October 20, 2007

Passing Out in Upgrader Alley

In Alberta's "Industrial Heartland," massive developments rival those of the Athabasca tar sands region

by Lori Theresa Waller

The Dominion - http://www.dominionpaper.ca

When the sirens go off at Shell's upgrader near Fort Saskatchewan, Alberta, nearby resident Kathy Radke knows there has been another accident. As plumes of toxic vapour are picked up and scattered by the wind, she is expected to call an emergency hotline set up for the handful of families living in the immediate vicinity. The hotline is meant to tell residents the severity of the accident, and whether to "shelter in place" or to evacuate the area.

"Half the time, the info hasn't even been updated when we call," says Radke. She wonders why Shell doesn't supply the nearby residents with air packs that they can put on as soon as the alarms go off.

Welcome to Alberta's Industrial Heartland, a 78,550-acre area about a half-hour's drive northeast of Edmonton. This industrial sacrifice zone, home to dozens of refineries, petrochemical plants and other industrial facilities, is where much of the bitumen pulled from Alberta's tar sands operations will be upgraded. Some is already pumped here, through a 493-km pipeline, to the Shell upgrader. With two more upgraders under construction, and another 10 in various stages of proposal or development, the area is popularly known as "Upgrader Alley."

A few decades ago, it was mostly farmland. Several families still live scattered on patches of land between the massive industrial facilities. The Radkes live and farm on land that was bought from Kathy's in-laws in the 1980s by Atco Gas, which stores natural gas underneath the property in salt mines. When Kathy and her husband moved in, leasing their home from Atco, they were told they would be able to live and farm there safely for decades. With the rapid growth of industry in the area, the Radkes were soon surrounded by the clanking of machinery, heavy truck traffic and air pollution. Their house is two kilometres east-—and downwind—-of Shell's massive Scotford operation, which boasts the existing upgrader, a second under construction and a refinery. To the north, BA Energy is also building a new upgrader.

Since Shell built its first upgrader in 2003, accidents have occurred at the rate of about four or five a year, says Kathy. Last September, there were two gas leaks in the space of one week. Nearby residents were instructed to stay in their homes for several hours. Some later reported sore throats and headaches that lasted for days.

Shell's neighbours are exposed to routine emissions of sulphur dioxide and other toxic gases, which temporarily spike above regulated maximum levels on a regular basis. Over the past two years, Kathy's family has lost 45 dairy cows out of a herd of 140 and she suspects that the air pollution has something to do with it.

The region's flurry of upgrader construction is linked to the fact that what comes out of the tar sands is not in fact oil or tar, but bitumen, a low-grade, heavy fossil fuel. Upgrading is the process by which the thick, tarry muck is turned into a synthetic crude oil that can be sent to refineries. This extra step is part of what makes the production of oil from tar sands so energy-intensive, with greenhouse gas emissions three times higher than those associated with conventional oil production. More natural gas is eaten up by bitumen upgrading than by the mining process itself.

Some of the upgrading happens in Alberta's north, where the bitumen is extracted. But with its lower costs and easier access to workers, the industrial region northeast of Edmonton has become the place of choice for upgraders in the province.

The bulk of Alberta's bitumen, however, is still upgraded in the United States—-where the vast majority is also refined, sold, and consumed. Alberta politicians have been calling for a dramatic ramping-up of the province's upgrading capacities. "If we insist on just sending raw product out of this province and adding value to that product in another jurisdiction, the taxes on the value-added product will be paid in that jurisdiction, not in the province of Alberta," Premier Stalmach told reporters last December. Energy minister Mel Knight has been quick to reassure the public that Alberta should have enough capacity to upgrade about 80 per cent of its bitumen within a decade or so.

Albertans face a paradox. With the havoc created by the mining and in-situ extraction of bitumen from the tar sands, they already shoulder the brunt of the pollution created by the wrestling of oil from tar sands, while capturing only a small fraction of the profits. Greater involvement in the value-added process of upgrading would increase the public's economic return, but it would also concentrate even more of the pollution in Alberta.

There is also the possibility that the upgrader boom could overwhelm Fort Saskatchewan and other towns in the area, in much the same way that Fort McMurray--epicentre of the tar sands extraction operations--is already overwhelmed by economic growth that most locals say is too big, too fast. The growing pains experienced by Fort McMurray include rocketing housing costs, a homelessness crisis and a severe shortage of health care and other services. "Our water treatment plant will be at capacity next year. Our recreational facilities are overtaxed. Our landfill site is full," the city's mayor recently told a parliamentary committee. Is this what Fort Saskatchewan has to look forward to?

"What we're facing is a huge expansion to roads, infrastructure, sewer systems, water systems, bridges. How is that going to be paid?" asked Edmonton mayor Stephen Mandel in 2006. He estimated that the money invested in the last five years in Fort McMurray pales in comparison to what is proposed for the "Industrial Heartland."

For now, the protests of Kathy Radke and the handful of other residents directly affected by the upgraders are largely overshadowed by the spectre of jobs and money rushing into the region. But if things go the way of Fort McMurray, it won't be long until all of the area's residents experience the ugly side of Alberta's bitumen boom.

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