OIL INDUSTRY By: Megan duong


There is no doubt that oil is a very valuable resource. But the real question is, will it exist in our future? Well that all depends on how we sustaine it. Oil is a nonrewable source, but is also the most relied on source. The oil and gas industry is the largest private sector investor in Canada. In 2015, the oil industry made a total profit of $23 billion for Canada. The top 5 oil reseves in the world include Veneuzuela, which produces 297 billion barrels of oil, Saudi Arabia, which produces 265 billion barrels of oil, Canada, which produces 175 billion barrels of oil, Iran, which produces 151 billion barrels of oil, and Iraq, which produces 143 billion barrels of oil. The Oil Sands are the single largest petroleum resourde in the world. They produce about 1.7 trillion barrels worth of oil. The oil production in Canada is spread out all over the country. 68.8% of oil production is in Alberta, 16.1% is in Saskatchewan, 0.7% is in Manitoba, 11.4% is in Newfoundland and Labrador, and the rest is off shore.

This map shows how much oil reserves and oil production there is in each area.


What Are They? How Does it Affect Humans, the Environment, and the Economy?

Oil sands are made up of four components. Water, sand, clay, and bitumen. They can be found in places such as Russia, Venezuela, the U.S., and Canada. Oil Sands are basically "the deposit of loose sande or partially consolidated sandstone containing petroleum or other hydrocarbons".

In Alberta, we have a lot of oil sands. Underneath Alberta, we have these pockets of oil that are mixed with sand and gravel. Normally to extract oil, it's as simply as drilling a hole into the Earth's surface. But, in order to extract the oil from the oil sands. We have to do a little bit deeper into the Earth's crust. Then we have to be able to separate the sand anf gravel in order to just have the pure oil. This form of extraction one of the more expensive ones. It's a much more slower and difficult process.

The video above talks about all of the negative impacts the Alberta Oil Sands have on our economy, the environment, and humans.


How Sustainable is the Oil Industry?

Oil isn't the most sustainable industry out there. While currently oil is very sustainable for the economy, in the future, it might not be as sustainable. Oil plays a big part in Canada's economy. It's the largest industry in Canada. Right now, Canada is receiving tons of money from the oil industry, but it's not always going to be like that. Oil is a nonrenewable source so there is a very limited supply of it. Even then, a lot of the oil is way too far deep into the Earth's crust making it inaccessible. Very soon, the amount of oil that is available will be gone. This results in the industry not making any money. When we do start running out of oil, the prices will start to go up, yet by then we will start to transition into using more renewable sources. For example, solar energy. Once we do start to use more renewable source, Canada will then have new energy source and a new way to make money for the economy.


What are Some Methods of Extracting, Developing, and/or Producing Oil? How Much Does it Cost to Extract Oil?

Oil is underneath deep rock. In order to extract it, a drilling method is used. Basically, using a specialized machine, the workers dill a hole into the Earth's surface to be able to get the oil out. To complete this process, they use something called and oil rig.

Fracking is a extracting method to get oil and gas. Fracking utilises water pressure and steam to frature the Earth's crust to relise the oil and gases in pockets. In order to fracture new wells, it can cost up $8 million, while refracking can cost up to $2 million.

Unfortunately, fracking is a method of extraction that should be stoped. Fracking leads to natural disasters, such as earthquakes. Fracking mainly causes magnitude 3 earthquakes, which people tend to not be able to feel. Just a few months ago, Oklahoma experienced a magnitude 5.6 earthquake. Within two years, Oklahoma had experienced the same number of earthquakes one would experience in 1000 years. Also, fracking lowers our water supply. In order to fracture one well, it would take up about 8 million gallons of water. This then affects humans because we need water to survive. Maybe the only benift to fracking is that it reduces the price of natural gases.

This graph shows the price of natural gases as we continue to fracture the Earth's surface throughout the years.


After the Oil has Been Extracted, Where Does it get Sent to? What Products are Made From it? Where/Who is the Final Product Sent to? Where is it Sold? Can it be Used for Trade?

After oil has been extracted, it goes to through a process in order for it to be purified. The video above shows you just that. What this process does is it separates the oil from the gas and water so you end of with pure crude oil. After that, the oil gets sent to refinery. The refinery then turns the crude oil into products such as liquefied petroleum gas, gasoline or petrol, kerosene, jet fuel, diesel oil, and fuel oils. Finally, those products would be distribution to places such as gas stations, furnace oil companies, or they would go to another processing factory to get turned into lubricant, which is another form of oil.


How Much Money Does the Industry Make? What are Some Financial Challenges Within the Oil Industry?

The oil industry has had a major impact on the economy. With it being the largest industry in Canada, it has been doing very well financial wise. Poven reserves in Canada are worth up to $14 trillion dollars. That's equivalent to 10x Canada'a GDP! Back in 2015, oil productions made a total of $23 billion dollars in Canada. All of this money contributes towards our corporate taxes, personal income taxes, property taxes, royalties, land sales, and much more. In the next 20 years, it has been assumed that the oil sands production will pay $1.2 trillion in both provincial and federal taxes. Including royalties. "These revenues contribute to government spending on infrastructure, social services and other important programs. A healthy oil sands industry results in higher revenues for governments".

This graph shows how much money Alberta makes off of oil sands and convectional oil on a annual basis.

While oil can benefit the economy, it can also affect it. In order to produce ne barrel of oil, it cost $30. 36% of that $30 is used to extract bitumen. 24% is used to transform bitumen to synthetic crude oil. And 40% is used for capital costs, taxes, rate of return, royalties, etc. Certain Extraction methods can be very costly as well. For example, fracking. In order to fracture just a few wells, it would cost up to $8 million to do so.

Instead of spending millions and millions of dollars for oil, the money could be used for a better purpose. On average about 200 000 people in Canada are homeless. In America, about 1.56 million people are homeless. Instead of using that money for oil, we could be building homeless shelters. We could donate the money to charities or to cancer research.

Although, we could use the money for a better cause, the oil insdustry helps pay our taxes which gives us free health care. With Canada being an ageing popluation, less and less people are working. In the future, no one will be working. Oil makes tons of money for Canada which allows us to still have free health care.


Oil has had a major impact on greenhouse gas emissions. 6.5% of greenhouse gases is created by oil sands. 70%-80% of greenhouse gases is caused by the burning of fossil fuels. In a lifespan, oil sands create about 5%-20% more emission than the average barrel of oil on a regular basis.

This graph shows the breakdwon of each economic sector and how much greehouse gas emmision they create in Canada since 2013. As you can see, the oil and gas industry creates the most emmision out of all the sectors. It creates 25% of emmisions. That's one quarter of all the greenhouse gas emmisions in Canada.

With the oil industry increasing greenhouse gas emissions, humans, the environment, and the economy become affect as well. Greenhouse gases lead to global warming making the ice caps melt. Once the ice caps melt, then sea levels will rise and come onto land. Since most people live near bodies of water, they will have to relocate. With only 30% of the Earth's surface being land and even then, only a small portion of that is habitable, where will people relocate? On top of that, even the smallest amount of water damage can cost un to a trillion dollars.


How Does Oil Affect our Water? How Does That Then Affect Humans, the Economy and the Environment?

Oil has caused many issues involving water and continues to do so. Earth is made up of 70% of water, but only 2% is freshwater. Even then, only 1% of that is accessible. Water scarcity already exist, but to make matters worse, in order to produce one barrel of oil, you would need 0.4 barrels of freshwater. 7% of Alberta's water supply is used for the Oil Sands. Back in 2009, 179 million m³ of water that was used for the Oil Sands mostly came from the Athabasca River and 0.5% of the river's flow was used.

The expraction of bitumen from the Oil Sands is one of the main causes of creating tailing ponds. It's a combination of water, clay, sand, and residual oil. Roming around in the tailing ponds are very fine rock, chemicals that were used to extract minerals and oil, and water. When various types of chemicals and pesticides contaminate the water, it is no longer drinkable.

Fracking is a extracting method to get oil and gas. Fracking utilises water pressure and steam to frature the Earth's crust to relise the oil and gases in pockets. The fracturing of the Earth's crust also allows the water and steam to contaiminate other vital area's within the Earth's crust such as water tables. To be able to fracture one well, it would take up 8 million gallons of water. In 2010, it had been estimated that the United States had used around 70-140 billion gallons of water to fracture almost 35 000 wells. The amount of water that is used for fracking is remarkable. Fracking leads to potentail oil spills which would then cotaminate our water.

When the oil industry creates water issues, that then affects us socially, environmentally, and economically. The more water that becomes contaminated, the less drinkable water we have. That creates a problem because all living species need water to survive. If we drink the contaminated water, then we are developing many diseases in our system. Also, if the water is polluted, then there is less water for agricultural purposes. That then reflects onto the economy because no crops means the framers no longer have a business. This results in them not earning any money. This would also affect the fishing industry because the fish are in the polluted water 24/7. The chemicals will end up in their system and they will get sick. If we eat the fish, those chemicals will then end up in our bodies as well. Thus causing that industry to not make any money. This leads to them not being able to pay their workers and them losing their jobs.


What Kind of Health Problems Does the Oil Industry Cause? How Does That Affect the Workers?

Regular contact with oil causes many health problems including:

  • blurred vision and other eye problems
  • headaches
  • convulsions and unusual deaths
  • nose bleeds
  • ear infections
  • respiratory diseases
  • lung and throat infections
  • increase in risk of TB (tuberculosis)
  • heart attacks
  • liver/kidney damage and bone marrow
  • menstrual problems
  • skin problems

People who are often around oil can start to develop cancer. Those who live close to oil refineries are more likely to develop cancer in their blood. For example, leukemia. People who live near areas where oil is drilled are more likey to receive stomach, bladder, or lung cancer. In addition, the workers themselves have a higher risk of developing lip, stomach, liver, pancreas, connective tissue, prostate, eye, brain, and blood cancer.

This graph shows the risk of each health issue related to oil and gas chemicals since 2010.

Oil has more of an effect on the worker's health because they are surrounded by it 24/7. Not only does this affect the workers themselves, but this would the reflect onto the economy. More health issues means less people will end up working in that industry. Less people working means less oil. Less oil means taxes won't be paid for. If our taxes can't be paid for, then we have no free healthcare. No free healthcare means the people and especially the workers who have developed a health issue can't be treated. This results in them dying and Canada's population decreases.


How Doe Oil Affect Climate Change? How Does the Melting of Ice Caps Affect Humans, the Economy and the Environment?

Many factors come into play when we are talking about global warming and climate change. Oil just happens to be one of the main causes to this world wide problem. The estimate for Earth's rate of temperature increase is currently half a degree. Except, the oil industry could possibly make that number go up. The burning of fossil fuels such as coal, oil, and gas, will create more greenhouses gases. On one hand, greenhouse gases are good for the Earth. It's what keeps our planet warm. Without greenhouse gases, we would be stuck in another ice age. The whole reason why the last ice age past was because the greenhouse gases melted the ice and plate tectonics sort of 'moved' the land so the water wouldn't be on top of the land. Although, too much of it would cause an enormous shift in the Earth's temperature. If there is an excessive amount of greenhouse gases, then the Earth will soon become over heated. Also, while it allows sunlight to travel through the atmosphere, it traps carbon dioxide in the process. If our carbon dioxide levels were to rise, then the ice caps will continue to melt causing the Earth's temperature to increase. In addition, ice reflects sunlight into space, but if the ice melts, the water would then absorb the heat which is another reason why ice caps are melting.

In the video above, it talks about what would happen if ice caps melted. While the melting of the ice caps can benefit certain shipping companies, it can also affect aquatic life. If the ice melts, then animals such as polar bears, walruses, and seals will no longer have their own habitats. Now, the melting of the ice caps can benefit the oil industry. Due to the circumstances, they see this as an opportunity to go further up north to search for more oil. To accomplish this, they use a method called seismic blasting. What this does is that it distributes air explosions into the water, mapping out the ocean floor and finding oil. Athough, this process effects the entire ecosystem. It causes "physical trauma and and habitat relocation of whales". If ice caps continue to melt, the sea levels will rise. Sea levels can rise up to at least 70 meters. Most people live near bodies of water. If sea levels rise, then all of those people will have to relocate. In order to repair even the smallest amount of water damage, it could cost up to a trillion dollars. Just a small rise of 2 ft could cost a trillion dollars worth of repair. "A rise of 10 meters would displace more than 630 million people, nearly 10% of the world popluation. At 25 meters, 1.4 billion people, roughly 20% of humanity is left homeless". A rise of 70 meters would result in most of the US seaboards, most of the West coast, all of Flordia, Bangladesh, and must of Northern China would become completely wiped out. Also a new inland sea would be formed in Australia. If this happened, Earth would definitely become more than 70% water.

As an end result of oil leading to climate change, humans will no longer exist.


What are Some Things That we can Change to Make the Oil Industry More Sustainable?

There are many improvements that have beeen made in the oil industry. For instance, they have slowly started to turn certain byproducts of the crude oil into other things, rather than just throwing it away. An example would be plastic. Oil creates tons of air pollution. To improve the air quality, the industry has been reducing the amount of pollution that has been created by oil. To do that, they have decreased the amount of waste product being burned. They have also changed they way they burn off waste products, resulting in less pollution. Way back before any of these inprovements have been made, people who lived near a refinery, would find black soot on their cars every morning. But these improvements have made the industry much more sustainable.


  • before 2003, only 0.76% (7 billion barrels) of world oil reserves were in Canada
  • after 2003, certain components of the oil sands became much easier to extract economically wise which then improved Canada's proven reserves to a minmum of 175 billion barrels
  • in 2009, 3.29 million barrels of oil would be produced each day in Canada
  • oil discoveries have been going down since 1964
  • back in the 1960s, just about 500 billion barrels of oil were found
  • in 2000, only 100 billion barrels of oil were found
  • only 0% of conventional oil, 30% of oil sands and bitumen, 25% of extra heavy oil, and 15% of heavy oil is still easy to access


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