The Alberta Oil Sands and the Canadian Mayor System

Canadian Politics
Student’s Name
Institutional Affiliation
Canadian Politics
The Alberta Oil Sands
It has been boisterous of a century since the remarkable discovery of oil deposits in Turner Valley signaled the emergent of the petroleum industry in the western part of Canada. The 100 years of oil mining and trading has experienced its own high and lows. In that case, the debate on whether the Alberta oils are a boon or a bane for the Canadian economy keeps looming as it is perceived that natural resources come with both blessings and curses. The Canada oil fields, which is largely located in Alberta’s oils sands, ranks as the second-largest oil reserve to Saudi Arabia’s. According to Alberta Energy and Utilities Board, the oil sands is estimated to contain approximately 1.7 trillion barrels of crude bitumen, whereby about 20% of the bitumen deposit are recoverable. Such massive oil reserves are perceived as either a blessing or a curse in disguise. However, many nations with abundant natural resources have in fact experienced economic difficulties.
Alberta province, Canada at large, and the neighboring nations like the US have reaped in the increased economic activity and job growth from the oil business. The economic impacts also come with numerous social benefits in forms of programs rolled out across the country funded with government revenue levied from oil and gas production. In other words, the benefits accrued from Alberta’s oil patch has helped to shape the social-political and economy of Alberta and Canada as a whole by transforming the country into a major oil producer across the world. Smilarly, th negative impacts of Alberta's oil fields affects the social-economic, environmental factors in the country. In spite of numerous benefits, still, the disadvantages of the oil outweigh the advantages and therefore confirming that Alberta’s oil patch is more of a curse than a blessing. Therefore the paper focuses on the negative impacts brought by the occurrence of oil deposits in Canada.
The oil business has adversely affected the Canadian economy epecailly the status of the currency and local industries, and labor markets. The phenomena whereby the local currency become too strong as a result of large exports is called the “Dutch Disease” (Drach, 2013).The Dutch Disease negatively affects the performance of a local manufacturing due to adverse exchange rate effects. Unfavorable exchange rates trigger an effect whereby the strong foreign currencies like the pounds and US dollar become relatively stronger than the Canadian dollar, and therefore causing unhealthy international competition and high costs of inputs to the local manufacturers (Drach, 2013). The oil deposit has encouraged massive foreign direct investment in the Canadian small economy. As a result, the excessive inward inflow of capital exerts upward pressure on domestic currency thus making the local exporters lose their competitive advantage as the prices of their goods and services relatively increases abroad (Drach, 2013). In addition, the high inflow of oil money might trigger excess demand on products and services in the domestic market. Prices of factors of production such as labor and land heighten, and therefore rendering some sectors of the economy unable to withstand the escalating production costs (Drach, 2013).
Another economic disproportion brought by the Dutch Disease is the spillover-loss effect. Sectors such as manufacturing are victims of positive externalities. Spillover-loss refers to the growth and development of new technologies, innovations, and innovativeness (Drach, 2013). The spill-over effect occurs when their excess positive externality such as extraordinary dynamism in the technological know-how and new innovative practices from large foreign companies thus forcing the local manufacturers to adapt and become equally competitive (Drach, 2013). As a result, cost of production increases since many enterprises in the Canadian economy will be forced to invest in new technologies and formulas to remain competitive and relevant in the market. On the other hand, the resource has affected by fewer positive externalities in the entire economy.
Morever, negative externalities also affect the progress of an economy. The Canadian labor market, for example, has been suffering from the continuous growth of the job-killing technologies (Watkin, 2007). Companies have turned from labor intensive to capital intensive approach of labor whereby all human workforce is replaced with robots and machines to increase productivity and efficiency. This has been the reason behind frequent unemployment crisis in Canada. On the other hand, the business sectors continue to flourish from the technological-oriented market designed by its society and educational attainment of its Citizens, while the country continues to linger behind with no effective employment policies over the years.
Social impacts is another negative externality that affects the Canadians, especially the North Alberta residents. The community around the oil sands is struggling to keep with the pace of growth and development around the region. For instance, urban centers such as Cold Lake and McMurray are characterized by skyrocketing housing costs, hence making it unaffordable for many individuals (Watkin, 2007). In addition, physical infrastructure, water, and sewage systems are severely overtaxed, causing the community to record massive infrastructure deficits (Watkin, 2007). Similarly, social amenities such as security, healthcare, and education are expensive and insufficient to meet the increasing demand of population pressures. The residents of northern Alberta are unfairly absorbing an unreasonably excess amount of the negative impacts of oil fields without earning their fair share of benefits. In spite numerous promises from the Alberta authority to address the widening gaps in social services and infrastructure, little has been implemented.
The oil sands inexorably pose environmental issues that affect the atmosphere and the ecosystem. In the region. First, the oil excavation uses a lot of water. For instance, it requires approximately 4.5 barrels of water, which are sourced from the Athabasca River to produce a single barrel of oil (Watkin, 2007). Although, much of the water is recycled and reused several times, still the oil fields consume a large amount of water per year compared to the whole city of Calgary (Watkin, 2007). The bone of contention concerning water is the difficulty of developing a correct balance on how water is proportionally used in the oil sands, human needs, and in the flow of the ecosystem around Alberta. Another environmental concern of the oil sands is its impact on greenhouse gases and climate change. Alberta oil sands account for approximately one-third of the country greenhouse gas emissions that contaminate the atmosphere.
Canada has continued to receive criticism from the crosshairs of global environmental activists who complain about the role of fossil fuels in global warming. The rigorous mining at the oil sands triggers huge disturbances of Alberta ecosystem, particularly the Northern Boreal Forest (Watkin, 2007). The forest is subjected to deforestation, habitat destruction, loss of endangered flora and fauna species, and horrid and open mine pits. For example, the issue of habitat destruction resulted in deaths of hundreds of migrating ducks in the Syncrude tailing ponds, spurring critics from citizens and widespread media attention (Watkin, 2007). Ecologists and environmentalists fear that dry tree plantations planted as a reclaiming strategy to overhaul the ugly oil site will gradually replace the natural ec...