs are ~1.2GJ nat gas per barrel (~5.7GJ BOE). Switchgrass (5x) or hemp (7x) ethanol would be more effective because they would be part of the natural CO2 cycle, not additive like these filthy tar sands.

  • avatar
    HerrKaLeun

    On the one hand TTAC predicts EV never (or very late) will have some significant market share. But now I read they threaten the oil industry already???
     
    Oil price will go up either way and the very last drop of oil will be exploited. With EV just a bit later. And assuming the same amount of oil is pumped every year,EVs just mean more Chines IC cars.
     
    I don’t have the numbers all straight, but tar sand oil requires a lot of energy (natural gas mostly) to heat steam to solve out the oil. I’m not sure what % of the energy you need to use to get energy from oil, but it sure is not nice. With that, tar sand oil will increase natural gas prices. So you may get a ct cut at the gasoline pump, but you pay more for heating and electricity (newer power plants use natural gas). In the end, the people still pay more. I also imagine tar sand being a natural disaster for the area where the Exxon Valdez leak will look like a drop in a bucket.
     
     

    • 0 avatar
      Steve65

      I also imagine tar sand being a natural disaster for the area where the Exxon Valdez leak will look like a drop in a bucket.
       
      Haven’t you heard? Only hippie nutjobs who hate people haivng jobs care about environmental damage. Smart people know that as long as there’s big money to be made, anything goes. Especially if it’s conveniently distant so nobody has to see it.

    • 0 avatar
      fincar1

      How would tar sand be a natural disaster? The tar is already in the dirt, for crying out loud. It’s a natural oil spill.

    • 0 avatar
      Kevin Jaeger

      The tar sands a natural disaster? ¬†If an oil company had a pipeline break and leak oil into the sands they’d be forced into a massive environmental cleanup requiring them to:
      1. Dig up the oil and sand mixture,
      2. Separate the oil from the sand and ship the oil away for recycling,
      3. Put the clean sand back in place and plant trees on top of the site.
      Which is exactly what an oil sands operation does, except the oil is in the sand naturally.

    • 0 avatar
      HerrKaLeun

      Kevin: the tar sand gets mined for the most part. At a minimum you have as much damage as with any other open pit mining. Then all of the bituminous sand (you didn’t think you can extract 100% of the bitumen?) gets dumped. The bitumen coming out also needs to be refined in less clean ways than “sweet”¬† crude. In addition the whole energy intensive mining operation and extraction.
       
      With liquid crude you drill one hole and you can cover many acres of oil field. A spill is contained to the pipeline or the hole. With tar sand you unearth the entire “oil field”. In addition all the problems with ground water from moving large amounts of soil, waste disposal (chemicals are used too, lots of…).

    • 0 avatar
      mitchim

      I have been living and working in Fort McMurray for over 5yrs now. These comments are for the most part accurate. Which is shocking seeing as we are seen as bad for the environment. I can’t speak for all the industry here but working at Syncrude we have had some of our reclaimed land certified by the government. Yes this is a big mining operation but keep in mind that only 2% of the oil is recoverable with open mines.
      As to the piece above. EV’s will have little to no bearing on our production here. Oil prices, Government regulations, investors, and economy will decide our fate. Until EV’s become a larger part of the market and the energy and parts required for them move away from oil; I say its a non issue.

    • 0 avatar
      Patrickj

      @Steve65
      I’m starting to suspect that this is the basis of Canadian environmental policy.
      They can claim to be green because their economy runs on extractive (logging, mining, oil pumping) industries in areas far more isolated than those in the U.S.

  • avatar
    mikey

    I guess I might have to come out of my self imposed exile to make a comment here.

    Its all about balance. With oil trading north of $90 a barrel Alberta is prospering. Young,and not so young from the other nine provinces, and territories are flocking there. With the massive wages, smaller industries are having a hard time keeping people. Its cetainly not doing a lot to widen the Alberta industrial base.

     On the other hand Ontario, and Quebec, the traditional industrial base of Canada is being killed by the high dollar.

    ¬†Its sort of a Catch 22. Every time the price of oil goes up, the “Loony” gains against the “Green Back”. Multi national manufactoring industries take production to the cheaper US labour market.

    Ontario’s loss is Alberta’s gain.

  • avatar
    Kevin Jaeger

    No one is seriously worried about electric cars destroying the demand for oil.  Alberta has had a very volatile boom/bust economy for decades, and is constantly looking for ways to mitigate the impact of the next bust.
    They have also had the experience of government policies deliberately designed to punish their success, and had the effect of making the bust cycle much worse.

    • 0 avatar
      M 1

      We sell mining equipment into Canada at least weekly. We talk to these people almost every day. We hang out and drink beers and have dinner with them when we visit for equipment inspections. I can’t ever remember a single person up there even mentioning EVs, let alone actually worrying about it.
       
      What the hell is a “talk organizer”? Maybe you should try talking to the people who actually work the oil sands. Crazy, I know.

  • avatar
    GS650G

    Oil isn’t just for cars, petrochemicals are found everywhere in our daily life and demand there has increased not decreased. The world uses oil to make things.
    Take lightbulbs as an example. Conventional lightbulbs consist of glass and metal while CFLs have plastic and electrical parts in addition to chemicals inside and take far more energy to produce. It could be argued that making incandescent bulbs requires energy from any source and raw materials sourced locally from recycled while CFL really doesn’t fit that narrow mold.
    Sure they use less energy while running but the raw materials are more dependent on dead dinosaurs.

  • avatar
    wmba

    Alberta is a Canadian province. Well, who woulda guessed. St Albert, well that’s just a district of the capital, Edmonton. So the Gazette¬†is just the local rag.

    This conference is not a provincial or federal government thing, nor are the people quoted “officials”. They’re academic people and the looney fringe getting together for a group hug. Cannot see anywhere that the government organized¬†the panel, nor has this event been mentioned on the news.

    I have several relatives in the oil and gas biz in Calgary, and recently visited. Pickup trucks and the car analogue, the Infiniti G37, abound and the provincial government spends megabucks trying to get the US to buy more oil from tar sands. Right now, California is about to swear off “dirty” tar sand oil, becaise it doesn’t meet their eco-outlook. Good luck finding a friendly replacement supplier elsewhere for the over two million barrels a day we send the US. As the Chinese have already said, if the US doesn’t want it, we do and are willing to build a pipeline to the West Coast to get it.¬† But that would have to pass through tree-hugger BC and take forever to get approved, so exporting the stuff to the US is the cheapest way to go and the path of er, um, least resistance, shall we say.

    I cannot imagine a worse place to own an electric car than Alberta. Miles and miles of absolutely nothing except for gas wells and some grain fields extend in all directions. The distances are huge, the weather in winter damn cold. Perhaps you could use one in Calgary or Edmonton, but even there, things are so spread out, can’t imagine an EV being much good for 99.9 percent of people.

    Alberta is a place of hope, where a “can do” attitude exists, so I’m sure they’ll do OK. But it’s not much of a commentary to imply that they’re “worried” about EVs and loss of oil production except in the most intellectual sense. The average Albertan knows that they can sell every drop of oil they can produce for virtually ever.

    • 0 avatar
      John Horner

      wmba nailed it.

    • 0 avatar
      mikey

      @wmba….well said. Alberta is doing a great job extracting the oil from the sand. And for sure¬†Alberta certainly doesn’t need to search for a market.
      Here in Ontario we do great job bulding cars.  GM,Ford,Chrysler,Toyota and Honda all have car manufactoring facilities in Ontario. Alberta can continue to pump oil. We can look after building cars Electric or otherwise.

      Let me add this …. The nice people in California dont want buy dirty oil, eco stained, as it is, from thier friendly northern neighbors. Fair enough. There’s all kinds of “not so” friendly people willing to sell you blood stained oil.

    • 0 avatar
      tiredoldmechanic

      I don’t think you’ll ever see China as the main customer for Alberta oil, and not just because the pipeline would have to come through our “tree hugger” province. Political posturing from a few California lefty blowhards aside, supply and cost issues mean our neighbors to the south will always be the best customer for Alberta’s oil. EVs? That’s pretty funny. I doubt a single resident of Fort Mac or even one oil company executive would give that a second thought.
      ¬†Production is ramping up quickly, the price of a barrel of oil is going up, and development of production facilities of all types is underway again. The average Albertan couldn’t give a fig about EV’s, they are too busy building homes, buying cars and planning the annual vacation to visit us here in tree hugger BC. I suspect the sources quoted in that article are the 3 socialists and 2 environmentalists rumoured to be living in Alberta. The only threat to Alberta’s prospertity comes from Ottawa liberals, if past history is anything to go by.
      ¬†But hey, don’t worry. If the oil market should collapse due to EV’s, here in BC we got it covered. Let’s talk about hydro electricity…..

    • 0 avatar
      gslippy

      wmba and mikey have both got it right.

  • avatar
    zigpenguin

    EVs are not going to be prevalent until they are cheap and have decent range. There are many reasons to be skeptical of EVs. That said, if EVs are prevalent enough that they are hurting the price of oil (and thus have solved some of the current problems with them), isn’t that one of those _good_ problems? It may hurt Alberta, but it also hurts Venezuela, Iran, Nigeria, Russia, etc.
     
    Separately, if EVs are bad because they reduce gas consumption, what about more fuel efficient cars? Is Alberta going to come out against the Prius? In any event, China and developing countries will more than make up for the difference of EVs. But at least it will be their money supporting dictatorships instead of ours.

    • 0 avatar
      tiredoldmechanic

      I don’t think anyone is suggesting that EVs are bad, just postulating that they may be game changers for some people. But it’s important to recognize that energy, whatever it’s form, must be generated. If everyone switched to electrics next week, the demand on the electricity infrastructure would create the need to generate a lot more juice. Where I live electricity is cheap and plentiful,¬†generated by damming rivers. You are more likely to hear it called hydro than electricity.¬† But what if you live in Ohio, or Manitoba, or Texas? Then it has to be generated by burning something, like say oil.¬†Nuke? Good luck getting that approved these days. Solar works in some places, wind turbines in others if you have the room (they do it in Southern Alberta actually)¬†but the reality¬†is a lot of people will have to rely on oil or coal fired generation. A lot of those expensive¬†petrocarbons will come from… Alberta!
      ¬†One way or another you gotta fill up a tank if you want to go anywhere in this world, and that isn’t going to change anytime soon.

  • avatar

    I feel like this would be a good thing (is oil sand minding stops). Read up on how the oil is actually extracted from the oil sands. The process is really wasteful and polluting. The biggest farce of Canada being environmentally friendly are these mining activities.

  • avatar

    I agree that wmba nailed it. I have lived in Alberta all of my life and one thing has always been clear: this is a tough province built by tough people who took big risks to build the early oil industry. Incidentally, the early oil industry found more risk  takers willing to invest in Alberta in the US because eastern Canada was not interested. As for the alarmists in the St Albert newspaper story? The glass will always be half full for real Albertans. Must have been a very slow news day.   

  • avatar
    oboylepr

    Unless the figure out a way to power all those Airbus and Boeing jets with electricity, and all those ocean going cargo, container and cruise ships too and, start making plastic out of something other than oil; Alberta has little to worry about.

  • avatar

    This is silly. It’s going to be a couple of decades before EVs cause demand for alberta oil sands to slacken. If ever. Unfortunately, because harvesting those oil sands is very badly polluting.

  • avatar
    Crosley

    Electric vehicles are the last thing I would be worried about if I were Alberta.¬† You’re talking about something that could possibly reduce the use of fossil fuels globally by .01% over the next decade.
    High oil prices are here to stay.¬† Even if battery technology makes leaps and bounds (and I hope it does) there’s equipment and vehicles that will never in our lifetimes be battery-powered (like commercial airliners for starters)
    Fossil fuels will still be a HUGE part of our energy for certainly the rest of my lifetime.  With emerging economies continuing to grow, oil will always be a valuable commodity.

    • 0 avatar
      mik

      EXACTLY.
       
      Not to mention the electricity for the EVs has to come from somewhere. I’m thinking the oil would just end up at power plants rather than directly in vehicles.

      It will be a long long time before EVs even make a dent in sales, emissions, etc. I’m amazed people don’t think about the energy thats spent mining all the lithium and production of the batteries for the EVs etc. (Then replacement/recycling/disposal down the road)

  • avatar
    lubbock57

    As an engineer in Edmonton working oil sands projects………daily discussions about EVs are about as common as much as the Leafs winning the next Cup.

  • avatar
    mdensch

    or the Americas Cup for that matter.

  • avatar
    PeteMoran

    Bah! The Chinese must be cursing their luck. They should have bought Canada, rather than that bunch of whingers to the south.

  • avatar
    pgcooldad

    If I could, I would pay an extra 10-20c per gallon for exclusive Canadian gasoline. If someone can mark a pump and guarantee 100% of it, it would be well worth it to me. I love Canada and Canadians!!
     
    Signed,
    Proud born in Brazil, Italian with American Citizenship.

  • avatar
    JaySeis

    The US demand will eventually pale with the world demand for energy, thus the proposal to ship Wyoming coal to China will eventually be followed by Alberta oil (from sand) to god knows where. The EV consequence is probably not going to grow at a rate to influence such mining decisions, it may take decades. In the interim, other energy sources will begin to compete and the multitude of sources will compete against each other. It’s possible that the consumer will benefit but I doubt it because the R&D to develop alternative fueled vehicles and alternative fuel delivery systems will not be cheap.

  • avatar
    dcardno

    “Be it as it may, reading the papers about the success of EVs, Albertans are worried about a bust cycle.”
    Sorry, but just what papers are they reading in St Albert? What “successes” do we see from EVs?¬† Let’s get a grip – EVs are a pipe dream working hard to become a fantasy.¬† Fossil-fuelled transportation will be an economic driver for at least the next thirty years, and probably longer.

  • avatar
    rpn453

    ‚ÄúCars are a major source of greenhouse gas emissions. Electric cars could take care of those emissions, but what would that do to the demand for Alberta oil?‚ÄĚ

    Huh?¬† 50% of Alberta’s electrical power is from coal, 40% is from natural gas.


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