Presentation from a 2013 webinar by the Pembina Institute

1. Beneath
the Surface
A review of key facts in the
oilsands debate
April 2013

2. 2
Leading Canada’s transition
to a clean energy future
The Pembina Institute is a national non-profit think tank that
advances clean energy solutions through research, education,
consulting and advocacy.

3. Presentation Overview
• Climate and air
• Water
• Tailings
• Land and wildlife
• Economics
3

4. Climate and Air
Average oilsands production is significantly more
greenhouse gas (GHG)-intensive than conventional
oil production
• Production emissions typically 3.2 to 4.5 times more
greenhouse gas emissions than conventional oil
• Lifecycle emissions are higher than conventional (23% EU, 8-
37% Canada/US)
4

5. Climate and Air
Oilsands emissions are a growing problem
• Large per-barrel decreases in GHG intensity have stalled
or worsened
5
Past changes in industry-wide greenhouse gas intensity in the oilsands

6. Climate and Air
Oilsands emissions matter on a national scale,
and are a significant barrier to meeting Canada’s
2020 climate commitment
• Oilsands emissions accounted for 7% of Canada’s
emissions in 2010, forecasted to be 14% in 2020
• Emissions forecast to reach levels higher than the
emissions from every province except AB and ON
6

7. Climate and Air
Oilsands emissions matter on a global scale
• Canada is among top-10 GHG producers on absolute and
per capita basis
• Oilsands growth is challenging Canada to meet its
international climate target due to massive growth
• While other sectors in Canada’s economy are expected to
reduce GHGs by 67 Mt by 2020 (relative to 2005 levels),
oilsands GHGs are expected to add 72 Mt of GHGs
7

8. Climate and Air
Current regulations do not result in meaningful
reductions in greenhouse gas emissions from
oilsands development
• Alberta regulations ($15/tonne x 12% of emissions = $1.80
compliance cost)
• Carbon capture and storage costs $95-$225/tonne
8

9. Climate and Air
Air quality is starting to be impacted by oilsands
air pollution
• Air quality exceedances increasing
• 33X more exceedances in northeastern AB in 2009
compared to 2004
• Air concentrations for NO2, SO2, H2S and O3 getting close
to limit levels
9

10. Water
Water monitoring in northeastern Alberta has
been inadequate, yet governments continue to
approve new oilsands projects
• Federal/Provincial plan not complete until 2015
• 5.2 million barrels approved
• Peer-reviewed research continues to show oilsands
development is having an impact on water quality
• Polycyclic aromatic hydrocarbons now 2.5 to 23 times
greater than 1960 levels in some lakes due to oilsands
development
10

11. Water
Oilsands extraction uses large amounts of water,
despite recycling efforts
• Mining – 2 to 4 barrels of water per barrel of bitumen after
recycling
• In situ extraction – 0.8 to 1.7 barrels of water to extract and
upgrade a barrel of oil
• In 2011, oilsands industry used 170 million cubic metres of
water, equivalent to the residential water use of 1.7 million
Canadians
11

12. Water
Oilsands companies are not required to
stop withdrawing water from the Athabasca
River, even if river flows are so low that
fisheries and habitat are at risk
• Water allocations from Athabasca River nearly
doubled in past decade due to oilsands
• Current water withdrawal management framework
prioritizes industry use over aquatic protection
• Missing element – Ecosystem Base Flow (EBF)
absolute cut off point above which no withdrawals are
allowed (rare event, 1/100 years)
• GoA now missed two deadlines to release final
framework
12

13. Tailings
Oilsands tailings volumes continue to grow due
to a permissive regulatory approach
• Current tailings rules not enforced
• Lack of transparent reporting to indicate how companies
are faring today
• Rules only address a portion of tailings production
• 250% increase in tailings area since 2005
• Current area = 176 square kilometres
• Current volume = 830 million cubic metres
13

14. Tailings
Tailings lakes house compounds known to be
acutely toxic to aquatic organisms
• Tailings concentrate naturally occurring compounds to
toxic levels over time
• Source of metals, PAHs, hydrocarbons, naphthenic acids
and solvents
14

15. Tailings
Tailings lakes seep an undetermined amount of
toxic waste
• Little publicly available information exists to indicate how
operators are monitoring or capturing this seepage
• Tailings seepage rate is ~ 11 million litres/day
15

16. Tailings
Capping toxic tailings waste in end pit lakes with
water is an unproven and risky concept
• Could take decades to determine whether end pit lakes
are a viable and safe permanent storage site for tailings
• 29 end pit lakes have been proposed by oilsands
operators
16

17. Land and Wildlife
Restoration of wetlands continues to be a major
challenge and may never occur
• Peatlands likely to be permanently lost after mining
• As of 2011, approved mining production is expected to
result in a loss of approximately 28,000 hectares of
peatland
• Alberta has no wetland policy to prevent wetland loss in
northeastern Alberta
17

18. Land and Wildlife
In situ developments may affect a much larger
area than oilsands mining
• In situ potential 30X larger than mineable region
• More GHG-intensive than mining
• Results in significant landscape fragmentation
18

19. Land and Wildlife
Woodland caribou herds are declining in the
oilsands and are on track to be extirpated
• Local extinction likely in 30 years
• Federal recovery strategy identifies 65% intact habitat
target
• Undisturbed caribou habitat in Northeastern Alberta = 24%
19

20. Conclusions
• Significant opportunities to address oilsands
mismanagement
• Need a greater emphasis on management vs.
communications
• Pace and scale need to slow to accommodate
new policy solutions
• Role of technology limited without regulatory
drivers
20

21. Economics
Taxpayers may foot the bill for cleanup of
oilsands mines
• Operators not responsible for 100% of cost of cleanup
• Little reclamation security and protection for Albertans over
life of mine until the end
21

22. Economics
Relying on the volatile profits from oilsands
projects to fund essential services creates
financial risks for both the private and public
sector
• Oil grown from 18% to 46% of total Canadian commodity
production in past 15 years
• Price of oil fluctuates widely
• Oilsands producers have a narrow price window in which
to operate
• Oilsands roller coaster unreliable means to fund social
programs and provide ongoing revenue
22

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24. Climate and Air
Forecasted growth in oilsands will present very
serious air pollution challenges in the Wood
Buffalo Region
• Approved production is almost triple current operating
levels
• Modeled predictions for NO2 levels already exceed
Alberta’s air quality limits
24

25. Land and Wildlife
The boreal forest will not be restored to its
native state following mine closure
• Objective is equivalent land capability vs. pre disturbance
state
• Forest uplands and end pit lakes vs. peatlands and old
growth forests
• Only 0.1% of total area disturbed by oilsands mining
certified as reclaimed
25

26. Land and Wildlife
26
Oilsands disturbance vs. reclamation from 1987-2008
Source: Alberta Environment

27. Land and Wildlife
Oilsands development threatens to harm
millions of birds through habitat fragmentation
and destruction
• Regional bird populations currently healthy
• Mining may impact the breeding habitat for 280,000 to 3.6
million birds over 20-40 year period
• In situ development could impact as many as 14.5 million
birds
27

28. Economics
The costs and benefits of oilsands development
are not spread evenly across Canada
• AB expected to reap 94% of GDP impacts from oilsands
development
• Jobs created by oilsands in next 25 years – 86% will
remain in AB
• Manufacturing sector declining while natural resource
sector booming
28