Providing coverage of Alaska and northern Canada's oil and gas industry
September 2020

Vol. 25, No.37 Week of September 13, 2020

Oil sands under fire

North American free trade panel says toxins leaking into groundwater; Canada’s environment minister taking findings ‘to heart’

Gary Park

for Petroleum News

A global environmental watchdog culminated two years of research by declaring there is compelling proof that tailings ponds in Alberta’s oil sands are contaminating groundwater.

The Commission for Environmental Cooperation, CEC, which is charged with implementing a side accord to the North American free-trade pact, said “there is strong scientifically valid evidence of oil sands processed water seepage into near-field groundwater ... when compared with the first peer-reviewed evidence published in 2009.”

Tailings ponds, such as those used by oil sands mining operations north of Fort McMurray, collect byproducts from the operations, including a mixture of water, sands, residual bitumen and other hydrocarbons that the industry calls “processed” water.

Many of the products are toxic, including naphthenic acids and heavy metals, while the residual oil that covers the ponds can trap migratory birds.

For years a debate has raged over whether pollutants detected in rivers and creeks in the oil sands region came directly from plant operations or from bitumen already in the soil.

Environmental submission in 2017

The CEC started its probe after environmental groups filed a submission in 2017, accusing the Canadian government of failing to use its Fisheries Act to prosecute oil sands producers over the “alleged leaking of deleterious substances.”

Federal Environmental Minister Jonathan Wilkinson said the CEC report was “troubling.”

“The findings in the report cannot be ignored,” he said. “I absolutely take these findings to heart.”

Wilkinson said the Canadian and Alberta governments must work together on oil sands monitoring, insisting the tail ponds issue requires an “enhanced level of urgency.”

Alberta’s acting chief scientist Garry Scrimgeour said the province needs time to digest the report.

He said the two governments are working closely under a joint monitoring program, a claim the CEC challenged, arguing there has been a lack of communications between the two governments.

But CEC did note that the two regulatory systems overlap when it comes to environmental reviews for new oil sands projects.

Kearl shutdown

Release of the findings coincided with an announcement by Imperial Oil (owned 69.6% by ExxonMobil) that it had shut in all production at its 220,000 barrels per day Kearl oil sands operation, stemming partly from the failure of a diluent pipeline which delivers ultralight oil from Edmonton to be blended with bitumen and aid transportation of the product.

An Alberta Energy Regulator spokesman said the spill involved about 566 barrels from the Polaris pipeline which has capacity of 865,000 bpd.

He said the impact on fish and wildlife is unclear at this stage.

The Kearl outage will likely remove 240,000-270,000 bpd from the market for a few weeks, said Credit Suisse.

From 2009 to 2014, Environment Canada conducted sweeping water testing around oil sands sites, including operations run by Syncrude Canada, Canadian Natural Resources, Suncor Energy and Shell Canada.

Investigations have found at least 15 cases where levels of toxins have exceeded federal guidelines.

Environmental Canada told the CEC it did not pursue violations because it was unable to prove “beyond a reasonable doubt” that the elevated levels were caused by commercial operations.

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