Regulation is deficient in Canada's oil sands: study

Wed Dec 15, 2010 4:51pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Reclamation in Canada's oil sands is not keeping pace with rapid development and that could leave the public vulnerable to major financial burdens in years to come, a scientific panel said Wednesday.

The study by Royal Society of Canada scientists, the latest report on the effects of the country's multibillion-dollar oil sands sector, also concluded that governments and regulators are lagging world standards in their ability to oversee the industry and monitor its environmental impact.

"Current government of Alberta policy on financial security for reclamation liability leaves Alberta vulnerable to major financial risks, which are exacerbated by the current state of reclamation, which is not keeping pace with the rate of land disturbance," the panel said in its report.

Alberta's oil sands are the largest source of crude outside Saudi Arabia, and are the target of billions of dollars of spending by the world's oil industry. However, the environmental impact of the rush to develop the oil is under intense scrutiny by environmentalists and politicians.

The seven-member panel, chaired by Steve Hrudey, professor emeritus of analytical and environmental toxicology at the University of Alberta, pointed out uncertainty in the industry's ability to reclaim wetlands, given current methods.

It pointed out that technology to manage tailings ponds, the toxic byproducts of oil sands extraction, has improved over the past decade, despite recent incidents involving the deaths of hundreds of ducks that landed on a toxic pond.

However, the government should move forward with efforts to improve financial liability programs for both mining and thermal oil sands developments by putting extraction and upgrading plants on the list of facilities that must be reclaimed, the report said.

It said environmental assessment practices are deficient, based on guidelines from such agencies as the International Association for Impact Assessment, the Organization for Economic Co-operation and Development, and the World Bank.   Continued...