January 8, 2009 / 8:38 PM / 9 years ago

Canada oil sands firms not fearful of legal action

4 Min Read

CALGARY, Alberta (Reuters) - Canadian oil sands producers, under fire from environmental critics, do not fear increasing legal challenges to their operations while they try to polish their public image, executives said on Thursday.

As part of a campaign to respond to Canadians' concerns about the environmental impact of multibillion-dollar oil sands developments, the industry released a poll showing half of respondents don't believe its officials' comments to media.

The survey of 850 people also showed 46 percent do not believe the energy sector has done a good job balancing the environment and the economy, while 22 percent do.

Such numbers show the need to improve communications, but recent court challenges to oil sands projects and operations by environmental groups are not cause for alarm, executives said.

"I wouldn't say we have any fear at all," Bruce March, chief executive of Imperial Oil Ltd, the country's biggest oil producer and refiner, told reporters.

"I think the key thing to keep focused on is these projects have been developed in the past following the rules and regulation of the federal and provincial governments. Those work processes include collaboration with citizens."

On Wednesday, the group Ecojustice and its allies took the first step to convince a judge to lay charges against Syncrude Canada Ltd for the deaths of 500 ducks that had landed on a toxic tailings pond at its northern Alberta site last spring.

Also last year, groups including the Pembina Institute and Prairie Acid Rain Coalition successfully appealed the approval for Imperial's proposed C$8 billion ($6.8 billion) Kearl oil sands project in Federal Court, causing a temporary delay.

"This initiative isn't to do something to avoid any legal action. Frankly, that's a part of the business and the world we live in. I'd expect that to continue," March said.

The legal challenges are part of efforts by Canadian and U.S. environmental groups to send the message that development of the massive northern Alberta energy resource is harmful to air, land, water and wildlife, and should be halted.

The Canadian Association of Petroleum Producers, faced with the moves by such organizations as Greenpeace and the Natural Resources Defense Council, began its public relations counteroffensive last June, promising to be more responsive to public concerns.

Massive Resource

The oil sands represent the largest oil resource outside Saudi Arabia and are seen as a key energy source for the United States. But the heavy crude is far more expensive to develop and requires methods with more environmental impact.

CAPP launched a website, www.canadasoilsands.ca, to foster discussion and to inform Canadians about what's being done to cut greenhouse gas emissions or limit use of fresh water.

"We've dropped the ball in getting our message out and communicating," CAPP President David Collyer said. "We have not dropped the ball on environmental performance as an industry, but we do acknowledge that there is opportunity to do better."

Companies have recently deferred several oil sands projects, blaming meltdowns in oil prices and credit markets. Some analysts predict cost cutting and job losses.

Still, oil sands officials said investment in improving environmental performance, such as developing carbon capture and storage and dry tailings technology would not get cut.

Among their poll's other findings, 42 percent of respondents had a positive view of the oil sands while 30 percent had a negative one. Seventy-one percent believe economic benefits are possible while protecting the environment. Eleven percent disagreed.

Fresh water use was the top concern, scoring 26 percent, while wildlife and habitat impact ranked second at 19 percent.

The poll, conducted last June, has a margin of error of 4.8 percent.

($1=$1.18 Canadian)

Editing by Rob Wilson

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