Nick Snow
Washington Editor
Officials from the Alberta agency that regulates oil and gas visited Washington, DC, in early May to deliver a basic message: Production of oil from the Canadian province's substantial oil sands won't be allowed to destroy the environment there.
Alberta has a comprehensive, robust oil and gas regulatory environment that also is flexible, explained Dan McFayden, a petroleum engineer who chairs the province's Energy Resources Conservation Board.
"We're committed to continuous improvement because we care about our legacy," he said during a May 2 presentation at the US Energy Association.
He and Terry Abel, executive manager of ERCB's oil sands and coal branch, said they wanted to correct misconceptions about Alberta's approach to developing the 170 billion bbl of bitumen in its oil sands while protecting the environment.
They said ERCB's mission is to ensure that the discovery, development, and delivery of Alberta's energy resources occurs safety, fairly, responsibly—and in a manner that's in the public interest.
Only about 4,800 sq km of the oil sands, an area about one fifth of the size of Houston, can be mined, McFayden said. The rest will need to be recovered with in-situ processes, which have substantially fewer surface impacts, he added.
"Right now, about two thirds of what is produced comes from mining," he said. "We expect that to change in the next 5 years because most investments now are in developing in-situ processes. Mining will continue to grow, but in-situ will become dominant."
Before approval
While mining looks dramatic, sites are reclaimed over a project's lifetime, according to McFayden. Before a project is approved, it must complete an environmental impact assessment and assess its cumulative effects, consult with other stakeholders, and undergo a complete review by ERCB staff experts, he said.
A project also must obtain approvals from the province's environmental, sustainable resource, and other appropriate agencies. "Once a project is approved, our work is just beginning," said McFayden.
ERCB conducted about 120 oil sands mine inspections in 2010 and more than 10,000 in-situ facility inspections since 2007, he noted.
"Our inspectors use a risk-based approach where companies with a history of compliance are scrutinized more closely," he said, adding that the industry has been generally responsible, with 98.6% compliance.
ERCB adjusts its existing regulations and adopts new ones as problems emerge, Abel observed.
"The financial security program for oil sands mines was originally set up with a levy on production that probably was insufficient," he said.
Alberta and the industry are collaborating on a program that won't drain operators' capital in their projects' early stages but could collect more later if compliance falls short, Abel said.
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