Syncrude faces multimillion-dollar tailings costs

Fri Apr 23, 2010 1:51pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Syncrude Canada Ltd, the country's largest oil sands producer, will spend hundreds of millions of dollars building two plants to reduce toxic waste under recently tightened regulations, it said on Friday.

The plants, which will employ new technology to process tailings from oil sands production, are conditions of approvals by the Alberta Energy Resources Conservation Board, the first under a directive issued in February 2009.

Syncrude and the ERCB said the new rules are tough, but at least one environmental group said the approvals impose weaker targets than what were spelled out in the directive.

The board approved tailings ponds -- expansive man-made lakes that hold water, leftover bitumen, clay and heavy metals from the oil sands production process -- for both Syncrude and the yet-to-be-built Fort Hills project. The nods came with several conditions.

"This is the first time we've laid down specific criteria that the companies had to meet with respect to managing their tailings ponds," ERCB Chairman Dan McFadyen said in an interview.

"They were performance criteria. It didn't say how to do it. It said here's what you have to do to meet the management of tailings ponds to get them toward what we call a trafficable surface so they can then be reclaimed."

Under the new rules, operators must report on the ponds annually, cut the accumulation of fluid tailings and specify dates for construction, use and closure.

The ponds came to symbolize the battle between environmental groups and the oil sands industry in 2008, when 1,600 ducks were killed when they landed on a tailings pond at Syncrude's operation in northern Alberta. Syncrude has pleaded not guilty to federal and provincial charges over the incident and the case is now being tried.   Continued...

<p>Heavy equipment mines the oil tar sands at Syncrude's Aurora mine near Fort McMurray, Alberta in this May 23, 2006 file photo. REUTERS/Todd Korol/Files</p>