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Vol. 12, No. 9 Week of March 04, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

NWT moves to protect Mackenzie waters

Northerners worry thirsty oil sands could damage major waterways of Canadian Northwest; Kearl oil sands gets conditional approval

Rose Ragsdale

For Petroleum News

Extracting petroleum from Alberta’s oil sands is a big challenge in itself.

But potentially detrimental effects on the water quality of northwestern Canada are raising the stakes of development for the province’s northern neighbor.

The Northwest Territories and others took steps recently to ensure that they get a chance to play a role in the oil sands’ future, and in the process, safeguard the future of the Mackenzie River system.

Responding to concern expressed by NWT’s Ministry of Environment about dropping water levels and possible contamination, Alberta Environment agreed to travel to Yellowknife for a meeting in the next few weeks.

Bob Bailey, deputy minister of NWT Environment, said he sought the meeting because of growing concern that the Northwest Territories might not have a voice in consultations being done in Alberta to review development in the oil sands.

“We want a collective opportunity to state our case about water quality,” he said.

The NWT is the second jurisdiction to complain about cross-border environmental effects of Alberta’s oil sands in recent months. Saskatchewan is currently negotiating with its upwind neighbor over acid-rain-causing airborne emissions.

Most of population on Mackenzie River system

Most of the population of the NWT lives on the Mackenzie River system, which is largely fed by inflows from northern Alberta. Aboriginal groups in the region complained to Alberta’s energy regulator last fall that water levels are dropping in the Slave River, which provides about three-quarters of the water in Great Slave Lake.

Government figures show the Slave River was consistently about half a meter lower last year than its 2002 level. At one point in September, the river was down three meters.

Growing numbers of Canadians, including members of the oil industry, are worried that water use by oil sands companies may be at least partly to blame. Some estimates suggest the industry returns only 10 percent of the 500 million cubic meters of water it takes annually from the downstream Athabasca River.

Bailey said the ministry’s concerns are part of a larger picture, and others, including the Mackenzie River Basin Board, are watching the oil sands development closely.

Though Alberta officials say the low water levels are more likely the result of drought, possibly related to climate change, they agreed to meet with Bailey to hear the northerners’ viewpoint on managing water use on the Athabasca and Slave.

$15 million in research funded

Separately, Imperial Oil Ltd., one of Canada’s top producers of oil and gas, and Alberta Ingenuity announced Feb. 27 a partnership to fund $15 million in research over the next five years at the University of Alberta’s engineering school that will focus on water use in oil sands development. Government-affiliated Alberta Ingenuity spends income from a $1 billion endowment on finding ways to improve business, education and the environment in Alberta.

The Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation was given a mandate to find more efficient, economically viable, and environmentally responsible ways to develop Canada’s oil-sands resources, according to a joint statement.

Kearl conditionally approved

Meanwhile, Canadian regulators conditionally approved Imperial Oil’s plans Feb. 27 for the C$8 billion Kearl oil sands project, but urged the Alberta government to ease social and environmental strains caused by the oil sands rush.

The decision by a joint panel of the Canadian Environmental Assessment Agency and Alberta Energy and Utilities Board placed 17 environmental, planning and safety conditions on the approval for the 300,000-barrel-a- day project, which followed a hearing in November.

Imperial has said it wants to develop the Kearl oil sands mining and bitumen extraction project in stages, starting with a 100,000-bpd phase.

Exxon Mobil Corp. owns a 30 percent interest in the proposed project, located 44 miles north of Fort McMurray.

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