Refine Where You Mine
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2014-08
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Abstract
The province of Alberta, home of the Canadian oil sands, contains the third largest
known oil reserves on the globe. Extraction of bitumen from the oil sands is a key reason for the
growth of Alberta’s economy. A major public debate within the province is whether Albertans
can realize even greater value from this resource by increasing the amount of bitumen
processed in the province via upgrading and refining.
This report investigates the major arguments in the debate over whether or not more
domestic bitumen processing would benefit the province, with the goal of determining whether
or not the government should be involved. It finds the arguments in favour of increasing the
amount of local upgrading are based largely in philosophical arguments that jobs and
government revenue will increase, without offering a proven economic basis to back the
argument. Arguments cautioning against investments into increasing local upgrading and
refining capacity point to the current and future market and economic conditions that are
causing great uncertainty about the ability to gain a return on this type of investment. A thorough examination of stakeholder positions, industry actions, and case studies of
bitumen upgrading and refining projects in Alberta and British Columbia suggests there is no
apparent reason increasing bitumen processing within provincial borders will make Albertans
better off. In addition, current government of Alberta policy on this file is spending government
revenue and placing taxpayers at further financial risk. Based on my analysis, this report offers
alternative policy options for the provincial government around bitumen processing in Alberta.
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Citation
Christensen, Naomi. (2014). Refine Where You Mine ( Master's thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.