Beneath the surface

Beneath the SurfaceA review of key facts in the oilsands debate

Simon Dyer

January 2013

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Leading Canada’s transition to a clean energy futureThe Pembina Institute is a national non-profit think tank that advances clean energy solutions through research, education, consulting and advocacy.

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Presentation Overview• Climate and air• Water• Tailings• Land and wildlife• Economics

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Climate and AirAverage oilsands production is significantly more greenhouse gas (GHG)-intensive than conventional oil production

• Production emissions typically 3.2 to 4.5 times more greenhouse gas emissions than conventional oil

• Lifecycle emissions are higher than conventional (23% EU, 8-37% Canada/US)

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Climate and AirOilsands emissions are a growing problem• Large per-barrel decreases in GHG intensity have stalled

or worsened

Past changes in industry-wide greenhouse gas intensity in the oilsands

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Climate and AirOilsands emissions matter on a national scale, and are a significant barrier to meeting Canada’s 2020 climate commitment• Oilsands emissions accounted for 7% of Canada’s

emissions in 2010, forecasted to be 14% in 2020• Emissions forecast to reach levels higher than the

emissions from every province except AB and ON

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Climate and AirOilsands emissions matter on a global scale• Canada is among top-10 GHG producers on absolute and

per capita basis• Oilsands growth is challenging Canada to meet its

international climate target due to massive growth • While other sectors in Canada’s economy are expected to

reduce GHGs by 67 Mt by 2020 (relative to 2005 levels), oilsands GHGs are expected to add 72 Mt of GHGs

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Climate and AirCurrent regulations do not result in meaningful reductions in greenhouse gas emissions from oilsands development• Alberta regulations ($15/tonne x 12% of emissions = $1.80

compliance cost)• Carbon capture and storage costs $95-$225/tonne

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Climate and AirAir quality is starting to be impacted by oilsands air pollution• Air quality exceedances increasing• 33X more exceedances in northeastern AB in 2009

compared to 2004• Air concentrations for NO2, SO2, H2S and O3 getting close

to limit levels

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Climate and AirForecasted growth in oilsands will present very serious air pollution challenges in the Wood Buffalo Region• Approved production is almost triple current operating

levels • Modeled predictions for NO2 levels already exceed

Alberta’s air quality limits

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WaterWater monitoring in northeastern Alberta has been inadequate, yet governments continue to approve new oilsands projects• Federal/Provincial plan not complete until 2015• 5.2 million barrels approved• Peer-reviewed research continues to show oilsands

development is having an impact on water quality• Polycyclic aromatic hydrocarbons now 2.5 to 23 times

greater than 1960 levels in some lakes due to oilsands development

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WaterOilsands extraction uses large amounts of water, despite recycling efforts• Mining – 2 to 4 barrels of water per barrel of bitumen after

recycling• In situ extraction – 0.8 to 1.7 barrels of water to extract and

upgrade a barrel of oil• In 2011, oilsands industry used 170 million cubic metres of

water, equivalent to the residential water use of 1.7 million Canadians

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WaterOilsands companies are not required to stop withdrawing water from the Athabasca River, even if river flows are so low that fisheries and habitat are at risk• Water allocations from Athabasca River nearly doubled in

past decade due to oilsands• Current water withdrawal management framework

prioritizes industry use over aquatic protection• Missing element – Ecosystem Base Flow (EBF) absolute

cut off point above which no withdrawals are allowed (rare event, 1/100 years)

• GoA now missed two deadlines to release final framework

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TailingsOilsands tailings volumes continue to grow due to a permissive regulatory approach• Current tailings rules not enforced• Lack of transparent reporting to indicate how companies

are faring today• Rules only address a portion of tailings production• 250% increase in tailings area since 2005• Current area = 176 square kilometres• Current volume = 830 million cubic metres

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TailingsTailings lakes house compounds known to be acutely toxic to aquatic organisms• Tailings concentrate naturally occurring compounds to

toxic levels over time• Source of metals, PAHs, hydrocarbons, naphthenic acids

and solvents

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TailingsTailings lakes seep an undetermined amount of toxic waste• Tailings seepage rate is ~ 11 million litres/day• Little publicly available information exists to indicate how

operators are monitoring or capturing this seepage

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TailingsCapping toxic tailings waste in end pit lakes with water is an unproven and risky concept• Could take decades to determine whether end pit lakes are

a viable and safe permanent storage site for tailings • 29 end pit lakes have been proposed by oilsands

operators

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Land and WildlifeRestoration of wetlands continues to be a major challenge and may never occur• Peatlands likely to be permanently lost after mining• As of 2011, approved mining production is expected to result

in a loss of approximately 28,000 hectares of peatland• Alberta has no wetland policy to prevent wetland loss in

northeastern Alberta

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Land and WildlifeThe boreal forest will not be restored to its native state following mine closure• Objective is equivalent land capability vs. pre disturbance

state• Forest uplands and end pit lakes vs. peatlands and old

growth forests• Only 0.1% of total area disturbed by oilsands mining certified

as reclaimed

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Land and Wildlife

Oilsands disturbance vs. reclamation from 1987-2008Source: Alberta Environment

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Land and WildlifeIn situ developments may affect a much larger area than oilsands mining• In situ potential 30X larger than mineable region• More GHG-intensive than mining• Results in significant landscape fragmentation

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Land and WildlifeWoodland caribou herds are declining in the oilsands and are on track to be extirpated• Local extinction likely in 30 years• Federal recovery strategy identifies 65% intact habitat

target • Undisturbed caribou habitat in Northeastern Alberta = 24%

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Land and WildlifeOilsands development threatens to harm millions of birds through habitat fragmentation and destruction • Regional bird populations currently healthy• Mining may impact the breeding habitat for 280,000 to 3.6

million birds over 20-40 year period• In situ development could impact as many as 14.5 million

birds

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EconomicsTaxpayers may foot the bill for cleanup of oilsands mines • Operators not responsible for 100% of cost of cleanup• Little reclamation security and protection for Albertans over

life of mine until the end

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EconomicsThe costs and benefits of oilsands development are not spread evenly across Canada • AB expected to reap 94% of GDP impacts from oilsands

development• Jobs created by oilsands in next 25 years – 86% will

remain in AB• Manufacturing sector declining while natural resource

sector booming

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EconomicsRelying on the volatile profits from oilsands projects to fund essential services creates financial risks for both the private and public sector • Oil grown from 18% to 46% of total Canadian commodity

production in past 15 years• Price of oil fluctuates widely • Oilsands producers have a narrow price window in which to

operate • Oilsands roller coaster unreliable means to fund social

programs and provide ongoing revenue

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Conclusions• Significant opportunities to address oilsands

mismanagement• Need a greater emphasis on management vs.

communications• Pace and scale need to slow to accommodate

new policy solutions• Role of technology limited without regulatory

drivers

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