Commercial oil sands development dates back to the 1960′s, but the process continued largely unnoticed by the international community until the early 2000′s when the resources’ proven reserves were widely publicized. Although the government of Alberta had been working to communicate the importance of the oil sands as an energy source and economic driver, the province’s leadership was taken by surprise when the environmental community trained its crosshairs on the large-scale industrial mining operations.

The debate between the environmental community, regulators, industry and stakeholders about the environmental costs versus the economic benefits of oil sands development has evolved over the years and continues today.

At the most basic level, the environmental impacts associated with developing Canada’s oil sands can be broken down to land, water and air, though the operations’ affect these resources in various ways, often simultaneously.

One of the leading environmental groups addressing oil sands development is the Pembina Institute, “a national non-profit think tank that advances sustainable energy solutions through research, education, consulting and advocacy.” A Pembina representative briefed Breaking Energy and the other journalists as part of a recent trip to Alberta organized and partially funded by the provincial government.

Marc Huot, Technical and Policy Analyst at Pembina explained that his organization takes a neutral stance with regard to the oil sands and advocates “responsible oil sands development.”

The institute characterizes this as meeting the following criteria:

  • Current environmental impacts are addressed
  • Science-based environmental limits are established
  • Future development occurs within science-based limits (e.g. development occurs in a manner which allows Canada to meet international climate commitments)
  • Revenue from oil sands development is used to transition to a clean energy economy

Impacts to Air

“Alberta’s greenhouse gas emissions have grown the most of any North American state or province from 1990 to 2009,” said Huot. In order to address this issue Pembina wants Alberta to commit to an emissions reduction target that would help Canada “prevent dangerous levels of global warming,” implement a stricter carbon pricing system – Alberta currently has a $15/ton carbon tax – and mandate the use of carbon capture and storage by 2016.

The issue is becoming even more challenging as the industry shifts from open pit mining to in situ production, which is 2.5 times more energy intense than mining, Huot said. In situ is a process that injects steam underground to heat up bitumen so it flows via gravity into a producing well. This process uses less water than mining, but large natural gas-fired boilers used to generate the considerable volumes of steam required to heat the resource make the process energy intensive.

In order to protect air quality, Pembina recommends policies that require oil sands operators to “use equipment with the lowest achievable emissions or to deploy best-available technology for air emissions reductions. Upgraders – which are simple refineries – steam boilers and mining fleets – primarily trucks – are the main emissions sources.

Impacts to Land

The oil sands deposits that are extractable using existing technology are located in Northern Alberta in an ecosystem known as the boreal forest that supports a wide range of plant and animal species. The caribou population – one of the most widely studied – has been declining in oil sands development areas due to the proliferation of well pads, roads, power lines, pipelines, etc. that fragment their habitat.

As a result, Pembina recommends establishing a threshold on the maximum level of development that can align with the pace of reclaiming land where mining has been completed. The institute also calls for continued creation of new conservation areas, with maintaining undisturbed caribou habitat a high priority. “Herds living in northern Alberta are currently listed as ‘threatened’ populations under the Species at Risk Act,” according to Pembina.

“Companies are almost in a no-win situation, as the level of disturbance associated with [oil sands] development is incompatible with maintaining caribou habitat,” Simon Dyer, Policy Director at Pembina told Breaking Energy. There is no real evidence that habitat mitigation or restoration efforts initiated to date have had any real effect on caribou population decline – “it appears to be too little too late,” he said.

“There is such a debt of [landscape] fragmentation – landscapes have to start getting better, not worse,” said Dyer. And he questioned whether the existing level of habitat disturbance would be legal in the US under its stricter Endangered Species Act regulations.

The institute is concerned by the number of incremental oil sands projects that have already been approved given the fact that existing development has “reduced or degraded the habitat in caribou ranges to a point where the land is no longer able to support sustainable caribou populations,” Dyer wrote in a recent blog post.

Where industry has started to do interesting work is with the Oil Sands Leadership Initiative, he said, but the fear is that companies are trying to get their projects grandfathered in before regulations are tightened.

Impacts to Water

Oil sands development is water intensive and water pollution is a concern for both surface mining and in situ operations. Surface mining requires large volumes of water to separate bitumen from sand, though industry now recycles much of this water.

River levels fluctuate seasonally with snow melt, which makes extraction during low-flow periods potentially problematic, explained Huot. One solution is for operators to store water during periods of excess flow that can be tapped when the river level is lower.

Downstream pollution is another risk that is currently being researched and monitored.

Perhaps the most serious water issue associated with surface mining operations are the tailings ponds where water, solvents and sediment separated from the oil are collected. These enormous structures are formed by building dikes and levees, the failure of which is one of the biggest risks.

Off-gassing of volatile organic compounds from solvents, contaminated water seepage, anaerobic decomposition and contact with wildlife are additional concerns associated with tailings ponds. In a now famous 2008 incident, several hundred migrating birds were injured and killed when they landed in a tailings pond.

These impoundments can be reclaimed and returned to a natural state, though the process is expensive, complex and takes decades. Extensive tailings pond reclamation research is currently underway to streamline and improve the process.

While the economic benefits associated with oil sands development are undeniable – $794 billion in royalties and tax revenue are expected to be generated across Canada over the next 25 years and over 2,400 American companies supply goods and services to Canadian oil sands and pipeline companies – the serious environmental impacts cannot be ignored.

Pembina concludes that responsible oil sands development is not currently being achieved and points to the pace and scale of oil sands expansion as a major risk and challenge. Policy and regulation improvements are required to push companies to make technological innovations that can reduce the operations’ environmental footprint.

The group remains optimistic however. They believe responsible oil sands development is achievable and the organization sets out 19 policy solutions in a report entitled “Solving the Puzzle, Environmental Responsibility in Oil Sands Development,” that can be adopted to achieve that goal.

Dyer said he is happy to see companies come together and make commitments to lower impacts – as they have done with initiatives like Canada’s Oil Sands Innovation Alliance – but the ultimate effectiveness of these efforts can only be judged over time.