GLOBE-Net, February 15, 2011 - The current issue of the journal Policy Options contains a refreshing and balanced series of insights on Canada's energy policy, and in particular on the need to develop our oil sands resource in a more environmentally sustainable manner.  What is refreshing about these articles is the facts based articulation of Canada's role as an energy powerhouse and the realities of our associated responsibilities as stewards not only of our energy related natural resources, but also of the environment.

The oil sands have been Ground Zero for much vilification of Canada's continued development of our fossil fuel resources. But as noted by Bruce Carson, executive director of the Canada School of Energy and the Environment at the University of Alberta (and former policy adviser to Prime Minister Stephen Harper), all of Canada benefits from the oil sands and this will continue to be the case for many years to come.

Notes Carson, the oil sands account for 55 percent of Canada's crude oil production, and alone have generated over $70 billion for the Canadian economy (2007), twice that of the auto industry. With current oil sands reserves of 170 billion barrels and another 145 billion barrels that could be developed in the future, it is clear fossil fuels will continue to be a major component of our economic future.

But he adds, notwithstanding the importance of the oil sands as an economic driver for Canada, "The challenge is to strike a balance between energy and the environment: wildlife preservation, land and water use, and GHG emissions reduction."

The energy sector is a major economic driver for Canada. The oil sands alone currently contribute 112,000 jobs across Canada, and over the next 25 years are expected to contribute over 11 million person years of employment to Canada and $1.7 trillion to the Canadian economy - spread across the country 

Carson, as with the other contributors to this series of articles notes that the environmental impacts of oil sands development are obvious in everything from water use, air pollution, greenhouse gas emissions, etc., and cannot be minimized, although they are  not as severe as has often been portrayed by some environmentalists.

Todd Hirsch, a Calgary-based economist for ATB Financial echoes this point in his article about separating fact from fiction when it comes to the oil snads. He notes that even when taken as a group of projects in their entirety, all of the oil sands mines in Alberta do not emit as much carbon as the coal-fuelled electrical facilities in at least half a dozen US states. Overall, the coal-fired US energy industry is responsible for 64 times as much GHG emissions as the Canadian oil sands, he writes.

That fact does not excuse any of the environmental issues surrounding the oil sands, but it does highlight the need for balanced monitoring and reporting of the facts, a point made clear in the December 2010 report of the Royal Society of Canada Expert Panel that blasted both the Alberta and federal governments for not providing sufficient monitoring and regulatory capacity to ensure the oil sands are being developed in a sustainable manner. 

That point about monitoring was further hammered home by the report of an expert panel appointed by former federal environment minister Jim Prentice in response to revelations by University of Alberta professor Dr. David Schindler that water quality in the Athabasca River was being seriously degraded by the cumulative impacts of oil sands development. 

Both the Alberta and federal governments have put into motion steps to improve environmental oversight in order to build decent and credible monitoring and reporting systems, not just for water use and possible contamination, but for all oil sands activities. Furthermore, both governments have committed to make monitoring data publicly accessible.

No one understands better the need to improve the environmental track record of oil sands activities than the key players in the oil patch. For the past year, the Canadian Association of Petroleum Producers (CAPP) has engaged in a costly public relations effort to promote the image of responsible environmental stewardship by its member companies. 

But as noted in an earlier GLOBE-Net article, as the anti-oil sands rhetoric increased, many people (particularly outside Alberta) dismissed oil industry reports (and the associated advertisements) of technological breakthroughs that would lessen the environmental impacts of oil sands development or which would speed up tailings pond reclamation, as nothing more than industry hype. (See GLOBE-net article "Oil and Water Don't Mix - But Can They Co-Exist. A GLOBE-Net Editorial"   

But in fact real progress is being made on the ground. In December Canadian Natural Resources, Imperial Oil, Shell Canada, Suncor Energy, Syncrude Canada Ltd., Teck Resources and Total E&P Canada announced they would collaborate and share research and development efforts relating to oil sands tailings management.

"The issue is not whether we can manage tailings - the issue is whether we can do it better," said John Broadhurst, Vice President of Shell's Oil Sands Development.  "We believe that this relationship is a key step towards tailings solutions that will allow us to accelerate the pace of reclamation using the most advanced environmental measures," he said about the industry pact.

Each company pledged to share existing tailings research and technology and to remove barriers to future collaboration on tailings R&D.  These huge tailings ponds, which have drawn the ire of environmentalists around the world, stand as the signature focal point of condemnation of Canada's environmental performance.

Both Suncor and Syncrude Canada have made impressive gains in their tailings management research efforts. In Syncrude's case accelerating the settling process of residual bitumen fines through the use of centrifuge technology and water capping - i.e. creating fresh water lakes atop tailings. Construction of a commercial scale centrifuge demonstration project will get underway next year, as will the first commissioned water capping project.

Last June Suncor Energy received approval for its tailings management plan from the Energy Resources Conservation Board (ERCB) which involves a new approach to tailings management called TRO_{TM. }The company expects to invest more than $1 billion to implement this technology over the next two years, potentially reducing tailings reclamation time by decades and speeding up the return of oil sands mining sites to natural habitats.

In September Suncor  became the first oil sands company to complete surface reclamation of a tailings pond, a key step in returning the site back to nature. 

But despite these gains, images of dead ducks killed after inadvertently landing on toxic tailings ponds proved a public relations nightmare and an expensive lesson for oil sands companies, all of which have stepped up their bird and wildlife management efforts and are taking precautions to avoid repeat incidents.

"There is no doubt all of us have to improve our game in terms of environmental performance", said Mark Kruger, a public affairs advisor for Syncrude Canada in an interview with GLOBE-Net.

"This does not mean we haven't made significant progress," he notes, "but we have to continue to develop and improve our technologies to reduce or eliminate any adverse environmental impacts."

Other gains have been made in lowering the volumes of water used in the oil sands extraction process, researching the provision of wildlife corridors, lowering air pollution, and increasing the use of recycled water. Syncrude is building the industry's first reclaimed fen wetland and is partnering with four universities on a $3.8 million project to understand how to reclaim wetlands better and more quickly.

Significant gains have also been made to lower the intensity of greenhouse case emissions per barrel of oil produced. In Syncrude's case reductions of greenhouse gas emissions per barrel by 14 per cent were achieved through new technologies that lowered energy use in the extraction process. Other oil sands players have reported similar gains.

It would be an understatement to say that, along with the economic discussion, a great deal of attention is being paid to the oil sands development's environmental impact.  The emission of pollutants and GHGs, tailings ponds, biodiversity, water quality and use, land disturbance and the boreal forest - virtually everything about oil sands development has an environmental dimension. These issues range from the local and regional to the international. Bruce Carson, executive director  Canada School of Energy and the Environment

But the issue facing policy makers and industry players alike is not simply reducing the environmental costs of oil sands exploitation, it is about moving beyond the political gridlock of environmental rules versus economic benefits, or the one dimensional debate of reducing greenhouse gas emissions, to see how emerging global energy and climate change policies will affect Canada's competitiveness over the next 10 to 40 years notes  Velma McColl, principal of the Earnscliffe Strategy Group in Ottawa.

"The Canadian debate on energy and climate has become myopic, placing undue attention on the oil sands as the only litmus test for progress," she notes.  The oil sands will be developed, she adds, and industry understands this acutely and is responding to improve their environmental performance and resource efficiency, not only to compete but also to regain public confidence. 

There is a bigger game afoot, notes McColl, one that involves making the investments necessary for Canada to compete in the low-carbon future against countries like China, the United States, Britain and Korea that are outspending us multiple times over to develop green technologies that we may someday end up buying. 

The abundance of our energy resources will not guarantee our future competitiveness according to McColl and other writers in this series.   But the prudent management of this wealth poses an opportunity to strengthen our manufacturing capabilities and to develop and deploy the clean technologies that not only will benefit us at home, but also will position us to better compete in world markets that will be forever changed by climate-related disruptions in agriculture, accelerated deforestation, higher food prices and dwindling access to clean water.

From the vantage of the business community, Linda Hasenfratz and Hal Kvisle, respectively CEO of Linamar Corporation and former CEO of the TransCanada Corporation, also make the case that Canada "needs a focused national strategy" so that it can "achieve its potential as an energy and environmental powerhouse."

"Governments at all levels must provide clear and consistent signals to the private sector so industry can get on with the job of developing advanced energy systems, cleaner technologies and high-quality jobs," they note.

Such a national energy strategy is sorely lacking, notes David Emerson, former industry and trade minister and chair of the Energy Policy Institute of Canada. Notes Emerson, while Canada has an abundance of energy resources, he states, what we lack most is an energy strategy that is also environmentally sustainable. 

As noted by Policy Options Editor  L. Ian MacDonald, taken together, these articles reflect a shifting debate in this country, led largely by a diverse set of voices outside government. 

As has been noted often in GLOBE-Net, it is this type of informed dialogue that will lead to a better understanding of both the imperatives of environmental protection and the importance of sustainable economic growth. In the case of the oil sands, the issues are simply too important to be sidelined by breakdowns in communications.

John D. Wiebe

President and CEO