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Vol. 15, No. 40 Week of October 03, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Alberta ‘full speed ahead’

US senators praise government, industry, for handling environmental matters

Gary Park

For Petroleum News

The oil sands showdown has no parallel in Canadian politics in more than half a century, not since construction of Canada’s first major natural gas pipeline, with connections to the United States, brought about the defeat of a national government in 1957.

Just when it seems the Great Oilsands Debate (GOD for short) has worked itself into a frenzy, the pot boils over again.

The second half of September produced a daily flow of tit-for-tat exchanges that only widened the gulf between the warring factions. Consensus does not appear to be a viable prospect.

The pro-oil sands side, working on its charm offensive — with Alberta government cabinet ministers and industry leaders fanning out across North America — has tried selling the idea of a “progressive solution” to, or a “constructive conversation” around the most heated issues, mostly involving the environment.

Offering an olive branch, Marcel Coutu, chief executive officer of Canadian Oil Sands and chairman of Syncrude Canada, the world’s largest producer of synthetic crude, held a meeting with David Suzuki, the patron saint of Canadian environmentalists.

He suggested trading a polarized discussion for an effort to find common ground “instead of wasting so many resources on both sides.”

Coutu suggested Suzuki, because of his national and global profile, could serve as a catalyst in bringing others to the peace table.

“He declined to do that,” said a chagrined Coutu.

However, Marlo Raynolds, executive director of the Alberta-based Pembina Institute and Greenpeace campaigner Mike Hudema said they’re open to dialogue, provided the industry was prepared to agree on hard, science-based environmental limits on issues such as greenhouse gas emissions and the oil sands impact on air, land and water. At best a non-starter.

U.S. senators visit

While those two sides circled each other, the Alberta government gained some high-powered converts in U.S. Sens. Lindsey Graham, R-S.C., and Saxby Chambliss, R-Ga., who toured the oil sands at the invitation of Alberta Premier Ed Stelmach along with Democratic Sen. Kay Hagan of North Carolina on Sept. 17.

Their response to Stelmach’s attempts to “refute myths” being spread about the oil sands and the environment likely surpassed Alberta’s best hopes as they praised the government’s “conscientious approach” to development of its vast bitumen resource.

“The actual (open pit) mining is a very small part of the landscape up here, so when you fly over you see a lot of nature and rivers and wilderness,” Graham said during a visit to Syncrude Canada. “From my point of view, the environmental issues are being addressed in a responsible way. I am for full speed ahead in terms of using Canadian oil sands oil in America.”

Lining up the visit by the three senators was viewed by the government as a coup, given tensions over the future transportation and refining of bitumen in the U.S., with several states threatening to ban imports.

In addition, the Sierra Club has filed a lawsuit accusing the U.S. Defense Department of violating the U.S. Energy Dependency and Security Act 2007 for contracting fuel purchases that are linked to the oil sands.

Graham told reporters he is concerned the Sierra Club suit could lead to “over-reaching policies that would deny our military some energy sources that come from friendly areas,” insisting the military “should be able to use Canadian oil.”

Hagan said the senators opted to visit Alberta because of their concerns “about purchasing oil from some of the countries of the Middle East and we’re very interested in talking to our Canadian partners.”

Stelmach said the senators’ visit was just part of his government’s aggressive efforts to convey what is happening to reduce the environmental impact of oil sands development.

“We’ve come a long way, but we can and will do more,” he said, noting that cabinet ministers will be in Alaska and Mississippi and across Canada in the next few weeks to explain what progress is being made.

Canada’s Environment Minister Jim Prentice, speaking to business leaders in Banff, Alberta, in mid-September, said Canada must improve its e

One review panel named

nvironmental record to ensure that exports of oil, natural gas and hydroelectricity to the U.S. — valued at C$122 billion in 2008 — remain a “centerpiece” of the country’s economic prosperity.

The Stelmach government followed that advice by naming a committee of independent scientists to review water-monitoring data collected from the oil sands region, saying an understanding of the industry’s impact is “absolutely critical.”

Alberta Environment Minister Rob Renner said there must be a “complete and total assurance in the data” in order to balance environmental protection with oil sands development.

In a surprise gesture, the government asked University of Alberta ecologist David Schindler — who played a lead role in a recent report claiming toxins have entered the Athabasca River from shallow oil sands deposits — to help select the panel.

Prentice has also said he will commission a Canada-wide panel of researchers to review whether the monitoring model used by the Schindler team is appropriate.

Industry fights back

The fight back against oil sands critics seized some of the spotlight at the World Energy Congress, which attracted 3,500 delegates to the Montreal event from Sept. 14-17.

Royal Dutch Shell Chief Executive Officer Peter Voser chastised the Canadian and Alberta governments for not doing enough to defend the oil sands against global attacks.

He said the governments have been more proactive over the last 12 months,” but they could do more” to explain how the industry is cleaning up its record.

Voser called for new rules relating to fossil fuels in order for natural gas to flourish as a clean, efficient and plentiful energy source, but he noted that Shell’s oil sands projects are expected to grow from 2.5 percent of his company’s overall production to 4 percent based on projects now in the works.

Rick George, chief executive officer of oil sands giant Suncor Energy, took the offensive in Montreal, rejecting the “dirty oil” label attached to the oil sands at a time when the petroleum industry is an essential part of combating global poverty.

“Publicity stunts and name-calling are not what we need right now,” he said. “We need an adult conversation about the benefits and risks associated with energy production … and how we can maximize the former and minimize the latter.”

Suncor begins reclamation

A week later George was at the center of a ceremony marking the first time an oil sands producer has transformed its toxic effluent into reclaimed land.

“Actions speak louder than words,” George said, as he stood in front of what was once a toxic tailings pond and pledged to accelerate his company’s plans to spend C$1.2 billion over the next two years on technology to clean up effluent.

Suncor plans to plant 600,000 trees and shrubs at the site before the end of 2010 in a project the Pembina Institute said is a sign of progress, while noting that less than 0.2 percent of disturbed land has so far been reclaimed.

But it was sufficient for Stelmach to hail an “unbelievable accomplishment” and declare he was “damn proud to be an Albertan.”

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