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Market News

 August 01, 2007
Oil Sands Report: No consensus on GHG strategies

 Calgary, Canada (GLOBE-Net) -- The Alberta Oil Sands Consultations Multi-stakeholder Committee has delivered its final reports on oil sands development and aboriginal involvement. Its 120 action recommendations address social, economic and environmental challenges facing oil sands development. But no consensus was reached on how to manage GHG emissions.

The Multi-stakeholder Committee (MSC) was formed in spring 2006 to lead a public consultation on the development of Alberta's oil sands. It included representatives from municipal, provincial and federal governments, industry, First Nations and Métis groups, and environmental non-governmental organizations.

The report, delivered to the Alberta government on June 30th and just now made public, includes 96 recommendations upon which Committee consensus was reached. A further 24 non-consensus items are also included for government consideration.

A companion Aboriginal Consultation Final Report provides an overview of the separate consultation processes, as well as a wide range of recommendations First Nations and Métis would like the government to consider when determining how to respond to the work of the MSC.

Some of the common themes during consultations related to the pace of development, including calls for a moratorium, capturing more value-added industry, stronger government leadership, the need for more planning, and protection of the environment. Social and economic concerns were also heard, and the infrastructure and service deficit in the Fort McMurray area drew much attention.

The panel agreed that economic instruments should be used to encourage sound environmental practices and the government should evaluate a cap and trade system for air emissions in the oil sands regions, and use market instruments to facilitate improvements in regional water usage.

Other consensus recommendations included:

  • Improvement of cumulative environmental impact assessment processes for oil sands developments;

  • Basing environmental performance requirements for new projects and capital stock turnover of existing projects on the use of "best available technology economically achievable" (BATEA);

  • Development of quality of life indicators for Alberta communities to guide investment to address identified deficiencies in oil sands impacted communities;

  • Implementation of comprehensive regional resource and environmental planning and management systems for the Athabasca, Peace River and Cold Lake Oil Sands Areas;

  • Further consultation with First Nations and Métis;

  • Incorporation of Aboriginal Traditional Environmental Knowledge into environmental planning and management;

No consensus on air emissions, GHGs

Committee members agreed the government should continue to utilize ambient air quality objectives and caps as strategies to manage air emissions in oil sands areas. However, there was as lack of consensus over the use and interpretation of the term "precautionary principle", nor on a specific recommendation to establish caps for air emissions in areas with upgrader developments.

The panel agreed on a need to reduce greenhouse gas (GHG) emissions from oil sands development, calling for encouragement of technology development in this area, and participation by industry and government in the advancement of carbon capture and storage activities. However, committee members did not agree on specific time frames, methods, or levels of required reductions. Recommendations that failed to achieve consensus included development of facility targets for energy efficiency measured by per barrel energy intensity; GHG targets that would have capped emissions for the oil sands industry; and the requirement for carbon neutrality in the oil sands industry by the year 2020.

The Alberta government recently implemented climate change legislation which forces companies which emit more than 100,000 tonnes of greenhouse gases a year to reduce emissions intensity by 12 percent starting July 1, 2007. Companies reporting their 2007 emissions at the end of this year will be required to meet the intensity target for the last six months of the year. The legislation covers around 100 facilities that account for approximately 70 per cent of Alberta's industrial emissions, including oil sands facilities.

The provincial government will review the reports across a number of involved departments before formulating a response. The challenge for the government is to implement a realistic, effective strategy which responds to Albertans' desires for improved social, environmental and economic management of the province's most valuable natural resource.

The environmental challenges associated with oil sands development are well known. Oil sands from surface mining span over 3,000 square kilometers of boreal forest, one of Canada's most valued ecosystems. Water use is a major concern, as the Athabasca River is being strained by increased withdrawals; tailings ponds full of contaminated water from the refining process now cover over 50 square kilometers of land. The industry is also the single largest contributor to increases in Canada's greenhouse gas emissions since 1990, responsible for at least 39 Mt of the predicted 270 Megatonnes by which Canada will overshoot its emissions reduction target under the Kyoto Protocol.

The full MSC reports and further details can be found at www.oilsandsconsultations.gov.ab.ca.



For More Information: Government of Alberta