Fiscally secure

Contributed to The Calgary Herald
Greg Stringham
Vice President of Oil Sands
Canadian Association of Petroleum Producers
October 26, 2012

Re: "Ethical investors say oilsands industry must cut environmental risks," Oct. 21, 2012.

Your article incorrectly implies Alberta's auditor general is critical of the Alberta government's Mine Financial Security Program (MFSP). In fact, the auditor's recommendation was based on the program in place prior to changes made by the Alberta government, announced last year.

Under the MFSP, reclamation of every oilsands mine in Alberta is financially secured. The program's asset-to-liability approach requires mines to have assets at least three times greater than the liability and a plan for reclamation that is updated regularly with the government.

A base-level financial security deposit is required for existing and new oil-sands mining projects. In addition, an operating life deposit is required when there are less than 15 years of reserves left on a particular project, so that all abandonment, remediation and surface reclamation costs are fully financially secured by the time there are less than six years of reserves left. These deposits are complemented by oilsands mine resource assets, which are valued in the hundreds of billions of dollars.

This combination of cash and asset elements work together to provide a solid "reclamation insurance" program that protects taxpayers. The oil and gas industry is focused on responsible development of Canada's resources. We believe in transparency.