Big Oil is Listening 

Big Oil is Listening

The Edmonton Journal (Dave Collyer - editorial) Wed 14 Jan 2009

Last Friday, January 9, 2009, The Journal covered the oilsands industry's launch of the second phase of a program we began last June to better understand Canadians' concerns about the oilsands.

Industry representatives announced what we'd heard from Canadians so far through a website discussion forum at www.canadasoilsands.com, and also through some targeted polling that we did last June.

A letter to the editor in Monday's Journal, headlined "Distrust of oilsands industry is not a communications problem," summarizes a common criticism of last week's announcement. As the writer states, "This is not about communications. This is about actually doing something."

I maintain that, in fact, it's about both. More talk and more action.

We acknowledged last week that we don't have the trust of Canadians, and that Canadians don't think we're doing a good enough job of protecting the environment while developing the oilsands.

I believe that the industry needs to communicate some of the innovative things that it's doing already more effectively, but also needs to push technology further to reduce the environmental footprint of oilsands development.

I'll look at water as one example, because Albertans in particular have told us they are concerned about the impact of the oilsands on freshwater resources. As one participant memorably states on the program website, "We can survive without the oil. No one can live without fresh water."

As is the case on many oilsands environmental issues, we have made significant progress in reducing the impact of the industry on water resources, yet there is clearly more to do.

The two water-related issues that concern people most are the impact of oilsands operations on river flow and the effect of tailings ponds on the environment.

RIVER FLOW

Let's look first at the issue of river flow. Oilsands mining operations use fresh water from the Athabasca River. The Alberta government's Water Management Framework allocates less than three per cent of the Athabasca River's average annual flow to the oilsands industry, and the industry today uses less than that. Even with production growth projections, the Athabasca will remain one of the least-used river basins in Alberta.

However, website participants question these statistics. As one person writes, "You conveniently avoid stating that the Athabasca has highly seasonal flows, so during late winter I think oilsands are projected to take 20 per cent of flows."

Water flow on the Athabasca is indeed much lower in the winter than in the summer. The maximum allowed oilsands withdrawal, in fact, amounts to about five per cent of the average winter flow level.

TAILINGS PONDS

Also related to water, we have heard a lot of concern about the use of tailings ponds in oilsands mining operations. The ponds contain a mix of water, clay, sand and residual bitumen that are left over from the extraction of bitumen from the sand. Water in the tailings ponds is recycled many times, so these other compounds become more concentrated over time.

Public awareness of the tailings ponds jumped this past spring when a flock of migrating ducks was killed when the ducks landed on a pond.

"Tailings ponds are being created at much greater rates than they could possibly be reclaimed given today's technology," comments a forum participant. "The regulators are putting way too much blind faith in the power of technology and have unreasonably high expectations of future technology."

Tailings ponds are, in fact, tightly regulated by Alberta Environment and the Alberta Energy Resources Conservation Board. They are equipped with technology to monitor, intercept and return any seepage back into the pond.

Tailings water is not released to the river, and ongoing sampling of water bodies near tailings ponds has shown no change in naturally occurring compounds (it's worth noting that the Athabasca River has always had traces of oil and related compounds in the water, because bitumen seeps into the river from oil sand exposed naturally in the river banks).

LAND RECLAMATION

With regard to the eventual cleanup, government regulations are clear. Oilsands producers are required to return the land to productivity equal or greater to that prior to oilsands development, and they are required to set money aside to pay for that reclamation.

The time frames for reclamation are indeed long, as they are in any mining or quarry operation. Reclamation starts about 15 years into a project, and takes 30 years or more to complete, which is essentially the project life cycle. At the moment, 6,500 hectares are undergoing active reclamation, and Syncrude received the first reclamation certificate from government just last year. The first tailings pond to be reclaimed is Suncor's Pond 1, scheduled to be fully reclaimed by 2010.

Some companies today are using new technologies that permit smaller tailings ponds and less water use. At Shell Canada's Albian Sands project, tailings thickeners are used to recapture water from fine tailings before they are released into the pond. At Canadian Natural Resources Limited's Horizon project, CO₂ is used to solidify tailings -- a process that also traps and stores the carbon. These and other promising technologies will use less fresh water and reduce the impact of the tailing ponds in future.

Tailings ponds exist only in oilsands mining operations. The bulk of the oilsands resource cannot be recovered by mining, because it is buried too deep underground. In situ oilsands operations drill into the reservoir using wells that look similar to conventional oil production. In situ operators use water to make steam to inject into the reservoir, heating the oil in the sand and enabling it to flow to the surface through a well.

The industry is making good progress in reducing the amount of fresh water used for the steam injection. From 2001 to 2005, the amount of fresh water used for in situ oilsands projects declined, while the use of brackish, unpotable water from deep aquifers almost doubled.

We have greatly improved water treatment and recycling technology in recent years, so that we now recycle more than 80 per cent of the water used in oilsands mining operations, and more than 90 per cent in in situ operations.

Yet Canadians are telling us that, even in light of this progress, the amount of fresh water still needed to produce a barrel of oil -- an average of just over two barrels of fresh water for each barrel of oil across all operations -- is still too high.

While we have made progress on water issues, we recognize we need to do more.

The input we receive from Canadians at www.canadasoilsands.com and from other sources is vital in helping us monitor how the public is responding to our efforts and in providing the industry with guidance in terms of evolving solutions.

So it's not just a communications exercise, but communications is important to ensuring we succeed in developing this tremendous Canadian resource in a manner that can be a source of pride to Albertans.

David Collyer, former president of Shell Canada, is president of the Calgary-based Canadian Association of Petroleum Producers

This article appears in the January 14, 2009 Edmonton Journal