By Joshua Bondy - September 10, 2012 | Tickers: CVX, XOM, MRO, RDS-A | 0 Comments

Joshua is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.

Royal Dutch Shell (NYSE: RDS-A)with its' partnersMarathon Oil(NYSE: MRO)andChevron (NYSE: CVX)recently announcedthe construction of a major carbon capture and storage project in Alberta, Canada.The facility will be used to remove more than 1 million tonnes of C02 per year from an upgrader facility.The Alberta oil sands will become one of the biggest domestic supplies of crude oil in North America. This large resource base is commonly criticized for its' damage to the environment. Among other factors it produces a large amount of CO2. One of the objections to the Keystone XL pipeline by environmentalists was the amount of C02 produced by the oil sands. As opposed to regular oil wells the extraction process for the oil sands is much more energy intensive. Traditional oil sands production requires that a layer of top soil be removed and then large amounts of oily sand are transported for processing. The Athabasca Oil sands are still a major part of the America's energy mix. They produce 1.3 million barrels of oil per day and there are plans to significantly increase production.

The development of this carbon capture project is important for the long term development of the oil sands. With global warming becoming evident throughout the globe nations are slowly starting to work towards reducing climate change. With the oil sands labeled as one of the worst energy sources on a pollution basis there is a risk that fines or extra surcharges could be placed upon its' oil. These challenges come in addition to lower prices which heavy oil receives. The development of this carbon capture project is more than just a fancy PR play but a significant investment which will help to ensure the acceptance of the oil sands within the public psyche.

ExxonMobil Corp (NYSE: XOM) is another company which is developing environmentally sound solutions in the oil sands. They have decided to focus on reducing the number of steps necessary in the production process. By using paraffinic froth treatment they will be able to remove the need for an upgrader facility. By cutting out this part of the production process they will be able to reduce not only C02 emissions but also general energy use. C02 emissions may be the most popular metric used to judge the degree of environmental population but the overall energy intensity is also important.

The EU has alreadyconsidered banning crude oildeveloped from the oil sands. The Canadian government, Alberta government, and private corporations need to take environmental concerns serious if they wish to ensure the long term development of the oil sands. The Canadian Oil sands have one of the largest amounts of proven reserves in the world. This resource is not a small side project which aims to produces a few thousand barrels per day but a significant part of the world's energy portfolio. The expected oil sands production is expected to be around 3.5 million barrels per day by 2020. Through new technologies Exxon, Shell, Chevron, and others are ensuring that the oil sands will remain socially and environmentally acceptable. These recent develop should encourage investors that the Canadian oil sands are a sustainable long term investment and are taking concrete steps to overcome environmentally based objections.

Joshua Bondy is a member of The Motley Fool Blog Network

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The Alberta Oil Sands Continue to Grow with Carbon Capture Technology