News Articles | The Globe and Mail | Nathan Vanderklippe | October 02, 2009
The Alberta government and Canada’s oil sands industry are working on a controversial new plan to make it easier for companies to get environmental permission for certain types of projects.
Under a major new rule change being considered by Alberta’s Environment Ministry, an impact assessment – a massive document that looks at a project’s effects on forests and wildlife and other environmental factors – may no longer be required for most new in situ oil sands projects. Instead, industry would agree to abide by a “code of practice,” similar to the rules governing companies that drill wells for conventional light oil.
Because in situ projects use wells rather than open-pit mines to extract bitumen, the industry has argued they are similar to light oil projects, and should be approved similarly. To gain approval for an in situ project today, companies must go through the same environmental process as mines.
A change in rules could have a major impact on the oil sands industry, which expects to use in situ methods to extract 80 per cent of Alberta’s 173 billion barrels in oil sands reserves.
The idea of lowering the regulatory burden on new projects has drawn fire from critics, who say it may amount to undercutting environmental standards in the name of a more efficient process.
Industry officials say the plan could cut a project’s approval time from as much as five years to as little as one.
“What they’re looking at doing is removing in situ development from the mandatory environmental impact assessment lists,” said Michael Burt, the managing director of the In Situ Oil Sands Alliance, which has joined with the Canadian Association of Petroleum Producers and oil patch companies to push for the rule change. “They want to have something in draft form prior to the end of the year.”
Though a number of options are under consideration, one would see in situ projects still subjected to a full environmental assessment if they are located in an greenfield area or use new technology, Mr. Burt said.
Alberta Environment spokeswoman Lisa Grotkowski said the department is examining a number of ideas, but has not yet made any decisions.
“If you look at the environmental review process, there are times where we have duplications … So we’ve been working with industry, and having some conversations about what’s the best way forward,” Ms. Grotkowski said. “But there’s no intent to compromise the environment in any way.”
Even environmentalists agree that the province’s project approvals system needs change. The energy industry’s rapid pursuit of oil sands development in recent years has overwhelmed regulators. The time required for approvals has more than doubled in the past decade, and the process has also grown more cumbersome. The number of binder-inches required to complete an average environmental impact assessment has grown to more than 36 in 2006 from seven in 1996.
Those assessments “employ a lot of people in environmental consulting firms, but it’s not an effective way to manage the environmental impacts of oil sands,” said David Keith, director of the Institute for Sustainable Energy, Environment and Economy at the University of Calgary.
But Mr. Keith says it would be wrong to scrap environmental impact assessments without bringing in new rules to evaluate a project based on how it will affect the area around it. While Alberta is working on regulations that would consider such “cumulative effects,” current laws assess each project individually.
Still, companies who build in situ projects say it makes sense for them to get an easier ride than the open-pit mines that dominate the landscape north of Fort McMurray.
In situ projects don’t excavate enormous volumes of earth to produce oil sands bitumen. Instead, they inject huge volumes of high-pressure steam into bitumen-bearing rock. The steam melts out the bitumen, which is then collected and brought to the surface with horizontal wells.
In situ produces more greenhouse gas emissions than mining, but creates less surface disturbance. In situ projects also rely primarily on brackish, non-potable water to power their operations, while mines typically pump fresh river water.
But academics and environmentalists strongly disagree that in situ is more benign.
“These projects have the potential to affect wildlife and groundwater over an area the size of Florida. And their air pollution intensities are enormous,” said Andrew Nikiforuk, author of Tar Sands: Dirty Oil and the Future of a Continent.
But the industry insists it is not trying to skirt any environmental rules. “We’re not trying to take shortcuts here,” said Harbir Chhina, vice-president of upstream operations at EnCana Corp. “We’re just trying to do it better.”