Oilsands and the environment: Dark waters

How the plight of 500 waterfowl in the oilsands highlights a much bigger challenge.

From a bird’s-eye point of view, it probably looked like a good place to rest. On April 28, a flock of waterfowl — mostly mallards — decided to take a breather on a large lake in Northern Alberta. But not just any lake: it was the Aurora Settling Basin, a tailings pond used by oilsands giant Syncrude Canada Ltd., one of this country’s largest producers of crude oil. There, an estimated 500 birds were embraced by waste hydrocarbons, weighed down and drowned in an oily grave.

This wasn’t supposed to happen. From spring to fall, Syncrude usually mounts propane-fired noise cannons around its ponds — they sound like guns. It also deploys scarecrows. The system successfully restrained avian mortality for three decades, but extreme winter conditions delayed its deployment at Aurora this spring. “Every employee I’ve spoken to or encountered feels horrible this has happened, and there’s huge organizational resolve to ensure this never happens again,” says Syncrude spokesman Alain Moore. Internal and government investigations are underway.

Tailings management requires constant vigilance, and more is at stake than birds. The ponds in northern Alberta have grown considerably since Sun Oil, the original oilsands operator now known as Suncor Energy Inc. (TSX: SU), opened the first in the late 1960s. Now the largest bodies of water in the region, there are three at Syncrude, nine at Suncor and one at Shell’s Albian Sands — covering a total area of about 65 square kilometres.

The ponds’ scope is awe-inspiring. If you jogged a lap around Syncrude’s largest, the Mildred Lake Settling Basin, you’d complete a half-marathon. Its retaining walls are often cited as being among the world’s largest dam structures, holding back 220 million cubic metres of tailings. And the ponds are growing. “If you look at all the current and proposed tailings ponds, that would take you up to 220 square kilometres,” says Simon Dyer, oilsands program director for the Pembina Institute, an environmental organization. The Alberta Chamber of Resources observed a few years ago that tailings storage practices “pose a risk to the oilsands industry” and were likely to come under increased scrutiny. The duck deaths helped ensure that. Beyond the evident risk they present to wildlife, the ponds also release into the air volatile organic compounds like benzene. And there is the constant threat of leakage and structural failure. Perhaps the greatest concern, though, is what happens to the ponds after they’ve finished serving their purpose. Canada is hardly wanting for examples of mines and other industrial operations abandoned by owners. In Sydney, N.S., ponds contaminated by nearly a century of steel production remain filled with sediments thoroughly contaminated by coal. In northern Saskatchewan, remediation of long-abandoned uranium mines drags on. Some fear the same will happen in the oilsands. “When industry is finished digging out the oil, it will leave,” Environmental Defence Canada, a non-governmental organization, predicted in a report released in February. “And as we know from similar operations in other parts of the country, Canadians will be left with the toxic legacy.” That’s a disturbing thought. The scale of oilsands operations dwarfs any other industry this country has ever seen. But partly as a result of experiences like the Sydney tar ponds, governments have introduced new rules aimed at preventing abandonment. Are environmentalists engaged in needless fear mongering — or can the Canadian taxpayer look forward to the mother of all environmental liabilities?

To understand how things sometimes go awry, consider what happened in the town of Amherstburg, Ont. There, near the shores of the Detroit River, rests a body of water known as the Soda Ash Settling Basin — SASB, for short. It contains the dreck left over from decades of chemical manufacturing. Near the end of the First World War, a manufacturer of sodium carbonate — commonly known as soda ash — set up shop there. Soda ash is used in the making of glass and soaps, and to bleach fabrics and paper. Later, the site also made hydrofluoric acid and calcium sulfate (commonly known as gypsum). Most recently, until 2005, calcium chloride — used as a de-icer and dust suppressant — was made there.

At first, the inevitable byproducts, such as liquid wastes containing sulphates, magnesium and carbonates of calcium, were dumped directly into the river. Later, they were diverted to an old quarry and received some treatment before discharge. Then came the SASB. Constructed in the 1980s, it arose from a straightforward underlying principle: effluent dumped into it gradually became clearer as gravity worked its magic. The somewhat clarified effluent was then pumped or siphoned out via a drain; from there, it entered a creek that emptied into the river. The SASB’s dikes stand more than 14 metres high, and the basin can hold up to 9.7 million cubic metres. Two companies used it: its owner, General Chemical Canada Ltd., and neighbouring Honeywell ASCa Inc.

Back in 1997, Ontario’s Ministry of the Environment issued a provisional certificate of approval to General Chemical to expand the SASB. This included a plan to cap the pond with gypsum once the company was finished with it. Following the “polluter pays” principle, the certificate required General to provide assurances that money would be available to fund the SASB’s reclamation, even if the company were later unwilling or unable to fund it. So General provided a bond of $2.4 million, later increased to $3.4 million in 2002. Those amounts were based on assumptions that General could obtain gypsum from Honeywell on the cheap, and that the SASB would be retired decades in the future. Regulators often rely on remediation cost estimates made by the companies themselves — which have every incentive to guess low. Here, the ministry understood all along that a few million dollars wouldn’t cover the cleanup costs. It nevertheless approved the arrangement.

The test came in 2005, when General Chemical ceased operations and filed for court protection from its creditors. That’s when the environment ministry took a closer look. Government engineers and bureaucrats sent letters to the company, explaining that given the likelihood the SASB would close prematurely, General would likely need to post more financial assurance. After reviewing estimates provided by the company’s own consultants, ministry engineer Ian Parrot figured reclaiming the SASB could cost as much as $64 million.

It was too late for such talk. Unable to repair its finances, the company tumbled into receivership. Ever since, lawyers and engineers have squabbled about what to do about the SASB, and who’s going to pay for it. One thing seems certain: it won’t be General Chemical. The ministry wants proceeds from the liquidation of the company to be spent on the SASB. But it’s not the only creditor grasping at the remaining assets; pension administrators, distressed asset investors and others are also circling. So far the ministry has enjoyed little success. The Superior Court of Ontario rejected its bid to appoint its own receiver. And after the ministry lost a subsequent appeal, it watched helplessly as another creditor pocketed $3.75 million.

Observers now widely assume Ontario taxpayers will be left with most of the costs — assuming a cleanup ever takes place. Doing nothing, however, is not an attractive option. Minor structural problems have already developed that could eventually result in a failure of the berm and dikes. On-site monitoring revealed that the SASB has been leaking chloride into groundwater in amounts exceeding regulatory limits. It will be an environmental headache for years.

Northern Alberta’s tailings ponds make the SASB look like a children’s wading pool.

The oilsands are a sludge of clay, sand and water. The valuable ingredient — just 10% or so — is viscous, oil-rich bitumen. Bitumen is separated out using hot water, leaving a slurry of waste containing clay, sand, residual bitumen, salt and various toxic chemicals and solvents. There’s a lot of it: according to the Alberta Chamber of Resources, the industry generates roughly six cubic metres of sands and 1.5 cubic metres of mature fine tailings into ponds for every cubic metre of synthetic crude oil it produces. There are also huge volumes of water extracted from the Athabasca River.

It’s all gotta go somewhere. Over the decades, oilsands operators constructed earthen retaining structures from overburden removed during mining. Tailings gush into these ponds from pipes three-quarters of a metre wide. Gradually, the silt, hydrocarbons and clay settle to the bottom and thicken. Clarified water is recycled and used to extract more bitumen. Nobody intended the ponds to become as big as they did. Early permits assumed they would be decommissioned after a decade or less of use. But facing uncertainties about early reclamation strategies, the province gave operators breathing room. “It wasn’t exactly certain how well [reclamation] would work,” says Preston McEachern, head of Alberta Environment’s science, research and innovation section, “so we were allowing companies like Syncrude and Suncor to continue to use these fluid tailings ponds without reclaiming them.” With oil hitting US$130 a barrel, it’s easy to forget that all booms eventually come to an end. But one day, presumably in the distant future, oilsands operators will squeeze the last commercially accessible bitumen from northern Alberta. What will become of the tailings ponds? In the past, mining companies have generally preferred “walkaway” reclamations — spending the few years after mine closure engaged in limited, cheap restoration work. Perhaps the most encouraging aspect of what’s happening in the oilsands is that operators must reclaim land as they go. Syncrude has restored 4,500 hectares, which approaches one-quarter of the total land it has disturbed. Over the past three years, it has spent more than $73 million on reclamation work. Earlier this year, it became the first operator in the oilsands to have reclaimed land certified as such by the provincial government.

Provincial standards require decommissioned land be restored “to a state equivalent to the capability that existed before disturbance.” That must include “acceptable” soil, vegetation, animals and other characteristics. Critics deride such vague wording. But McEachern explains that individual permits specify restoration must be to land types found in boreal forest. “You may not have bog or fen, and you may not have it in the proportion that was there before — and most likely won’t,” he explains. “But what you will have are forest types or grassland types that occur in the boreal forest.” Once certified by Alberta as reclaimed, the land reverts to the Crown. No company has yet reclaimed a pond, but there are several proposals. One is “water capping,” which involves layering fresh water over tailings to form a lake. Syncrude says its pilot projects on a few hectares prove that such lakes evolve into natural ecosystems, and can support fish, plants and animals within two or three years. “Tailings water allowed to sit becomes quite good water,” says Don Thompson, Syncrude’s general manager of external and regulatory affairs, “to the extent that we now have insects and fish and all kinds of stuff living in it, just like what you might expect in a natural lake.”

One great challenge is separating water from the other detritus. Left to their own devices, finer particles could take as long as a century or more to settle. Operators add gypsum (a byproduct of scrubbing sulphur from effluent stacks), which accelerates the process tenfold. The so-called consolidated tailings produced by this technology — pioneered by Suncor in the 1990s — are stable enough to be used as fill in decommissioned mine pits. Syncrude, meanwhile, is experimenting with “thickened tailings,” which involve using centrifuges and flocculents to turn tailings into a soft clay-like material. The company says the resulting paste can also be used immediately in finished landscape, and it is testing the technology at the Aurora mine.

Perhaps the most promising solution is to avoid creating tailings ponds altogether. In situ production — the extraction of bitumen buried too deep for open pit mining — doesn’t require them. And for mining-style operations, a nascent technology called dry-stackable tailings removes water without the need for ponds. Syncrude’s Thompson says “directionally, it’s a good thing,” but is unsure about its prospects at existing operations. “Retrofitting technology into an existing operation is sometimes not that easy,” he says.

What will reclaimed ponds look like? Brad Bellows, a spokesman for Suncor, says it will be only superficially different from the boreal forest that existed before. “In the case of a mine or a pond, the terrestrial contours may well be different,” he says. “And some of the vegetation, although it will all be native, will not be exactly as it was.”

Not everyone buys the industry’s assurances, however. Pembina’s Dyer says operators have already admitted that reclaimed land will be strikingly different. “About 50% of northern Alberta is peatland,” he says. “It takes thousands of years to develop that many metres of peat. Research is ongoing, but there’s an expectation that there will be a permanent loss of peatlands from mined areas.” “The tailings ponds are a real sore spot,” says Matt Price, a project manager for Environmental Defence. “It’s this 19th-century approach, saying, ‘We don’t know what we’re going to do, so let’s pump all this toxic stuff into a pond and hope we can deal with it.’” The organization claims that wetlands formed from oilsands effluent have already been shown incapable of supporting bird and amphibian populations. Alberta Environment has greater confidence, and for several years has been pushing operators to accelerate reclamation efforts. “With the recent growth in oilsands development, we have basically, as a government, put our foot down,” says McEachern, “requiring companies to meet the timelines that they proposed in their original applications.”

Suncor has already begun remediating Pond No. 1 through an older technique called “densified tails,” which involves pumping sand to the pond’s bottom while recycling water from the top. “It’s drying out now,” reports Bellows. “The pond surface has shrunk considerably. There’s large, dry beachy areas around the pond.” The company expects the last of the water to have vanished by 2010, leaving a dry surface. “At that point we would begin putting on topsoil and vegetation,” he says. It will be the first reclaimed tailings pond in the oilsands. Pond Nos. 5 and 6 are to follow, using consolidated tailings. Syncrude, meanwhile, is filling a decommissioned mine pit with fine tailings extracted from its Mildred Lake basin. Reclamation work there is scheduled to begin in 2012. But what of the costs? Companies admit they don’t know. Nevertheless, money has been set aside. Alberta requires operators to estimate reclamation costs and provide deposits for the full amount to the Environmental Protection Security Fund. The money remains until the reclamation is complete to the government’s satisfaction. As of March 31, 2007, the fund stood at $468 million. Is that enough? Dyer calculates that the industry’s guarantees amount to about $10,000 per hectare. In forestry, “you could barely plant trees after you’d harvested a cut block for $10,000 a hectare, let alone deal with the issues of tailings ponds and moving all that material,” he says. Reclamation costs for various kinds of disturbance differ widely — but between 2002 and 2006, Syncrude’s reported reclamation costs averaged nearly $47,000 per hectare.

Environmental Defence is dubious. It points to the Sydney Tar Ponds, which cover just a square kilometre. In 2004, the federal and Nova Scotia governments signed a $400-million agreement to clean up the site over 10 years. Dyer, too, is concerned. “I think it would be incumbent on the Alberta government and industry to demonstrate that taxpayers weren’t at risk here,” Dyer concludes, “but I don’t think they’ve done that.” For its part, Alberta Environment is considering changes to mine liability planning. “[That] of course includes reclamation certification, and evaluating whether we should be enhancing the rates, basically,” says McEachern. Thompson, for one, isn’t worried that Canadians will be left holding the bag, and points to the resources of the companies operating there. “ The reality is Syncrude isn’t some small gravel pit operator somewhere,” he says. “It’s backed by some of the largest companies in Canada. At the end of the day, the owners’ good graces and financial wherewithal are probably the biggest single security the province has.” With the failure of Syncrude’s bird protection program still fresh in memory, some stakeholders may remain unconvinced. Even the best-laid plans don’t always pan out.