Questions surround costs of oil sands cleanup
Canada’s oil sands companies have put away only a fraction of the money they will need to clean up their mess around Fort McMurray, creating a potential taxpayer liability of over $10-billion, according to a new report. Over the past 40 years, industry has contributed a total of $820-million to Alberta’s Environmental Protection Security Fund, which is required by the province to contain sufficient cash, bonds and letters of credit to “cover the cost of reclamation in case the operator is unable to complete reclamation on the site.” But a lengthy analysis by the Pembina Institute, a sustainable energy research and advocacy group, finds that it will cost far more to return north-eastern Alberta’s open pit mines and lakes of mine effluent to an “equivalent land capability,” the provincially-required standard for cleanup once extraction work has finished. Industry has an unfunded cleanup liability of $10 to $15-billion, equivalent to $4,300 to $6,300 per Alberta taxpayer, the group calculated. In total 686 square kilometres of land have been disturbed by mining, while mine effluent has been stored in lakes that now spread over 170 square kilometres. That number will grow to $17-billion to $33-billion by 2025 if current trends continue, the group estimates. Those figures do not include either the cost to reclaim plant sites or wetlands, said Nathan Lemphers, the lead author of the report, in an interview. “We’re requesting that the reclamation securities policies that Alberta has reflect the liabilities that are incurred on the ground,” Mr. Lemphers said. “It’s just making sure that there’s adequate safeguards in place. And there isn’t, from my research.” Industry has already reclaimed 65 square kilometres of land; much of the remainder is involved in active mine operations. Still, “underestimating the costs for cleanup could create a large environmental and financial debt for our children and grandchildren,” Pembina writes in a report entitled “Toxic Liability: How Albertans could end up paying for oil sands mine reclamation.” “Unless liabilities are explicitly identified, with current mines projected to last 30 to 50 years or more, we are passing current liabilities to future generations.” In the report, released Tuesday, Pembina warns that current liabilities could be borne not only by Albertans, but also by investors and the Canadians public. The report is the latest attack on the environmental record of the oil sands industry, which has been criticized for its high energy use and contributions to local pollution. Another recent study contradicted claims by government and companies that the oil sands have had no impact on pollution levels in the Athabasca River, while Environment Canada recently published data showing that companies dump arsenic, heavy metals and other toxins into their effluent tailings ponds each year. At the same time, however, oil sands companies have made great strides in speeding the cleanup of one of its most difficult challenges, a substance called “mature fine tailings.” The product of oil sands mining, mature fine tailings are extremely fine clay particles suspended inwater. The water cannot be released to the environment until the clay particles are removed, but in their natural state, those particles will remain suspended for decades. In the past year, both Suncor Energy Inc. and Royal Dutch Shell PLC have unveiled new technologies that allow that process to be sped up to weeks. Those technologies could substantially diminish the amount of effluent that needs to be cleaned up, a point made by Suncor chief executive Rick George in an interview last week. “I am extremely proud of our whole track record of continuous improvement on the environmental front,” he said, pointing to the mature fine tailings advances, which the company calls its TRO technology. “With our new TRO technology at Suncor, we’re reclaiming ponds at a rapid rate,” he said. The oil sands, he added, is “one of the most transforming industries in North America.” Suncor is flying dignitaries to its mine later this month to celebrate the reclamation of its first tailings pond. Industry also argues that its research into reclamation began in the 1960s and has produced thousands of research reports, theses and field sites. And although only 1.04 square kilometres has been provincially certified as reclaimed, gaining certification requires many years to prove that foliage and wildlife are successfully growing on former mine lands. Industry has actually reclaimed a total of 65 square kilometres, according to the Oil Sands Developers Group.
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- February 7, 2011 / 3:43 am