Tar Sand impacts posing 'financial risk' to Alberta, says PCO

Mike DeSouza
PostMedia News
Date published: 
Mon, 2012-02-20

OTTAWA — Collateral damage from Canada's booming oilsands sector may be irreversible, posing a "significant environmental and financial risk to the province of Alberta," says a secret memorandum prepared for the federal government's top bureaucrat.

The memorandum, released by the Privy Council Office through access to information legislation, also raises doubts about recent industry and government claims that oilsands companies are reducing heat-trapping gases produced by each barrel of oil.

The industry has suggested a shift in oilsands extraction to use steam to remove synthetic crude oil from natural bitumen deposits on site can reduce land disruption and provide for reductions in energy and emissions. But the memo, prepared for Wayne Wouters, the clerk of the Privy Council Office — the lead department in the federal government's bureaucracy — said this shift is actually accelerating the industry's impact on climate change, with emissions growth projected to be greater over the next decade than all other Canadian economic sectors combined.

"While the industry has taken steps to reduce emissions, the shift from mining to in-situ production, which is almost three times as emissions intensive as mining, is resulting in a continued acceleration of emissions from this sector," said the memo.

"The industry's approach to tailings, meanwhile, has been widely criticized, including in a recent Royal Society of Canada report, as representing a significant environmental and financial risk to the province of Alberta."

The memo, marked "secret," was prepared for Wouters in advance of a round table discussion that was to be held on March 10, 2011 with representatives from energy companies Suncor, CNRL, Encana, as well as academic stakeholders. It suggested the so-called tailings ponds of toxic waste from oilsands mining could cause permanent damage to Alberta's landscape.

"While the industry has taken steps to recycle water and collaborate on the development of innovative tailings management technologies, at this point in time, it is far from clear that tailings ponds can be adequately restored," said the memo, obtained by Ottawa researcher Ken Rubin. "Other environmental issues, such as the loss of wetlands and habitat, also exist and pose a risk to the ecological integrity of the oilsands region. At present the cumulative impacts of oilsands development are not adequately understood."

Environmental groups have also recently challenged a government plan to protect threatened woodland caribou populations by slaughtering wolves.

The memo was released with other internal correspondence about the energy sector, including a memorandum prepared for Prime Minister Stephen Harper that was signed by Wouters, warning that the European Union is "moving forward" with plans to "single out the oilsands" in climate change legislation designed to reduce emissions from the continent's transportation sector.

The memo to Harper cited research by Cambridge Energy Research Associates to support its claims that proposed European legislation discriminates against oilsands-derived crude oil, when compared with other sources of oil. Major portions of the released version of the memo to Harper were blacked out, so it is not clear whether it also highlighted criticism about the CERA research, for not fully incorporating emissions from land-use changes or unintentional emissions from the production process into its calculations.

The released version of the memo to Harper also does not include references to a peer-reviewed study on oilsands greenhouse gas emissions conducted at Stanford University in California that was used to support the European Union's proposed legislation.

The Privy Council Office was not immediately able to comment.

The industry has reduced its emissions per barrel by about 30 per cent since 1990, but its total emissions have increased by about 200 per cent in that same period due to expanded production, according to the most recent federal data. Oilsands operations are also producing more annual carbon dioxide pollution than all of the cars on Canadian roads, and almost as much annual pollution as all of the light-duty trucks, according to the same data.

The oil-and-gas industry has stressed that new technologies are allowing some operations to dramatically improve performance when compared to the first few decades of industrial activity in the oilsands, commonly associated with major land disruption as well as heavy consumption of water and energy.

For example, Calgary-based Cenovus Energy Inc. has said three of its operations use less steam than its competitors and, as a result, offer an environmental performance that would meet stringent climate-change standards for fuel in the state of California.

Canada's oilsands sector produces an estimated 1.5 million barrels of oil today. The Canadian Energy Research Institute, a collaboration among industry, government and academics, estimates that the sector is responsible for more than 100,000 direct and indirect jobs in Canada, and will contribute more than $1.7 trillion to the country's economy over the next 25 years.

The memo to Wouters noted the oilsands sector extracted six billion barrels in its first 40 years of commercial production, from 1967 to 2007, while it is expected to match that total production in the coming decade. It said this rapid growth "has shed light on the significant environmental challenges associated with this economically important sector," including the greenhouse gas emissions, tailings management, and habitat degradation and loss.

"The oilsands are the fastest-growing source of GHG emissions in Canada," said the memo to Wouters. "According to Environment Canada's emissions trends, emissions from the oil-and-gas sector could increase by 30 per cent between 2005 and 2020, driven by a more than 200 per cent increase in emissions from the oilsand sectors. By 2020, oilsands GHG emissions could total 92 million tonnes a year, up from about 31 in 2005. This increase of 61 million tonnes is greater than the projected emissions growth for all other sectors combined."


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