Oilsands cleanup may not be adequately funded: Alberta AG - Macleans.ca

Oilsands cleanup may not be adequately funded: Alberta AG

Alberta’s environment minister said the government agreed with concerns that oilsands companies aren’t socking away enough money for cleanup


EDMONTON – Alberta’s auditor general says the province may not be requiring oilsands companies to save enough money to ensure their gigantic mines are cleaned up at the end of their life.

“If there isn’t an adequate program in place to ensure that financial security is provided by mine operators … mine sites may either not be reclaimed as intended or Albertans could be forced to pay the reclamation costs,” says a report released Monday by Merwan Saher.

Saher says current rules could allow companies to overestimate the value of their resources. That allows them to delay increases to the amount of money they sock away to fund cleanup.

As well, Saher says the government hasn’t met its own targets when it comes to ensuring each operator is assessed a large enough amount to pay for reclamation. Only about one-quarter of the audits promised in 2011 have been completed.

“The level of verification activity has been insufficient,” says the report.

Alberta Environment Minister Shannon Phillips said the government agreed with Saher’s concerns and accepts his recommendations.

The Mine Financial Security Program was instituted in 2011 and currently holds security deposits from eight oilsands mines and 19 coal mines. The fund holds $1.6 billion to cover about $21 billion in eventual liabilities.

The program allows companies to keep remediation funds low until the mine has less than 15 years of life left, or until the company has less than three times as many assets as liabilities.

But current rules can help companies inflate the asset side of that equation. Saher also noted the rules don’t take into account long-term price swings such as the current downturn.

“The department has accepted the risk of not protecting against the risk of a broad based and rapid structural decline in the oilsands sector,” the report says.

Saher told reporters any risk to Alberta taxpayers is long-term.

“We’re not concerned at this moment,” he said. “We just want to be sure that down the road, Albertans aren’t exposed to having to fork out sums that could have been identified by better calculations along the way.”

Saher also says there aren’t enough checks on how the base security deposit companies must put up is set.

Current rules allow companies to calculate their own cleanup liabilities, subject to government audit. Saher points out that while Alberta had promised eight such top-level audits by this time, only two have been conducted.

“There is presently no evidence that the level of audit activity is commensurate with the risks that exist,” the report says.

Phillips agreed the program needs a review.

“We need to analyze whether the asset calculation needs to be changed. We need to update this security program and conduct that detailed risk analysis.”

She promised the review would be conducted with the energy industry’s current low-price environment in mind.

Saher’s report also criticizes the government’s handling of Crown grazing leases, which it says allows ranchers to collect compensation payments from industry for damage to land they don’t own.

Examining about 10 per cent of the province’s leases showed leaseholders had received about $2.7 million more in compensation from energy companies than they had paid to lease the land. Saher also points out those lease rates haven’t changed since 1994.

The report criticizes the management of Alberta’s Specified Gas Emitters Regulation, the rules under which the province’s carbon pricing system works. The report said there’s still no mechanism to ensure purchased carbon offsets actually reduce emissions.

It also says the province has failed to adequately implement its mental health strategy. Saher said there is still no action plan to integrate mental health care into overall patient care.

Alberta Health Services President Vicki Kaminski said the issue is important and promised improvement.

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Oilsands cleanup may not be adequately funded: Alberta AG

  1. There won’t be any ‘clean-up’…..ever.

    The American oil companies will be gandi

    Our govt….Canadian taxpayers…will have to pay for it.

  2. Reclamation planning begins during the first phase of project design, and a reclamation plan covering the life of the project is required prior to project approval. Oil sands producers perform reclamation on an ongoing basis as operations are completed in a given area. This practice is called progressive reclamation, and the objective is to return the land to equivalent capability as soon as possible.
    From the start of any development, producers strive to reduce their impact by avoiding sensitive habitats, minimizing the area needed for well sites and working with other users to share roads and pipelines.

    Given the relatively early stages of oil sand operations at present – a typical oil sands mine has a 25- to 50-year lifespan and an in situ operation runs for 10 to 15 years on average – much of the industry’s reclamation activity is still in the early stages of development. Companies are evolving their operations and the technology used to reduce their footprints and continue pursuing ways to minimize their impact on the land.

    In situ drilling
    When an in situ well is no longer productive, it is decommissioned and the land is returned to a sustainable landscape (reclaimed). It takes about six years to fully reclaim the land – from capping the well and removing equipment to cleaning up any contaminants, replacing soil and replanting vegetation. The process includes monitoring, seeding, fertilizing, tree planting, seed collecting, topsoil salvaging and replacing, and landform creation and contouring.

    A government reclamation certificate is issued when the work meets landowner approval and regulated requirements.

    Open-pit mining
    For oil sands mines, once an area is no longer needed for mining activities, the operator contours it for drainage, replaces topsoil, and plants vegetation, trees and shrubs. Soil and vegetation are assessed on an ongoing basis. Remediation of tailings ponds (pits that contain a mixture of water, clay, sand and residual bitumen) is also an important part of the oil sands reclamation process.

    In March 2008, Syncrude’s Gateway Hill was certified by the Government of Alberta as fully reclaimed.

    • That’s lovely. It’s also tripe.

      • While the oil sands underlie a 142,200 km2 area in north and eastern Alberta, the surface mining area is limited to a 4,800 km2 region near Fort McMurray — 767 km2 of which has been disturbed by oil sands mining (~0.2 per cent of Alberta’s boreal forest)

        About 77mk2 is under active reclamation.
        Industry has planted more than 12 million tree seedlings towards reclamation efforts.

        80 per cent of the oil sands are accessible by in situ methods only (bitumen is separated from the sand underground and pumped to the surface).

        In situ’s land disturbance is 10 to 15 per cent of a similar sized mining operation and produces no tailings ponds.

        • And the Americans won’t be cleaning any of it up.

    • Nice cut & paste work, Bob!
      But somehow you missed the fact that that reclaimed land constitutes a total of 1 square kilometer, while the area disturbed is more than 700 km square.

      • Really clam, how absolutely fascinating.

        You do realize that land reclamation occurs when surface disturbance/mining operations have been completed?

        Math is hard for clams.

        • Go ahead and give us the math, Bob. Mining has been happening for almost 50 years.

          • At a production rate of 3 million barrels per day the oil sands reserves have a life of about 180 more years.

            Most current operations are nowhere near the point of proceeding with major reclamation work. Some has been done to date, that will increase as time goes on.

            Math is hard for clams.

          • Certified Reclaimed – 104 hectares
            If an area meets stringent requirements for reclamation, regulators will issue final certification and the land is returned to the Crown as public land. To date, one area called Gateway Hill is certified reclaimed.

            Permanent Reclaimed – 5,042 hectares
            Landform design, soil placement, and revegetation are complete (for both land and aquatic ecosystems). Companies must use local plant species to target the return of local boreal forest ecosystems. Soils are tested and tree and shrub growth is monitored for 15+ years. When ecological trends are achieved, the company can apply for reclamation certification.

            Temporary Reclaimed – 1,227 hectares
            Some areas are reclaimed and revegetated to grasses for the purposes of stabilization and erosion control. These areas may also see future distrubance.

            Soils Placed – 1,447 hectares
            Soils have been placed as directed by each facility’s reclamation and soil placement plans, as approved by regulators.

            Ready for Reclamation – 372 hectares
            Areas that are no longer required for mine or plant purposes and are therefore available for eclamation. Reclamation activites have not begun.

            Disturbed – 55,902 hectares
            Land is still part of the active operations of a facility.

          • So 1 sq km has been certified as reclaimed.
            And even the industry’s own numbers show 100 sq km no longer being mined.

          • 100 hectares = 1 Km2

            Math is hard for clams.

          • Bravo Bob!
            It is hard, but you’re doing very well!
            100 hectares is indeed 1 sq km, the amount of reclaimed tarsands land that’s been certified.

          • Oil sands clam, there are tar pits in California, perhaps the political climate is more to your liking there?

            Refer to the list above for reclaimed and certified reclaimed land clam.

            Or that would be reefer in your case.

          • Yes, the tar pits in California are composed of the same substance as the tarsands in Alberta. The only difference is that nobody has ever felt a need to rebrand the tar pits.