March 17, 2010 / 10:06 PM / 8 years ago

More regulation needed for Canada oil sands: report

CALGARY, Alberta (Reuters) - Steam-driven projects to extract crude from Canada’s oil sands, often held up as more environmentally friendly than mining, have major drawbacks of their own that require more stringent regulation to fix, an environmental think tank said on Wednesday.

The Alberta-based Pembina Institute compared nine projects that employ “in situ” extraction methods -- where steam is pumped into the earth to liquefy the extra-heavy crude so it can be pumped to the surface -- and found all need to make improvements to varying degrees.

“The impacts of in situ have sort of been framed as low-impact oil sands development, but when you look at the data that isn’t actually borne out,” said Simon Dyer, one of the authors of the report, called “Drilling Deeper: the In Situ Oil Sands Report Card”.

“Some of them indicate actually higher impact on a per-barrel basis than mining, for instance greenhouse gas emissions and sulfur-dioxide emissions and some of the cumulative impacts on land.”

Projects were judged on general environmental management, land use, air emissions, water use and impact on climate change, and then given an overall score.

Open-pit mining gets most of the attention in the oil sands of northern Alberta, the largest crude deposits outside the Middle East. But the lion’s share of the crude is too deep to mine, and must be extracted using in situ techniques.

Suncor Energy Inc’s Firebag project took top marks with relatively low ratio of injected steam to oil produced and lower greenhouse gas emissions. But it scored just 60 percent.

The lowest mark of the nine, at 25 percent, was given to Canadian Natural Resources Ltd’s Primrose/Wolf Lake development. The project has high steam-oil ratio and emissions and scored poorly on commitments to regional environmental initiatives, the report said.

A Canadian Natural official was not immediately available for comment.

Other projects studied are run by Imperial Oil Ltd, Cenovus Energy Inc, Husky Energy Inc, Royal Dutch Shell Plc and Japan Canada Oil Sands Ltd. The average score was 44 percent.

“The main message is there’s clearly room for improvement,” Dyer said. “There’s a wide range of performance, we don’t have half the regulations that would necessarily drive implementation of best practices that are there currently.”

Alberta Energy Minister Ron Liepert said he had not seen the report, although Dyer said it was sent to senior officials in the province’s energy and environment departments Tuesday.

However, Liepert said Alberta’s energy industry needs fewer regulations, a message he has repeated often since he announced results of a “competitiveness review” last week.

“We don’t need more regulations. We have plenty of regulations in place to ensure that environmentally we are protecting Albertans. But in many cases it’s simply taking too long, it’s too duplicative and we’ll deal with that,” he told reporters.

Editing by Peter Galloway

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