40th PARLIAMENT,
2nd SESSION
Standing Committee on Environment and Sustainable Development
EVIDENCE
CONTENTS
Wednesday, May 13, 2009
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The Vice-Chair (Mr. Francis Scarpaleggia (Lac-Saint-Louis, Lib.)) |
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Mr. Don Thompson (President, Oil Sands Developers Group) |
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Mr. Stuart Lunn (Imperial Oil Limited) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ian Mackenzie (Golder Associates) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Fred Kuzmic (Regional Aquatics Monitoring Program) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Greg Stringham (Vice-President, Markets and Fiscal Policy, Canadian Association of Petroleum Producers) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Justin Trudeau (Papineau, Lib.) |
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Mr. Fred Kuzmic |
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Mr. Justin Trudeau |
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Mr. Fred Kuzmic |
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Mr. Justin Trudeau |
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Mr. Don Thompson |
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Mr. Stuart Lunn |
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Mr. Justin Trudeau |
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Mr. Stuart Lunn |
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Mr. Justin Trudeau |
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Mr. Stuart Lunn |
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Mr. Justin Trudeau |
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Mr. Stuart Lunn |
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Mr. Justin Trudeau |
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Mr. Stuart Lunn |
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Mr. Justin Trudeau |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Christian Ouellet (Brome—Missisquoi, BQ) |
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Mr. Don Thompson |
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Mr. Christian Ouellet |
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Mr. Don Thompson |
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Mr. Christian Ouellet |
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Mr. Don Thompson |
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Mr. Christian Ouellet |
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Mr. Don Thompson |
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Mr. Stuart Lunn |
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Mr. Christian Ouellet |
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Mr. Don Thompson |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan (Edmonton—Strathcona, NDP) |
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Mr. Don Thompson |
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Mr. Stuart Lunn |
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Ms. Linda Duncan |
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Mr. Stuart Lunn |
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Ms. Linda Duncan |
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Mr. Ian Mackenzie |
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Mr. Stuart Lunn |
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Ms. Linda Duncan |
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Mr. Stuart Lunn |
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Ms. Linda Duncan |
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Mr. Don Thompson |
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Mr. Fred Kuzmic |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa (Langley, CPC) |
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Mr. Don Thompson |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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Mr. Fred Kuzmic |
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Mr. Mark Warawa |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa |
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Mr. Don Thompson |
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Mr. Ian Mackenzie |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ian Mackenzie |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ian Mackenzie |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ian Mackenzie |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Fred Kuzmic |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Chris Fordham (Manager, Strategy and Regional Integration, Suncor Energy Inc.) |
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The Acting Chair (Mr. Blaine Calkins (Wetaskiwin, CPC)) |
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Mr. Calvin Duane (Manager, Environment, Canadian Natural Resources Ltd) |
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The Acting Chair (Mr. Blaine Calkins) |
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Mr. Matt Fox (Senior Vice-President, ConocoPhillips Canada) |
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The Acting Chair (Mr. Blaine Calkins) |
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Mr. Michel Scott (Vice-President, Government and Public affairs, Devon Canada Corporation) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. John D. Wright (President and Chief Executive Officer, Petrobank Energy and Resources Ltd.) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Justin Trudeau |
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Mr. Chris Fordham |
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Mr. Justin Trudeau |
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Mr. Chris Fordham |
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Mr. Justin Trudeau |
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Mr. Chris Fordham |
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Mr. Calvin Duane |
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Mr. Justin Trudeau |
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Mr. Calvin Duane |
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Mr. Justin Trudeau |
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Mr. Calvin Duane |
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Mr. Justin Trudeau |
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Mr. Calvin Duane |
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Mr. Justin Trudeau |
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Mr. Calvin Duane |
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Mr. Justin Trudeau |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Justin Trudeau |
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Mr. Matt Fox |
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Mr. Justin Trudeau |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Christian Ouellet |
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Mr. Michel Scott |
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Mr. Christian Ouellet |
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Mr. Michel Scott |
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Mr. Christian Ouellet |
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Mr. Michel Scott |
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Mr. Christian Ouellet |
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Mr. Michel Scott |
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Mr. Christian Ouellet |
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Mr. John D. Wright |
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Mr. Christian Ouellet |
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Mr. John D. Wright |
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Mr. Christian Ouellet |
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Mr. John D. Wright |
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Mr. Christian Ouellet |
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Mr. John D. Wright |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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Mr. Michel Scott |
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Ms. Linda Duncan |
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Mr. Michel Scott |
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Ms. Linda Duncan |
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Mr. Michel Scott |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Mr. Calvin Duane |
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Ms. Linda Duncan |
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Mr. Matt Fox |
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Ms. Linda Duncan |
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Mr. Matt Fox |
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Ms. Linda Duncan |
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Mr. Matt Fox |
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Ms. Linda Duncan |
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Mr. Matt Fox |
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Ms. Linda Duncan |
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Mr. Matt Fox |
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Ms. Linda Duncan |
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Mr. Chris Fordham |
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Ms. Linda Duncan |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Calvin Duane |
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Ms. Linda Duncan |
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Mr. Calvin Duane |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Calvin Duane |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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M. Peter Braid (Kitchener—Waterloo, PCC) |
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Mr. Chris Fordham |
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Mr. Peter Braid |
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Mr. Chris Fordham |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Peter Braid |
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Mr. Calvin Duane |
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Mr. Peter Braid |
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Mr. Chris Fordham |
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Mr. Peter Braid |
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Mr. Matt Fox |
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Mr. Michel Scott |
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Mr. Peter Braid |
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Mr. John D. Wright |
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Mr. Peter Braid |
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Mr. John D. Wright |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Matt Fox |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer (Director, Oil Sands Program, Pembina Institute) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Tony Maas (Senior Policy Advisor, Fresh Water, World Wildlife Fund Canada) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Barry Robinson (Staff Lawyer, Ecojustice Canada) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ken Chapman (Advisor, Canadian Boreal Initiative) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ken Chapman |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Justin Trudeau |
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Mr. Simon Dyer |
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Mr. Justin Trudeau |
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Mr. Simon Dyer |
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Mr. Justin Trudeau |
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Mr. Tony Maas |
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Mr. Justin Trudeau |
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Mr. Barry Robinson |
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Mr. Justin Trudeau |
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Mr. Simon Dyer |
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Mr. Justin Trudeau |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Christian Ouellet |
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Mr. Tony Maas |
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Mr. Christian Ouellet |
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Mr. Tony Maas |
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Mr. Christian Ouellet |
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Mr. Ken Chapman |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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Mr. Simon Dyer |
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Ms. Linda Duncan |
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Mr. Simon Dyer |
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Ms. Linda Duncan |
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Mr. Simon Dyer |
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Ms. Linda Duncan |
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Mr. Simon Dyer |
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Ms. Linda Duncan |
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Mr. Barry Robinson |
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Ms. Linda Duncan |
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Mr. Simon Dyer |
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Ms. Linda Duncan |
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Mr. Barry Robinson |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa |
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Mr. Simon Dyer |
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Mr. Mark Warawa |
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Mr. Simon Dyer |
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Mr. Mark Warawa |
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Mr. Simon Dyer |
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Mr. Mark Warawa |
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Mr. Simon Dyer |
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Mr. Mark Warawa |
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Mr. Simon Dyer |
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Mr. Mark Warawa |
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Mr. Simon Dyer |
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Mr. Mark Warawa |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Barry Robinson |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Barry Robinson |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Jeff Watson (Essex, CPC) |
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Mr. Tony Maas |
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Mr. Barry Robinson |
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Mr. Jeff Watson |
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Mr. Ken Chapman |
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Mr. Jeff Watson |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Ken Chapman |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Simon Dyer |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Barry Robinson |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Blaine Calkins |
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Mr. Tony Maas |
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Mr. Blaine Calkins |
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Mr. Tony Maas |
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Mr. Blaine Calkins |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Blaine Calkins |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Tony Maas |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Peter Braid |
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Mr. Tony Maas |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Jeff Watson |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Glen Semenchuk (Executive Director, Cumulative Environmental Management Association) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Justin Trudeau |
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Mr. Glen Semenchuk |
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Mr. Justin Trudeau |
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Mr. Glen Semenchuk |
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Mr. Justin Trudeau |
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Mr. Glen Semenchuk |
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Mr. Justin Trudeau |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Christian Ouellet |
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Mr. Glen Semenchuk |
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Mr. Christian Ouellet |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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Ms. Linda Duncan |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa |
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Mr. Glen Semenchuk |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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Mr. Glen Semenchuk |
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Mr. Peter Braid |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. J. Owen Saunders (Executive Director, Canadian Institute of Resources Law, University of Calgary, As an Individual) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. J. Owen Saunders |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mrs. Arlene Kwasniak (Professor, Faculty of Law, University of Calgary, As an Individual) |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Justin Trudeau |
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Mr. J. Owen Saunders |
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Mr. Justin Trudeau |
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Mr. J. Owen Saunders |
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Mr. Justin Trudeau |
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Mrs. Arlene Kwasniak |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Christian Ouellet |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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Mr. J. Owen Saunders |
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Ms. Linda Duncan |
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Mr. J. Owen Saunders |
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Ms. Linda Duncan |
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Mrs. Arlene Kwasniak |
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Ms. Linda Duncan |
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Mr. J. Owen Saunders |
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Ms. Linda Duncan |
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Mr. J. Owen Saunders |
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Mrs. Arlene Kwasniak |
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Ms. Linda Duncan |
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Mrs. Arlene Kwasniak |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Ms. Linda Duncan |
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Mrs. Arlene Kwasniak |
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Ms. Linda Duncan |
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Mrs. Arlene Kwasniak |
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Mr. J. Owen Saunders |
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Ms. Linda Duncan |
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Mr. J. Owen Saunders |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. Mark Warawa |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mrs. Arlene Kwasniak |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mrs. Arlene Kwasniak |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mrs. Arlene Kwasniak |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mr. J. Owen Saunders |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
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Mrs. Arlene Kwasniak |
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The Vice-Chair (Mr. Francis Scarpaleggia) |
CANADA
Standing Committee on Environment and Sustainable Development
|
EVIDENCE
Wednesday, May 13, 2009
[Recorded by Electronic Apparatus]
* * *
(0810)
[English]
The Vice-Chair (Mr. Francis Scarpaleggia (Lac-Saint-Louis, Lib.)):
Good morning to our witnesses. Thanks very much for being here today. We really look forward to what you have to tell us.
The first two days of our trip out west have been very informative, but our trip isn't over. We still have a lot to learn, so we're looking forward to what you have to say.
I'm told that you have a presentation plan worked out. Whoever wishes, then, please start.
Mr. Don Thompson (President, Oil Sands Developers Group):
Good morning, Mr. Chair and panel.
I'd like to express our appreciation for your taking the time to listen to us, for inviting us here, and for the time you spent in Fort McMurray viewing our operations and the oil sands.
I'm Don Thompson, president of the Oil Sands Developers Group. I'd like to start by introducing our panel. Stuart Lunn is with Imperial Oil. Mr. Ian Mackenzie is with Golder Associates. Mr. Fred Kuzmic is with Shell Canada. Mr. Greg Stringham is with the Canadian Association of Petroleum Producers.
Water is clearly a critical aspect of the production process used for bitumen extraction and recovery, which we'll talk to in a bit. In reality, Canada’s oil sands use a very small percentage of available water, and the water used is highly regulated. For example, oil sands use is currently less than 1% of the mean annual flow of the Athabasca River, and there are procedures and processes in place that cap that withdrawal during low-flow periods
Regulations also do not permit the release of any untreated oil sands process-affected water, and ongoing aquatic monitoring has not shown impacts to the lower Athabasca River aquatic ecosystem associated with oil sands development.
Oil sands projects recycle a high percentage of the water they use, ranging from 80% in surface mining to over 95% in the in situ industry. In fact, the in situ side of the oil sands industry is shifting increasingly from the use of fresh water to the use of saline water, and of course none of that is from the Athabasca River.
The other reality is that pumping water, storing it, and treating it is a key cost of production. We have every incentive to minimize our water use, and that is important to the economics of oil sands production.
Recently there have been calls on both sides of the border to strike a balance between energy, environment, and economy. In my view, that balance is being struck today in the oil sands.
On the environment, local air quality is excellent and is being managed well. Greenhouse gas emissions are low and are a small percentage of Canadian and global totals. The use of water is being reduced through improved and increasing technology. As I've already mentioned, a high percentage of the water we use is recycled, and the in situ industry is moving increasingly to using non-drinkable water.
In terms of the land, minimization of impact has always been a watchword. Of the 530 square kilometres that have been disturbed over 40 years of surface mining, 65 square kilometres are currently under active reclamation. Advanced technology is being developed and innovation is being applied to all aspects of environmental management.
The reality is that the oil sands are a key strategic Canadian resource. They provide today, and will provide increasingly in the future, strong security of supply to Canada. They are a major component of this country's future energy mix.
On the economic side, oil sands economic impacts are felt across this country. Between 2000 and 2020, oil sands development has the potential to generate at least $885 billion in total economic impact, with $123 billion in royalty and tax revenues for Canada's federal and provincial governments. It's important to understand that for each permanent oil sands-related job, nine additional direct, indirect, and induced jobs are created in this country.
Yesterday I was in Drummondville, Quebec, where I met with the Quebec branch of the Canadian Manufacturers and Exporters and a number of steel metal fabricators, mining equipment providers, and the like that support this industry. In fact Suncor, which presented with me, demonstrated that they had 199 vendors in Quebec and almost $200 million of expenditures last year.
It's also important for people to realize that my members have workforces on their sites from coast to coast, from the far east to the west, and the oil sands represent people and industries coming together in Fort McMurray. The oil sands are a national endeavour.
On how oil sands fit into the future energy mix, you should know that global economic growth will require more energy of all kinds. In North America, energy use grows by about 1.5% a year, driven by population growth, lifestyle enhancements, and offset to a small degree by efficiency. Despite growth in the use of renewables and other forms of energy, oil remains an important long-term component of the global energy mix.
We will be needing all forms of energy because of growth in global population. But the reality is that oil sands resources are a vital part of the global petroleum supply. In Canada we are privileged to have the second-largest crude oil reserves in the world--second only to Saudi Arabia--at 178 billion barrels. But the reality is that 97% of those, or 173 billion barrels, are in the oil sands. Stated another way, in other countries and locations where crude oil is accessible, a full 87% of the world's known oil reserves are currently in state-owned or state-controlled locations held by countries such as members of OPEC, Russia, and the like. Only 13%, or one barrel in six, is openly accessible to international oil companies, and half of that is in Canada’s oil sands.
Our conventional production is declining by about 4.5% per year and will continue to do so. That gap has to be filled by oil sands and is being filled by oil sands. But the other reality is that the economic turmoil in recent times has flattened that line. You will see in the next forecast that the growth rate from 2008 to 2012 will flatten. So oil sands are critical to this country's future energy security. Oil sands exports will also be a key component of the balance of payments future of this country.
I know that on your tour you witnessed both kinds of oil sands production technologies, so I will not dwell on that. I'm sure you saw mining, trucking, and shovel operations; however, I draw your attention to the fact that 80% of the reserve base I spoke of must be produced by in-ground or in situ technology where there is no mine, no tailings ponds, and no water from the Athabasca River.
With that, I'll turn the floor over to Mr. Lunn, who will talk about water quantity issues.
(0815)
Mr. Stuart Lunn (Imperial Oil Limited):
I'd like to spend a little bit of time talking about the perspective of water availability in the province of Alberta, and then I'll talk specifically about water use in the oil sands industry, both in surface mining and in the in situ industry.
Each year in the province, approximately 130 billion cubic metres of water flow through the rivers of Alberta, and 85% of this water flows north. By far the largest rivers in the province are the Peace and the Athabasca rivers, joining to become the Slave River, leaving the province to the north. In contrast, in the province 88% of the water demand is in the agricultural areas and the major population centres in the south half of the province.
All the oil sands production is in the northern basins. The mining oil sands are all within the Athabasca River basin, and in situ oil projects are distributed among the Peace, the Athabasca, and the Beaver river basins.
Of the 130 billion cubic metres on average available in the rivers of Alberta each year, the Alberta government has licensed or allocated just under 10 billion cubic metres per year to all sectors within the province. The oil and gas industry accounts for about 7% of this provincial allocation--on here, the yellow portion of the bar--after the large sectors of agriculture, commercial, and municipal use.
Most of this allocation, unlike the other sector use, is allocated or licensed for oil sands mining in the Athabasca River basin, about 70% of that 7%. The rest of the oil and gas sector uses the remaining water, and comparatively small volumes are used for in situ oil sands production.
It's noteworthy that criticism of oil sands water use often fails to recognize that the use is in the northern basins, where the water supply is much more plentiful and water use is a small percentage of natural supply.
Focusing on that with a little more detail, oil and gas allocations represent 2.2% of the allocations of the natural flow of the Athabasca River, 0.04% of the natural average flow in the Peace River, and 3.7% of water availability in the Beaver River basin. It's worth noting that the actual water use is often less than the allocation, but concerns and water shortages in central and southern Alberta have led to misperceptions about water supply in the north for the oil sands.
If you take a quick look at the chart, there are three bars. The axis represents billions of cubic metres of water. The blue bar is the average natural supply in the river basin, the red bar represents the total amount of water allocated in that basin for use in all sectors, and the yellow bar represents the amount of water allocated for use in the oil and gas sector. What we can quickly see is that the allocations in the south half of the province, in the North Saskatchewan and South Saskatchewan River basins, represent a large percentage of natural supply, some 30% of the North Saskatchewan and nearly 60% of the South Saskatchewan.
In comparison, including forecast growth in the oil sands industry, the Athabasca, Peace, and Beaver river basins will remain among the least utilized basins in the province.
I'll now focus on the oil sands mining industry. Over the last several years, the Oil Sands Developers Group has been working on forecasting how much water might be required from the Athabasca River. Both lines on the chart represent aggressive growth cases, the purpose being to try to determine how much water might be required from the river if projects go forward as envisioned and if future projects go forward as envisioned.
The lower case represents 2.5 million barrels of oil per day, and the second case is 3.5 million barrels of oil per day, which is approximately four times current production rates. The left axis shows the absolute amounts of water being withdrawn from the Athabasca River, and the right axis shows the percentage that this withdrawal represents of the mean annual flow at Fort McMurray. We can see for those two growth cases that the industry use of water is expected to rise to between 10 and 15 cubic metres per second, which represents about 1.5% to 2.5% of the flow of the Athabasca River. We also see that it peaks, in the most aggressive case, at around 16 cubic metres per second, or just under 2.5% of the mean flow. And I'll be talking about that number again.
(0820)
So why is there so much concern about water use from the Athabasca River, given the very low percentages of water that are allocated, and the low percentages of water that are being used now, and will be used in the future?
This is mostly because the Athabasca River is ice-covered for five to six months per year, and the winter flows are about 10 times lower than the open-water flows. Also, the Athabasca River's flows are not regulated by dams. The concerns very much focus on withdrawals during low winter flow weeks, and especially in dry periods during those low winter flow weeks.
It's worth mentioning that when the Athabasca River joins the Peace River beyond Lake Athabasca to become the Slave River, the low flows in that river system are not as much of a concern. This is because the Peace River has the W.A.C. Bennett Dam in British Columbia that takes some high summer flows and distributes them for hydro during the winter months, creating higher-than-natural flows in the Peace and Slave rivers—by about 700 cubic metres per second. If you compare that with the 16 cubic metres per second projected for the oil sands industry, we see that the low-flow concerns are really a concern only for the Athabasca River.
These low flows have been regulated by the federal and provincial governments, with water restrictions during these low-flow periods capping the cumulative amounts of water available to the oil sands industry. This is in the Water Management Framework: Instream Flow Needs and Water Management System for the Lower Athabasca River.
This framework was released in 2007, after seven years of multi-stakeholder research, resulting in a very protective and conservative framework. It applies to segments four and five of the lower Athabasca River, and these are the segments where we find the oil sands mining operations. It limits water withdrawals by the oil sands operators during low-flow winter periods to between eight and 15 cubic metres per second, depending on the river flow and the time of the year.
This process is being refined in a multi-stakeholder process, taking advantage of additional research on the river, with a phase two water management framework anticipated for implementation at the beginning of 2011.
So what does this mean? Given the projections of oil sands mining growth to a peak of 16 cubic metres per second, and given the protection provided by the lower Athabasca River water management framework, what does this mean for withdrawals and natural flows?
On this next slide, we've taken the driest period on record at the Fort McMurray gauge, as contained in the period of 1998 to 2004. The natural flows are the blue curve on the slide. You can see the low winter flows, and you can see the high summer flows and variability of the flows on the hydrograph. The other curve—which is difficult to make out—is the amount of water that will remain in the Athabasca River if that growth case of 16 cubic metres per second comes to pass.
With the protection provided by the water management framework, we see that the difference between that rate, even for a growth case during a very dry period, and the natural flow of the Athabasca River is almost imperceptible. However, we are concerned about those low winter flow periods, and research is ongoing in that area.
There have been some suggestions that the Athabasca River is drying up in the winter. This very much depends on the timeframes that we look at. If we take a look at the high-flow periods from 1970 to 2004 at the Fort McMurray gauge, we can see there's quite a steep declining trend. It's a little difficult to see on the chart, but if you take a look at the full record of flow history on the Athabasca River at Fort McMurray, you see that from 1957 to 2007, the trend—including a forecast for the future—is much less alarming.
The town of Athabasca, which is upstream of Fort McMurray, has a longer flow history, and the river flows track very similarly. Of course, it's a smaller river upstream, because of fewer tributaries entering into the river. At the town of Athabasca, we have a full century of monitoring data, and if we take a look at that full history, we can see there have been no trends in flows recorded over the last century on the Athabasca River. There are seasonal increases and decreases due to seasonal and longer-term fluctuations in the weather patterns.
(0825)
However, that having been said, if the flows in the Athabasca River were to decrease because of climate change or for other reasons, the effect would be that the water management framework would be implemented more often, and that would restrict the oil sands withdrawals more often in order to ensure protection of the river.
In addition, industry would manage the reduced water availability through the use of various mitigation tools, including the use of additional off-stream storage, thus spilling storage in the wetter periods, the summer high-flow periods, and then using that water shortfall in those winter periods. In addition to that, we can expect ongoing water efficiency improvements. As well, we've heard about some new technologies that may be promising.
I'd like to spend a couple of minutes talking about the oil sands in situ industry, which is quite different from the mining industry.
Water is also critical for most in situ oil sands production, and as the industry grows, so does the requirement for source water. However, increases in fresh-source water demand have been offset by a number of initiatives, including the transition to the use of saline water--water that's too salty for potability or agriculture--and high recycle rates of water produced with the bitumen. These rates are greater than 90% and sometimes approach 100% in some years.
I'd first like to call your attention to the black line on the chart. It indicates the bitumen production or oil production from the in situ oil sands industry. We can see that over the last 20 years there has been a sixfold increase in production.
In contrast, the blue curve, which indicates fresh water, shows fluctuation over the years. We have seen a slight increase in recent years, but the volume of fresh water has been greatly offset by the volume of saline water used, especially since 2002. There has been quite a steep increase in the use of saline water over fresh water, and you can see for the first time in 2007 that the industry now uses more saline water than fresh water for recovery.
We would expect that trend to continue into the future, depending on the availability of saline water. Depending on this mixture, by 2020 the in situ oil sands industry's forecast is to use between 25 million and 45 million cubic metres of fresh water to produce more than 1.6 million barrels of oil per day, or 90 million cubic metres per year. This represents less than 0.5% of Alberta's current water allocation to produce almost 40% of Canada's total crude oil.
Continuous improvement is also an important aspect of the industry. The chart here shows the water use efficiency of Imperial Oil's Cold Lake operation. It's in terms of units of fresh water per unit of bitumen produced. We can see that over the last 30 years there has been a dramatic reduction in the amount of fresh water required to produce each incremental barrel of oil. It is this record of continuous improvement that gives me confidence that the oil sands industries, both the in situ industry and the mining industry, will continuously improve their water use efficiency.
In closing, I'll mention that some new projects in the in situ industry, such as Devon's Jackfish project, use only saline water for steam generation. They're not using any fresh water at all.
Thank you very much.
I'd like to now introduce Ian Mackenzie, who will talk about water quality.
(0830)
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you for your presentation, Mr. Lunn.
Welcome, Mr. Mackenzie.
Mr. Ian Mackenzie (Golder Associates):
Good morning. I'm going to talk about water quality as it relates to the environmental impact assessment process in the oil sands region in Alberta. My presentation is going to focus exclusively on surface mines.
I'd like to first introduce a slide showing the bitumen outcrops along the Athabasca River. I think it can be seen that water quality has to be influenced by hydrocarbons and polycyclic aromatic hydrocarbons, which I'm sure you've heard about. Then I think it's worthwhile to recognize that based on this water quality and bitumen association, the ecosystem in the Athabasca River has likely adapted over thousands of years or been influenced over thousands of years by these deposits.
I'll frame my presentation on the environmental impact assessment with a focus on water quality by five basic elements: characterization of existing water quality; assessment of project design; confirmation of appropriate mitigation measures; cumulative assessment of water quality in receiving streams; and resolution of residual issues.
There has been extensive monitoring of water quality, sediment quality, and benthic invertebrates and fish, not to mention hydrologic monitoring in the lower Athabasca River for quite some time by numerous agencies. The federal government, through Environment Canada and the Department of Fisheries and Oceans, was involved in the northern rivers basin study from the mid-1990s to the end of that decade. The Panel on Energy Research and Development has been funding dozens of studies since the early 1990s on the lower Athabasca River. The northern rivers ecosystem initiative carried on the recommendations and studies of the NRBS, starting at the beginning of this decade and finishing up in 2003 or 2004. Alberta Environment and its predecessor has been monitoring water quality monthly upstream of Fort McMurray, and downstream of the oil sands development at Old Fort for quite some time.
Alberta Environment has also been involved in the northern rivers basin study with the federal government. You'll hear more about the regional aquatics monitoring program that was initiated in 1997. I'd also like to mention a couple of other regional bodies that have been doing a lot of work in the oil sands area. The first one is the Canadian Oil Sands Network for Research and Development, or CONRAD, which has been funding studies since the early 1990s on many aspects of oil sands, including wetlands research into potential acidification, tainting, loading studies in the river, and many others. In addition, the Wood Buffalo Environmental Association, or WBEA, has been monitoring potential stream acidification for some time.
The Cumulative Environmental Effects Management Association, or CEEMA, which you'll hear more about this afternoon, has been developing several management frameworks on potential acidification of lakes, management of streams, reach-specific water quality objectives, pit lakes, and several other things.
Industry also has to carry out monitoring associated with its approvals, which can be quite extensive. Proponents that are undertaking the EIAs also have to undertake extensive baseline work associated with that assessment.
None of the agencies and programs I've just talked about have been able to detect any effects of oil sands operations on the lower Athabasca River. I have a number of testimonials, and they are just a subset of many more that exist. For example, the PERD study, as reported in the northern rivers ecosystem initiative report in 2003, indicated there was “no evidence to indicate that local industries are contributing significantly to measured hydrocarbon levels or biotic impacts”.
Alberta Environment, in their 2008 report entitled Alberta's Oil Sands: Opportunity. Balance., reported:
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Stringent testing has consistently shown there has been no increase in concentrations of contaminants as oil sands development has progressed. In fact, contaminant levels in other rivers in the area with absolutely no industrial oil sands activity have been found to be higher than those adjacent to oil sands projects. The contaminant sources in the area are natural |
(0835)
RAMP, in their 2007 technical report, indicated:
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Based on comparisons of water quality between upstream and downstream stations over time, no effects of local human activities were apparent on water quality in the Athabasca River in 2007. |
Finally but not least, Evans, an Environment Canada researcher, and others stated in a published paper in 2002:
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There is little or no evidence of temporal trends of increasing PAH concentrations in sediment cores collected in Lake Athabasca and the...delta lakes, suggesting no or minimum impact from oil sands operations. |
The mitigation measures that are proposed and in place in existing oil sands operations--against which EIA practitioners gauge their effectiveness--include sedimentation ponds that trap particles associated with muskeg and overburdened drainage waters in advance of mining. These waters are released to receiving streams. There are closed-circuit operations of all process-affected waters and waters that may come into contact with exposed bitumen during mining operations.
Tailings are in back-filled cells, of which I have an accompanying diagram. You can see that the tailings are deposited in such a way that associated seepage is directed to reclamation features that are specifically engineered to remediate those waters. On the right side of the diagram you'll see a receiving stream. That is protected by the placement of low-permeability materials to prevent seepage from travelling in that way. Each site-specific circumstance is very unique; this is just a conceptual diagram.
The appropriate design of tailings ponds and tailings sand structures includes perimeter ditches to collect seepage and run-off from the structure. Many of the new tailings ponds that are being proposed include interception wells around the outside of these structures to collect water and put it in the closed-circuit system.
At reclamation of these structures, the hydrostatic head or water pressure is reduced from the top by removing that water and tailings, so the amount of seepage is very small and can be handled within the reclamation landscape. Sustainable reclamation landscapes are developed specifically to remediate seepage on the landscape through engineered wetlands, and then ultimately through pit lakes that have to meet regulatory standards before releasing to receiving streams.
After EIA practitioners confirm, using conservative modelling, that the proposed mitigation measures are adequate to protect local receiving streams, integrated modelling is conducted to ensure that all environmental pathways are considered cumulatively under several different conditions of flow and several timeframes, as well as under many conceivable development scenarios. These state-of-the-art models include integrated outputs from groundwater models, air quality models, and surface water models. The water quality models are then used to ensure that the predictions are robust and in compliance with regulatory benchmarks and thresholds.
Sometimes an iterative process has to take place when it's shown that important thresholds might not otherwise be achieved. Additional mitigation and refinement of modelling assumptions have to take place. That might form the basis of the application that is submitted to the regulators and stakeholders. These submitted EIAs are then reviewed in a transparent and open process that often includes independent expert reviews.
(0840)
For example, the federal government, through DFO and Environment Canada, has funded international peer reviews of some of the water quality and quantity work. Industry has also funded international peer reviews. Stakeholders also contract independent expert reviews on a routine basis for their assessments.
Given this rather lengthy and comprehensive process, the EIAs in the region continue to predict that the effects on the lower Athabasca River will be negligible and will continue to be negligible into the future.
In the final analysis, regulatory authorities along with stakeholder experts have ample time to review these EIAs and integrated applications and ask clarifying questions of proponents, who respond through formal and informal processes. This clarification process often lasts a year or longer in the oil sands area.
Issues that may not be resolved through the process are carried on to joint federal-provincial hearings for resolution and discussion. At the end of the day, if the project has been ruled to be in the interest of the public, the joint panel makes recommendations that are put into conditions, approvals, and regional programs to validate that systems are operating effectively and ensure that actions taken into the future are protective.
Thank you.
I'd now like to introduce Fred Kuzmic, who represents RAMP.
The Vice-Chair (Mr. Francis Scarpaleggia):
Good morning, Mr. Kuzmic...[
Technical difficulty--Editor]
Mr. Fred Kuzmic (Regional Aquatics Monitoring Program):
I'd like to thank the committee for the opportunity to talk today a little bit about the regional aquatics monitoring program, RAMP. I'm past chair and technical chair of this group.
RAMP is really a joint monitoring environmental program that assesses the health of the rivers and lakes in the oil sands region. It's a science-based program that's funded by industry and has multi-stakeholder representation from a broad range of stakeholders in the region. The program was initiated in 1997 and has been ongoing ever since.
A number of industry members are involved in the program. Some of them aren't oil sands companies. A number of government agencies representing both the provincial and the federal governments, including Fisheries and Oceans Canada, Environment Canada, and Health Canada, are part of the RAMP technical group and helped design the program and the technical aspects of it.
Under Environmental Protection and Enhancement Act approvals, operators in the oil sands region are required to conduct aquatic effects monitoring. They can do that themselves, or they can do it through participation in RAMP, which most of them choose to do.
The intent of the RAMP program is really to monitor aquatic environments in the oil sands region and compare that information with the environmental impact assessment predictions. RAMP also has the task of collecting baseline information to characterize the natural range of variability in the area. Again we collect information to compare against EIA predictions to see if they are accurate. Finally, we collect some information to fulfill the particular EPEA approval requirements that operators have.
RAMP is a program that uses both stressor- and effects-based monitoring approaches and achieves a holistic understanding of the potential impacts on the aquatic environment. We try to recognize and incorporate traditional environmental knowledge from some of our first nation stakeholders into the program. We try to communicate with the communities, the regulators, and other interested parties to share information we have. In fact, we publish a technical report each year that summarizes the activities of the monitoring program.
One of the important aspects of RAMP that we're really proud of is the continuous improvement part of it. We really try to focus on reviewing the results and looking for ways to modify the program in reflection of changing science or additional monitoring mechanisms that become available to us.
RAMP is made up of five or six key components. There are some slides that follow, so I'll detail some of the aspects of those further on. But let's start with climate and hydrology.
The climate and hydrology component of RAMP is really there to monitor the changes in water level of selected lakes and the quantity of water flowing through rivers and lakes. That's accomplished through a series of snow course surveys, hydrometric stations on the Athabasca River, and hydrometric stations along a number of the tributaries, including the Muskeg River. There are, in fact, ten hydrometric stations on tributaries north of Fort McMurray, and three hydrometric stations on tributaries south of Fort McMurray. We've taken water levels at three lakes as well.
In terms of the fish populations component, these are biological indicators of ecosystem integrity, and they're a highly valued resource in the area. There's another slide that follows on that, and I'll get into the details of that a bit more.
In terms of benthic invertebrate communities, we look at the aspects in rivers, lakes, and in the Athabasca River delta, the Peace-Athabasca delta. These are biological indicators that contribute to fish habitat, so it's important for us to look at these as well.
The final component of our RAMP program is acid-sensitive lakes. Here, water quality is reviewed as an early indicator of potential effects of acid deposition. RAMP has identified 50 of the most highly susceptible acid-sensitive lakes. We monitor those on an annual basis, looking at trace metals, general water quality, phytoplankton, and zooplankton. The indications are that we have 50 acid-sensitive lakes in the monitoring program, as well as 11 or 12 tributaries that we deal with outside the Athabasca main stem.
There are a couple of regional initiatives that are under way where people can contribute to the RAMP program, and I note a few things that they've noticed.
The first one is the river response network. This provides emergency response to public reports of non-spill events such as fish kills, the presence of foam, or scum floating down the river. This is an effort we have in conjunction with Alberta's environment protection ministry. They have a 1-800 number where they report that information.
In terms of the fish tagging program, this is an opportunity where we encourage the public to report tagged fish. Part of the fish populations program is the capture, tagging, and release of fish. When these fish are caught by fishers downstream or somewhere else in the river, they can report that back with the numbers that are on the tags.
(0845)
In fact, just in terms of some information, walleye tend to be very far-travelled. In some cases we've had tag recoveries about 715 kilometres from the initial tag sites—in Lesser Slave Lake in the middle of the province at one of the upstream edges of the Athabasca basin—and as far downstream as 403 kilometres along the Slave River. So these fish tend to be far-ranging.
The fish health program that we have promotes reporting of abnormal fish. So if a fisher catches something that looks strange or odd—if there are fish with lesions, growths, or physical abnormalities, such as curved spines or blindness or missing fins—they're encouraged to call the number that we have published and report the information to us so that we can take the fish and send it out for further analysis at the veterinary school.
If you take a look at the map, the RAMP study area is pretty big. It covers the entire regional municipality of Wood Buffalo. There are upstream monitoring sites from the oil sands operation, and downstream of Fort McMurray; and then there are some far downstream sites on the Athabasca River delta that look at the potential effects of development in the region.
The regional study area covers off the RMWB, as I said, but the focus study area looks at particular areas and watersheds where oil sands development is occurring, or is planned to occur in the future. So it's really keyed to those particular areas.
Take a quick look at some of the water quality information. As I mentioned before, water quality and sediment quality are two important components of our program. We look at all the regional tributaries of the rivers, and there are some lakes where the information is reviewed, and then out on the Athabasca and Peace River deltas as well.
The water and sediment quality reflect habitat quality, as well as potential exposure of fish and invertebrates. We have 45 sites that are sampled at a minimum annually, but there are some sites that are sampled monthly. There are 28 different sediment sites that we collect sediment samples from, and those are tied into the benthic invertebrate program as well.
We do toxicity testing. We analyze for polycyclic aromatic hydrocarbons. There are some potential fish-tainting compounds for which we analyze those particular materials as well, and there are some thermographs that we have to monitor for changes in water temperature.
The next few slides really just run through a couple of snapshots for the 10-year monitoring period between 1997 and 2007 on a few key components. The thing you'll notice is that each of them is below current guidelines—either CCME guidelines or other particular guidelines that apply—and there hasn't been a lot of change between the upstream and the downstream, or no change in most cases, between monitoring upstream and downstream of oil sands operations.
Maybe we could just flip through these slides. The first slide is of arsenic concentrations, the second of sulphate concentrations, and the next is of dissolved organic carbon concentrations. You can see that the purple represents the downstream sites and the green triangles represent the upstream sites.
The last slide on water quality that we have here is on PAH concentration, the polycyclic aromatic hydrocarbons. You can see there is a bit of fluctuation on some of those. The levels at upstream sites can be higher, depending on erosion that's occurring along the river, or seepage from some of the sites that Ian mentioned earlier. But the downstream sites tend to be fairly consistent over the period of record. So this is really showing no change across the region.
The benthic invertebrate samples are really biological indicators that reflect fish habitat and the quality of the sediment. There are 29 different locations on 23 river locations, three on the Athabasca River delta and three at the regional lakes. We measure both erosional and depositional habitat. There are 10 replicates collected at each of those sites, so there is some strong statistical power to the analysis that we do. And we collect the required physical measurements as well. None of the sediment samples are showing any changes in sediment quality. The benthic invertebrate community structure is similar and shows no change from previous data.
So one of the primary conclusions from the 2007 RAMP technical report—you can see the quote there—is that there have been no major effects on benthic invertebrate and sediment quality, as supported by the watershed and lake level analysis.
Talking about fish populations, the RAMP program each year does spring and fall inventories on the Athabasca and Clearwater rivers. In 2007 we collected just over 3,500 fish, and 2,500 of those were caught in the Athabasca River. A number of those fish will be tagged and released, but all of the fish are measured, weighed, and sexed so that we can come up with length and weight distributions and the age structure. There are 19 different species that we record in our inventories. These include walleye, northern pike, goldeye, and long nose sucker, to name a few. And we've seen no ecologically relevant level of change in any of the fish populations, which is really indicative of just natural variations.
We see that “sentinel (fish) species monitored in potentially influenced sites have not exhibited consistent differences in comparison to reference sites”.
(0850)
This is a non-lethal monitoring program we've employed over the last few years to look at upstream-downstream young of the year, to analyze any changes that may be occurring to those populations and the growth expectations related to any development.
There are some other aspects of the fish population study. We do fish fences, as well as the electrofishing and the monitoring that goes on in conjunction with the sentinel species work.
We're the only agency right now that is collecting tissue samples and analyzing for mercury. That information is passed on to Alberta Health and Wellness, Environment Canada, and Health Canada for continuation of the fish consumption advisories.
With that, I would like to turn the floor over to Greg.
(0855)
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Kuzmic.
Go ahead, Mr. Stringham.
Mr. Greg Stringham (Vice-President, Markets and Fiscal Policy, Canadian Association of Petroleum Producers):
Thank you, Mr. Chair.
In the interest of time, I'll keep my comments relatively brief.
I want to talk about two main things. You've heard the regulatory story and what has been going on today, but I want to talk a little bit about the technology advances that are going on. We have a second panel that will come and talk about specific examples, but I thought it would be important for you to understand the research and development and the pilot projects that are going on in both the mining areas and what we call the in situ or the underground areas, to try to reduce the amount of water use, increase the amount of recycle, or in many cases, as you heard, shift from fresh water to saline water and other sources, even using solvents instead of that.
In the mining area, the chart outlines a couple of things that are going on. I know you had presenters from the University of Alberta yesterday. There is a centre there for oil sands innovation that is looking very intensely at water issues associated with that from a research and development perspective. In addition to that, as you've heard in regard to a number of other research activities that are going on, there's a very strong push right now to increase the recycle rates and reduce the amount of tailings. Some of those examples include such things as consolidated tailings—in other words, to get the water to separate out from the fine tailings much more quickly than it has in the past, in order to move it into a reclamation phase more quickly.
You'll hear in the next panel about CO2 injection, where they will put CO2 into the tailings to get it to thicken up, and about looking at things such as paste and dry tailings. In fact, there's an oil sands research tailing facility at the university that is looking at pushing the advancement of technology.
So while technology has already been demonstrated, as Stuart talked about, in projects that are in place to reduce the amount of water use, that technology thrust continues into the future to try to look at what would be possible and practical in the future.
The one that probably has the most work going on right now is the dry tailings technology. I think you probably heard about that, but really that is to get to what they call a trafficable--you can walk on it--type of reclamation much more quickly. Shell, Chevron, and Marathon have the $100-million pilot project at Muskeg River, the plant that you flew over on Monday.
As well, NRCan is directly involved, and you can see some of the pictures from the NRCan studies with Syncrude and Suncor that really have the pilots scaled towards these dry tailings. It has not been perfected yet. It's not completely there, but it is getting much, much closer, and the research continues to go on.
Today, that's about 20% of the resource in the mining area. The other 80% is in the in situ area. That's the future resource. Production today is about half and half: about half the oil comes from mining projects, and about half of it comes from in situ.
In the in situ projects, there are some very exciting technologies going forward that will reduce the total environmental impact, including in terms of water. The one that we've shown on the top is the in situ combustion. We have them presenting on the second panel, and they will talk about how they will use underground heat in order to avoid the use of water and still recover the bitumen coming forward. There's no steam that is required for that process at all, and it is up and running, as you'll hear from Petrobank in a few moments.
Other areas on the in situ side of things that are very promising advances, in addition to the shift to saline water, include using solvents, reducing the amount of water or steam that is required, and using things such as propane to be able to get that thick bitumen thin enough to be able to come up the well to the surface. This has really shown some good promise and is done in some pilot projects at this point in time. They're even looking at potentially using full solvent recovery, which would replace water completely, and being able to recover the bitumen that way as it moves forward. That has been done at the lab scale but hasn't yet moved out into the field.
So there are some technological advances that I think are really promising, that continue to push the technologies, as they have in the past. Technology has been a real key to unlocking this resource, but also is a key to the environmental protection.
I'll just quickly summarize. As you have already heard, the balance for us is really critical. We recognize that the water resources are very valuable and need to be managed appropriately, need to be balanced with economics and the environmental and social aspects of development.
To put it in context, in 2008, for example, the oil sands industry used a little more than a third of the amount of water used by the city of Toronto, and that produced about half the oil being produced in Canada. Even if we project into the future, as Don talked about, if we look at maybe 3.3 million barrels a day, and with the decline in conventional oil, about 80% of our oil in Canada would come from the oil sands. At that point in time, we also know that's going to be capped off at 2.5 percentage points of the annual flow of the Athabasca River, in addition to these new technologies on the in situ side of things. So we think we can achieve the balance and we know we need to continue to improve.
We talked about the regulation. The water use and the related impact such as quality are regulated by both federal and provincial authorities, and there's extensive monitoring in place that comes from the governments, as well as from government multi-stakeholder and industry associations that look at that quality on a regular basis and make that information and those reports available to the public.
(0900)
I already mentioned the split between mineable and in situ, but I also want to come back and say that there has already been significant improvement in water use. We really are striving. There are economic as well as environmental reasons to reduce the amount of water and to increase the amount of water recycled. We can use the water over and over again after there is an initial draw-in. In many projects we're up to greater than 85%, and some of them are up to 95% recycled water. They draw on the water, but then they use it continuously throughout the life of the project.
Last, I want to emphasize the point on technology. Technology has already shown significant gains in helping us reduce the amount of water, finding technologies that don't need water, and pushing those technologies forward. It will still be a critical part of achieving environmental performance into the future.
I'll keep my comments short and turn the time back to you, Mr. Chairman.
Thank you.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Stringham.
We will proceed to a seven-minute round of questioning, starting with Mr. Trudeau.
Mr. Justin Trudeau (Papineau, Lib.):
Thank you, Chair.
For the past few days we've been travelling and hearing from various groups and stakeholders. We've heard from industry, from native groups, and from scientists. We are not scientists, but we are trying to pull together the big picture. The fact that there has been such a wide variance of conclusions drawn by the different groups in terms of something as simple as whether the water downstream is being affected by the oil sands is something that I think we all are somewhat struggling with.
Mr. Kuzmic, you talk about the fact that RAMP detected no changes to downstream water quality in 2007, which comes, as far as I can tell, in direct contrast to the results from 2008 that Dr. Schindler has drawn on in terms of levels of aluminum, PAHs, and mercury concentrations.
How do you reconcile what RAMP has found, or not, and what Dr. Schindler has found, or not?
Mr. Fred Kuzmic:
Thank you very much for the question.
I don't have the information from Dr. Schindler as to what his assumptions were in the information that he's provided. I know that RAMP is a scientifically credible monitoring program. We do have upstream and downstream samples. There is a 10- or 11-year monitoring record that is available for review. It's published in the RAMP annual technical report. That information is there and it's available.
Mr. Justin Trudeau:
The information is available; therefore, you're saying, all the science data that is drawn from industry, from RAMP, from all the different partners is published and available to analysts, researchers, and peer reviewers across the board? Every bit of data that is collected by industry is published?
Mr. Fred Kuzmic:
A number of different monitoring programs are in place. The RAMP information is available to RAMP members and other selected individuals who sign the data-sharing agreement that RAMP has. That information has been provided to Dr. Timoney for review through the Mikisew Cree First Nation, as they are members. It's available to consultants or other interested parties who have an association with RAMP members.
Mr. Justin Trudeau:
Much has been made of the future of in situ mining with shifts to saline or non-drinkable water. This is all groundwater, obviously, not surface water.
What kinds of studies have been made into the extent of aquifers and groundwater in the region? What can you tell me about the replacement rate of those saline reservoirs?
Mr. Don Thompson:
I'll let Mr. Lunn answer that.
Mr. Stuart Lunn:
Thank you for the question, Mr. Trudeau.
I can speak in particular detail to the Cold Lake-Beaver River basin, where Imperial operates its in situ operation.
We use saline water in that operation. That's part of the Cold Lake-Beaver River water management plan, which has been published. The industry conducted a survey of the availability of saline water in the region over a fairly extensive geographical area and implemented an annual monitoring program to determine the sustainability of that water resource. The study showed that saline water is available in the region over a widespread area, although it can vary significantly in salinity, which can preclude its use as a source water supply; in fact, if it gets too fresh, it actually trips back into the freshwater category.
That water was found to be sustainable, and we'll continue to monitor those resources to ensure that it continues.
(0905)
Mr. Justin Trudeau:
Sorry; is the water sustainable because the replacement rate of this groundwater is greater than the expected use of the groundwater?
Mr. Stuart Lunn:
Typically when we talk about groundwater sustainability, we talk about it either being sustainable or being mined. Technically that means that if you're withdrawing at a rate where if you stop withdrawing water, the levels recover in time—typically taking about the same length of time you were pumping—it's considered sustainable. If you pump at a rate that exceeds that, it's mined. In other words, it's not being replenished.
Mr. Justin Trudeau:
And do you have studies for your basin demonstrating it is sustainable at the rate you're taking water out—
Mr. Stuart Lunn:
To date, yes.
Mr. Justin Trudeau:
—and at the rate you expect? We're only at 50% of use in situ, and you guys said you were going up to 80%. Is it still going to be sustainable, and do you have studies to show that?
Mr. Stuart Lunn:
That is a good question. One thing to recall about the in situ oil sands industry is that the resource is spread over quite a large geographical distance. We have operations up in the Peace River area, south of the Fort McMurray area, as well as in the Cold Lake-Beaver River basin. It's probably over a 500 kilometre distance.
In the Cold Lake-Beaver River basin, which is quite a mature in situ oil sands area, there are wells that are currently operating, as well as monitoring wells to track that sustainability. As industry expands into these areas, saline water is evaluated at each project for use within the project, and those sustainability questions are asked as part of the EIA process and expansion.
Mr. Justin Trudeau:
Looking at the scope of it, has there been a comprehensive study, or is there a comprehensive study in the works, of groundwater in all potential oil sands development areas?
Please give short answers, as I want to get to my next question
Mr. Stuart Lunn:
Yes. In fact, Alberta Environment right now is pulling together the individual monitoring networks that each of the in situ operators have and are required to have. Some of those are quite extensive. Imperial, for example, has over 600 groundwater monitoring wells just for its own operation at Cold Lake. There are three different groundwater networks being pulled together currently: a regional groundwater monitoring network in the oil sands mining area, and one south of the Fort McMurray area—
Mr. Justin Trudeau:
Thank you; sorry to interrupt.
Mr. Mackenzie—
The Vice-Chair (Mr. Francis Scarpaleggia):
Mr. Trudeau, I'm sorry to say that your time is up. I know you were on a line of questioning there.
Mr. Ouellet.
Mr. Christian Ouellet (Brome—Missisquoi, BQ):
I think you'll have to put on your earphones, because I'm going to talk to you in French.
[Translation]
Mr. Thompson, what price would you be prepared to pay per litre of water that you use and that comes from the Athabasca River?
[English]
Mr. Don Thompson:
First of all, the oil sands and the oil and gas industry are not the only users of water in the province. I guess I would be prepared to pay the same price as other users in the province of Alberta.
[Translation]
Mr. Christian Ouellet:
I believe that the other towns that filter and use the water that comes from the river pay for it to meet their standards. So there's a price for that. If I correctly understood your answer, you're not necessarily prepared to pay all the time. In a free market economy, everything comes at a price. The water you use also has a price.
(0910)
[English]
Mr. Don Thompson:
Indeed. In fact, I'm paying the same amount to withdraw water as municipalities and other water users are paying. And indeed, I'm paying a considerable amount to treat that water once I have it in hand, whether it's for potable human consumption in sites, or for boiler feed-water. So I think there's an equitability there already.
[Translation]
Mr. Christian Ouellet:
Is that the price at which you sell the water? If you export one million barrels of oil to the United States a day, that means that you're exporting three million barrels of water to the United States a day.
[English]
Mr. Don Thompson:
The price of oil is determined on commodity markets, and that's what I receive for those barrels. Many people use water whether they are producing food stocks or other commodities that are imported or exported from the country. Again, I'm paying the same amount as they are.
[Translation]
Mr. Christian Ouellet:
I don't think they use as much water as you.
Mr. Lunn, you're telling us that you only use 1% of the water. That's interesting. You justify what you're doing by talking only about the water you use directly. You consider that what you use directly is the only cause of reductions in river water.
However, the oil sands contribute to greenhouse gases, which directly cause climate change. Furthermore, Alberta, because of the oil sands, produces 43% of the greenhouse gases emitted by Canada as a whole. Those greenhouse gases have a direct impact on the quantity of water in the Alberta basins and even further, and you don't consider the effect of the production of greenhouse gases when you try to assess what in your activities contributes to reducing the quantity of water in the Athabasca River and other rivers!
Why do you consider only what you take out of the river?
[English]
Mr. Don Thompson:
First of all, before I let Mr. Lunn answer, the fact is that greenhouse gas emissions from oil sands are 4.6% of the total emissions of Canada...and something like 80% of the emissions from a barrel of oil produced and the greenhouse gases at the consumptive end. So our contributions to the impact you're speaking of are actually relatively limited, compared with other users of our product.
So with that, I'll let Mr. Lunn speak to your question.
Mr. Stuart Lunn:
Thank you for your question, Mr. Ouellet.
I wanted to clarify first the forecasting of the water take from the river. The Oil Sands Developers Group that did the forecast on water requirements specifically looked at a dry period, because it was a dry period when the water management framework would kick in. So that 16 cubic metres per second as a peak was for a very dry period. As such, the major source of water in a dry period is the river, and not other precipitation sources.
I recognize your question on the potential effects of climate change on the Athabasca River flows. It is currently unknown whether or not climate change will increase or decrease the flows. There has been some discussion that summer flows would be expected to decline in a warmer climate, and the winter flows might actually increase. However, I am not a climatologist. I would note this is one of the things being discussed in the phase two process that is looking at another water management framework, or a phase two improved water management framework, for the Athabasca River. So we will be taking a look at potential climate change scenarios and how we might manage that.
Thank you.
[Translation]
Mr. Christian Ouellet:
Mr. Thompson, I find your answer very interesting. As parliamentarians living in Canada, we are certain that 43% of greenhouse gases are emitted by Alberta. You're telling us that the oil sands emit only 4.6% of those gases. Where would that difference of 38.4% come from? Where would those Alberta emissions come from?
(0915)
[English]
Mr. Don Thompson:
First of all, there are other industries in Alberta beyond the oil sands, and there are many consumers in Alberta. The majority of greenhouse gases across the country come from things like transportation, building use, agricultural use, and the like. I don't have the data in front of me, but I presume it's the same relative split for the province of Alberta as well. I'm presuming that we can provide you, as a follow-up, that data of where exactly in Alberta greenhouse gases come from.
I recognize that greenhouse gas emissions are a global issue and that it doesn't matter where in Alberta or Canada they come from. Within Canada, 4.6% of greenhouse gases come from the oil sands. That is our impact. In fact, being that Canada emits 2% of global emissions, the oil sands' impact is at 0.1% of global emissions of greenhouse gases, and it is global emissions that are relevant for climate change purposes.
[Translation]
The Vice-Chair (Mr. Francis Scarpaleggia):
That's good.
Mr. Ouellet, we now have to move on to Ms. Duncan.
Ms. Duncan, go ahead please.
[English]
Ms. Linda Duncan (Edmonton—Strathcona, NDP):
Thank you, Mr. Chair.
Following the good questions of my colleague Monsieur Ouellet, in regard to the coal-fired industry in Alberta, after many public interventions the government now requires the coal-fired industry to return the water used to the lake, treated.
You've reported to us how much water is used, but I'm presuming, based on your presentation, those are direct withdrawals. Have you been required by the government to calculate the full water loss to the lake, including from the mining where you're destroying steams and peatlands and you're containing water?
Mr. Don Thompson:
I'll let Mr. Lunn deal with that, but I would say that I think the coal-fired power plants use water to produce steam and for cooling, rather a different application. Secondly, at all the mines that I'm familiar with, the root surface water around the mines, such as that which flows from the streams that would otherwise cross the mines, is diverted back into natural systems.
With that kind of overview, I'll let Mr. Lunn speak in more detail.
Mr. Stuart Lunn:
Thank you, Ms. Duncan.
Following up on Mr. Thompson's answer, there are two types of water in the mining industry surface water--the water that comes in contact with the oil sands and the water that doesn't. If the water does not come in contact with the oil sands, it is typically diverted around the mine, as Mr. Thompson said, and back into the watershed. If it does come in contact with the oil sands, it is collected in a closed-circuit loop to prevent it from returning back to the ecosystem and potentially having some impacts from dissolved hydrocarbons and substances.
I do want to recall that when we're talking about the full water balance, we did look at a very dry period for the Oil Sands Developers Group forecast of the amount of water that might be withdrawn from the Athabasca River. During those very dry periods, there is very little surface water precipitation. So while it doesn't account for 100% of the water, because there's always some precipitation and some groundwater that needs to be pumped, it is a fairly robust number.
Ms. Linda Duncan:
Could somebody just answer my question with a yes or no? Does the 1% that you say you're using from the watershed include--yes or no--the loss of water from the destruction of the watershed, not just the direct withdrawal from the river?
Mr. Stuart Lunn:
Again, I would say it's not a yes-or-no answer. That's because it depends on the climate situation.
Under the assumptions that were taken of a very dry period--I'm speculating somewhat--some 80% to 90% of that would be represented by that, say, 1%. There would be some additional water required to be diverted, such as groundwater, to prevent it from filling the mines, for example; and some precipitation also occurs, even during dry periods, that would subsequently evaporate, for the most part, as it would normally.
(0920)
Ms. Linda Duncan:
Okay, thanks. I'm not getting a clear answer, so I'll move on.
Actually, for coal-fired, it is included in the model and they have to report, and the water is treated before it is returned. It is not directly put back into the lake or the river.
Mr. Mackenzie, I wonder if you could comment. You had stated that your water quality assessment is state of the art. Are you aware of the federally commissioned Council of Canadian Academies' national science advisory report that was released yesterday, which raises serious concerns about the science and the use of water in the oil sands?
Among concerns they've raised to the federal government are the lack of data on the aquifer reserves at all, and the risks posed by the tailing ponds to the northern water regime. They find that in situ operations using water and steam are of particular concern, possibly more than the mining. Knowledge is lacking as to whether the aquifer in the region can sustain the groundwater demands and losses, even where reclaimed. There will be less wetlands, more lakes, and no peatlands. Tailing ponds consistent with permeable material are a concern. Aquatic systems are vulnerable to leakage from the ponds.
Those are some of the issues that they have reported to our Parliament and that we will be considering. I wonder whether you could still attest to the fact that your work is state of the art.
Mr. Ian Mackenzie:
Well, given that the report was released, I think, yesterday, I haven't had a chance to look at it at all. It's the first time I'm hearing about it, except that I did hear that it was released. So I'm not able to respond specifically to any of the suggestions in that report.
I will say, though, with respect to the statement about tailings ponds and so forth, that the tailings ponds that are in existence and proposed are being managed very effectively to capture seepage so that it isn't going to receiving streams and having any effect on receiving streams.
Beyond that, I'm not sure if Dr. Lunn has anything to say about some of the water use aspects.
Mr. Stuart Lunn:
I also have not had a chance to review the report, but I would like to comment on your perspective on the lack of data on aquifer reserves.
Again, in the Cold Lake-Beaver River water management plan, and in fact in Imperial's 30-year history of production in the basin, we've developed a tremendous groundwater monitoring network at our facility, which consists of over 600 groundwater wells. So we have considerable knowledge of the groundwater reserves in that area.
I think the step forward that needs to be taken is to take the silos of very good information collected by individual operators and to incorporate them into groundwater monitoring networks more regionally. We certainly understand very well the groundwater systems within our operations, but we'd like to link other operations so that there's a better regional picture of the understanding of groundwater.
Alberta Environment is currently pulling together three of these groundwater networks. One in the oil sands mining area. One is south of Fort McMurray in an area that's called a steam-assisted gravity drainage area, and another is the Cold Lake-Beaver River, which is somewhat separate from those other two.
Ms. Linda Duncan:
So these projects have been allowed to proceed before we have data on the aquifer completely in place as the baseline?
Mr. Stuart Lunn:
No, not at all. In fact, as part of each environmental impact assessment for any project, groundwater monitoring is necessary as part of the application process to understand where the aquifers are and what the potential impacts might be to the aquifer resources.
My intent in my previous answer was to suggest that this can be improved by pulling together the best information from all these groundwater networks into a more regional picture.
Ms. Linda Duncan:
Thank you.
Mr. Kuzmic, you spoke about the regional aquatics monitoring program, or RAMP. We had testimony yesterday from Drs. Schindler, Donahue, and Griffiths. They reported to us that the peer review of the RAMP report raised serious problems with the sampling methodology and the findings. We now have before us the intensive monitoring work undertaken by Dr. Schindler and associates.
I'm wondering if you can tell us, as a result of that peer review, did the RAMP team address the inadequacies from the peer review, and how have you changed the way you're doing your studies? Are you, additionally, looking at studies done by independent scientists?
(0925)
Mr. Don Thompson:
I'll start by saying that, as far as my members and I are concerned, RAMP is a credible, competent program. It is operated by competent professionals who are working to the best of their ability.
I think if you read that report—I'll let Mr. Kuzmic comment on it—the first block of discussion is about how RAMP should be commended because it is unique, far-reaching, and one of the best that they are aware of.
Obviously, like any review, they will find comments, and that's what I want Mr. Kuzmic to talk about. But I want to set it in context that this is a program operated by competent professionals.
Mr. Fred Kuzmic:
Thank you very much for the question. It is a really good question.
The RAMP peer review was carried out in 2003. It was based on a five-year snapshot of RAMP monitoring from 1997 to 2003. The recommendations provided through the peer review panel were considered by RAMP, and I think 90% of those have been incorporated into the program since the 2003 review.
There are a number of peer reviews scheduled for this year as well, to continually improve our program, and we welcome all sorts of studies and any other information that can help us better analyze the information we collect.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you very much.
We'll move on now to Mr. Warawa.
Mr. Mark Warawa (Langley, CPC):
Thank you, Chair.
Thank you to the witnesses for being here. Just as an opening comment, this is a multi-party panel and this is our third day. We have unique perspectives, but we appreciate you being here and providing information to enlighten each of us.
I'm sure there will be a lot of very interesting follow-up dialogue in our committee as we head back to Ottawa, particularly looking at Quebec and the suggestion that all energy being created by water should be charged for that water. We'll see how that would affect Quebec in terms of Mr. Ouellet's suggestion that all the energy created in Quebec by water would all be charged. There will be an interesting discussion that will happen, I am sure.
I also want to continue asking about RAMP. We've heard, right from day one, concerns about RAMP from first nations, from aboriginal groups, that they are not happy with RAMP. They were involved. They shared that the membership is mainly made up of industry, that industry meets with government representatives and decisions are made before the panel even meets. So my question is on the makeup of RAMP.
In a briefing document I have here, it says that it is industry-funded, of course, which it should be, but the membership is multi-stakeholder, to monitor the oil sands. Membership includes members from local and aboriginal communities; environmental NGOs; governmental agencies, municipal, provincial and federal; and of course, industry representatives. Do you have NGOs as part of that membership, and aboriginal groups?
Mr. Don Thompson:
I'm going to let Mr. Kuzmic go over the membership of RAMP, but I'm going to just explain that membership in RAMP is a requirement of operating approvals. That of course dictates that the industry pays, which is a source of contention, but as you point out, that is what would be expected. I don't know any other way around it.
RAMP is also--it's part of our licence requirements--required to be quantitative, science-based, replicable, and auditable. That sets the parameters for what RAMP is. It is compliance monitoring, first and foremost, and has to comply with those key points.
With that, I will turn it over to Mr. Kuzmic.
Mr. Fred Kuzmic:
Thanks, Don.
That is a really good question. RAMP does have multi-stakeholder participation. There are currently 12 funding members of RAMP that are oil sands operators. One member is not an oil sands operator but rather a quarry operator that works in the region, and it is something they want to be part of as well, recognizing the value of the program for their particular operation.
We have first nation membership in Fort McKay First Nation and Mikisew Cree First Nation from Fort Chipewyan, as well as several Métis local individuals who are associated with the program.
With respect to the regulators, we have Alberta Environment, Alberta Energy and Utilities Board, Alberta Sustainable Resource Development, and Alberta Health and Wellness.
From the federal perspective, Fisheries and Oceans Canada, Environment Canada, and Health Canada are all members as well.
We have the Northern Lights Regional Health Authority as part of our membership. I'm not sure of the current status of OSEC, the Oil Sands Environmental Coalition.
(0930)
Mr. Mark Warawa:
Do you have any NGOs that are members?
Mr. Fred Kuzmic:
OSEC would be the only one, and I'm not absolutely sure of their membership. Their representation historically has been done with the Pembina Institute, and Pembina has said that they aren't part of that.
Mr. Mark Warawa:
Pembina, over the years, has been very active as an NGO on the oil sands. Are they not part of that group?
Mr. Fred Kuzmic:
Initially they were, yes, but they've pulled out recently.
Mr. Mark Warawa:
What year is recently?
Mr. Fred Kuzmic:
It was last year, 2008.
Mr. Mark Warawa:
Okay. They'll be witnesses later on. We'll be asking them why they pulled out.
On monitoring, slide 38 shows your study area. How far north does it go?
Mr. Fred Kuzmic:
Currently the program goes up to the Peace-Athabasca delta, so it's right up on the delta, south of the actual Lake Athabasca.
We've also heard of fish deformities. When we were up at Fort Chipewyan there was a lot of concern about toxins in the water, that the water isn't safe to drink. I believe they have municipal testing and that testing is determining that the water is safe to drink, but there is a huge concern of the residents in the area that there is a problem with the water, and they particularly point at deformities in fish.
You said you've been doing the monitoring. Does the monitoring of fish go that far north?
Mr. Fred Kuzmic:
No, we don't extend into Lake Athabasca itself. We look at the Athabasca River, primarily, but the Clearwater River as well.
What was mentioned earlier, though, was that there are a lot of migratory fish species that tend to use the river from the lake, so we have captured or have reported recaptures on the tagged fish from the far north--Slave River and the Athabasca lake itself.
So we don't look at the lake per se, but the fish that inhabit that lake use the rivers in certain parts of their life cycle. We catch them then and look for fish health and any abnormalities that we find there.
Mr. Mark Warawa:
When we heard Dr. Schindler yesterday, he raised concern around the lack of access to data from the monitoring by RAMP. I'm not quoting him, but I think he was saying that the data was not made public.
Is the data in your monitoring available to the public?
Mr. Fred Kuzmic:
I guess it depends on what you define as data. The information collected is presented in tables and charts and summarized in the RAMP technical report. That information is available publicly on the RAMP website, which is RAMP-Alberta.org. It has all the technical reports from 1997 through to 2008, so that information is available there.
With respect to the individual data points, RAMP has an extensive database that has approximately 2.3 million data points of information collected since 1997. That information is available for members and members' use, and if someone needs access to that information, they can gain it by access through one of the members and a data-sharing agreement.
Mr. Mark Warawa:
Do I have a moment longer?
The Vice-Chair (Mr. Francis Scarpaleggia):
I think you're on a good line of questioning, so why don't you take a few more minutes.
Mr. Mark Warawa:
Thank you.
We've heard concerns about tailings pond leakage, again in our last two days. There's actually a press release that has just gone out from Pembina, saying,
|
Their failure to act has created severe risks, ranging from contamination by leaking tailings lakes [so the ponds, which they're calling lakes] to the collapse of fisheries. |
When we flew over, we saw the ponds. We saw the ponds' perimeter drainage to collect anything, and then, below that, taking out the groundwater and pumping it back into the tailings ponds to ensure there was no leakage into the Athabasca River. But we've heard from aboriginal groups and from, now, a press release from an NGO that the tailings ponds are leaking.
Is there any evidence, through RAMP or any other signs, that the ponds are leaking?
(0935)
Mr. Don Thompson:
Before I ask Mr. Mackenzie to give some details, I want to assure the panel that the tailings ponds are carefully engineered structures that are built by highly competent geotechnical and other engineers. They are non-trivial structures. This industry takes tailings ponds very seriously in terms of their design and operation and reclamation. The people who design and operate these ponds are fully aware of the need to protect ground and surface water in the design and operation and ultimate reclamation.
With that, I'll turn it over to Mr. Mackenzie.
Mr. Ian Mackenzie:
That is a good question. Everything leaks, of course. The tailings ponds that you're speaking of, with the capture wells as well as the perimeter ditches, are specifically designed to return that leakage back into the process-affected recycle stream.
There is one discontinued tailings pond in the process of being reclaimed right now that I'm aware of. That's pond 1 at Suncor. There has historically been estimated to be very small leakage directly into the Athabasca River from that, and I believe there's been about two decades' worth of studies, required by Alberta Environment and carried out by various researchers, as well as by Suncor, showing that there's absolutely no effect from that legacy pond.
I'm not aware of any other leakages from other ponds. In our environmental impact assessments--of course, sometimes we get criticized for being so conservative--we do show that very minute amounts of seepage can potentially reach receiving streams, but as Alberta Environment has very clearly said in recent publications, they are not allowing any seepage to occur, and the capture of all seepage is expected. Monitoring wells that are in place and will be required by Alberta Environment will ensure that if there is seepage detected, that seepage will have to be returned to the tailings pond.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Mackenzie.
Before we move on to our second panel, I have two very specific questions that you can perhaps answer.
We run into a lot of acronyms in these reports. What does “PCA” mean? Do you know what I'm talking about? They talked about a study on the PCA. Does that ring a bell?
Mr. Ian Mackenzie:
I believe it's principal component analysis, which is a type of statistical treatment.
The Vice-Chair (Mr. Francis Scarpaleggia):
In connection with a point Ms. Duncan made about groundwater monitoring and the study of groundwater, I have a report here from February 5, 2004. It's an application for an oil sands mine, bitumen extraction plant, cogeneration plant, and water pipeline. It's from Shell Canada. Part of the report says these are the views of AENV, which I suppose is Alberta Environment.
The Vice-Chair (Mr. Francis Scarpaleggia):
It's the reaction to the application. It says that with respect to project-specific considerations, AENV indicated that a regional groundwater study on the PCA was not necessary, but that the information provided by a regional study might be useful. What does all that mean?
Mr. Ian Mackenzie:
I see that my earlier guess was incorrect now that I understand the context. PCA in that context means Pleistocene channel aquifer, which is an aquifer that runs through the eastern side of the oil sands area and up through many of the proposed mining operations. The quality varies from almost potable level to very poor quality. It is similar to a deeper aquifer called the basal aquifer.
In relation to the study you're quoting, I believe at the hearing surrounding the environmental impact assessment there was talk about potential influence of seepage into that Pleistocene channel. In terms of follow-up actions, I do remember the recommendation that there be additional monitoring of that aquifer, and I believe Shell does have required groundwater wells in that aquifer, as do many of the other operators.
(0940)
The Vice-Chair (Mr. Francis Scarpaleggia):
I have just one more point.
If I'm not mistaken, one of the things Dr. Schindler was saying in terms of access was that he didn't have access to the methodologies being used by RAMP. To get access, you had to be a contractor or a researcher working on a RAMP project, and he's not a member of RAMP. If I'm not mistaken, that was one of the points he made.
If you want to respond to it, you may.
Mr. Fred Kuzmic:
Sure, I would like to. Thank you very much for the opportunity, and it relates back to something Ms. Duncan had mentioned.
One of the peer review comments was that we didn't have a design and rationale document. That document and a description of how the program was conducted wasn't available to the general public. Since then, that manual has been put together. It is available on the RAMP website for people to look at. How the study was put together, what monitoring activities are under way, and how things are being analyzed and presented in the technical reports is publicly available information. That document is updated on an annual basis, and, again, it is available.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you.
We'll move on to our next panel. We're thinking that perhaps at the end we could ask questions to both panels. I imagine you'll be remaining in the room.
Thank you very much. I think your document is very rich, and it will be very useful to our researchers in terms of drafting the report.
There will be a short pause before continuing with our next witnesses.
(0940)
(0945)
The Vice-Chair (Mr. Francis Scarpaleggia):
I would ask that members resume their seats and that our next round of witnesses take their seats.
I imagine all witnesses will be presenting. I would ask that presentations be limited to five minutes so that we can get more questions in.
Without further ado, I will ask for the first witness, Mr. Fordham, to begin.
Thanks again, Mr. Fordham, for that tour on Monday. It was excellent.
Mr. Chris Fordham (Manager, Strategy and Regional Integration, Suncor Energy Inc.):
Good. I'm glad you enjoyed it. I certainly enjoy showing off what we're doing.
This morning I'm going to be speaking more specifically about Suncor. We saw most of the major projects in the region on Monday. Specifically, I want to talk to you a bit about what we're doing with water, how we're using it, and how we're trying to make more efficient use of the water we have.
We are currently operating with the same water licence we got when Great Canadian Oil Sands started in the late 1960s. Since that time, we've more than quadrupled our production, and with our Voyageur project we're going to double it again, all with the same water licence, so our water efficiency has increased significantly over the years. Once we've achieved this doubling of production, we're going to continue to explore further opportunities for water efficiencies and continue to reduce our overall environmental impact.
How are we going to do that? Well, we're looking at a number of options. We're looking at recycling and reusing waste water streams and improving our waste water quality so that we can either reuse more of it or provide better quality in what goes back to the river, which will improve our CT performance. I'll get to what CT is shortly, but that also will free up more water for use in the plant. We are also looking at new tailings technologies, such as dry tailings.
I don't want to get too hung up on this graph. It's a little busy. The graph shows that water gets used in every aspect of our operation. We have a mining operation and a bitumen upgrading operation. We have energy services, which produce steam and power. As well, we have a large in situ project, named Firebag, that we couldn't fly over on Monday, unfortunately, because it was fogged in.
Water is used in every part of our operation. What I would like to draw your attention to, though, is on the little chart at the bottom on the left-hand side. It shows our water use efficiency on a cubic-metre-per-cubic-metre basis or barrel-per-barrel basis. Once we have Voyageur up and running, we'll be using about 1.67 barrels of water for every barrel of oil produced.
This is what our water use efficiency and total water use look like over the past few years. We've seen a 30% increase in our water use efficiency and overall water use. We're currently licensed to 59.8 million cubic metres per year from the river. We've used less than 85% over the last three years, and we expect to continue reducing that going forward. Our total use is less than 0.5% of the average annual flow. We heard talk of average annual flow in the river. That's really what we saw in the river on Monday; it was about the average annual flow.
We did have a little bump up last year. We had some plant reliability issues, which we've gotten through; now our production's back on track, and so is our water use.
One of the processes we use at our mine site is consolidated tailings, or CT. CT is a process that was developed through a multi-industry research cooperative effort back in the mid-1990s. It takes a regular tailings stream and densifies it; it takes out a bit of the water, adds some fine tailings out of the tailings pond, mixes that with gypsum, and pumps that slurry out to the pond.
The difference between CT and our normal tailings is that when normal tailings get to the pond, the sand settles to the bottom and the clay stays in water suspension above it. They're very separate. With CT, the sand and the clay stay together. The clay structure collapses because of the gypsum, freeing up water. It consolidates much more quickly and frees up the water. When it frees up the water, you can end up with a dry, trafficable surface much more quickly.
We started with CT back in the mid-1990s. It did take a number of years for us to get it sorted out. It's a very easy process at a lab scale, when you're mixing litres or several litres of fluids together, but when you're doing it at 60,000 gallons a minute, it takes a little more effort to get it right. However, you can see that over the last three years our efficiency with CT has increased significantly. Probably the maximum we can get to is about 76%. About 76% of the time, you can make good CT.
(0950)
Why is it only 76% of the time? Surprisingly, one of the issues is sand availability. You'd think perhaps with the amount of sand that we mine every day, several hundred thousand tonnes, we would have lots of sand, but in fact a bunch of that sand gets used to build the dikes that contain the CT ponds. We have to do that in conjunction with making CT, so 76% is the about the most effective we can make CT. Producing it at that rate will allow us to use up our mature fine tails inventory.
What else are we doing? We have a number of projects. We're looking at putting in another cooling tower so that we'll be using less water from the river for cooling. We're looking at recycling water to our cokers. Water right now ends up in the tailings ponds; we're going to try to recycle it so that we're not using fresh water, or other waters, to do the coke cutting. We're looking at treating and recycling some of the waste water that currently goes to the river, so that we can use different streams in our boiler feed-water or have better-quality water return to the river. Those projects, in total, would be about $100 million.
There are two other aspects I want to touch on a little bit, dry tailings and pond reclamation.
Once you reclaim a pond, you no longer have that fluid inventory and you can begin to return that land back to what it was before the mining operations were there. We're going to have the first tailings pond in the region reclaimed by next year, pond 1, and we're working on techniques to get ponds 5 and 6, our first consolidated tailings, reclaimed by 2019.
Another area we're exploring is dry tailings. We're looking at a number of techniques there to try to get the water out of the tailings, to free it up so that we can recycle it, reuse it, and produce drier landscapes.
This is our mature fine tails drying, one of our trials. The picture on the right is our starting material, which is mature fine tails that have had some sort of either chemical or mechanical treatment applied to them to make them a little thicker and to increase the solids content. Material gets spread on a beach, where it dries. Over the course of the winter it freezes and cracks, and the water moves into water lenses. When it thaws in the spring, the water runs off, and you're left with a material much like you see in the bottom right picture. It goes from yoghurt to something that's about the consistency of coffee grounds.
In relation to reclamation, this is pond 1. We flew over this on Monday and had a look at it. You can see the progression over the past couple of years. One of the reasons it appears that the infilling doesn't move very quickly is that most of the infilling happens below the water surface, so you don't see any difference.
We saw our first benefits from the efforts of our infilling back in the summer of 2007. You can see a little tiny white beach there in the top of the summer of 2007 picture. By summer 2008, a large area of the infill was above the water level. That's fall 2008. Then you saw it on Monday, and there's an area that still has fluid in it. That fluid is being removed and sand is being infilled into that pond. Next year we will have soil and revegetation materials on it, and by 2020 it'll look very much like the landscape surrounding the mine itself.
Thanks very much. I'd like to pass it over to Mr. Duane.
(0955)
The Acting Chair (Mr. Blaine Calkins (Wetaskiwin, CPC)):
I'll just give a reminder to please stay on time. We're trying to stick around the five-minute mark, or a little bit more.
Mr. Duane, please start.
Mr. Calvin Duane (Manager, Environment, Canadian Natural Resources Ltd):
Bonjour, et bienvenue a Calgary.
I'm going to talk about three topics that are fairly exciting for Canadian Natural in terms of water and water use in the oil sands.
The first one I want to talk about is our new technology of carbon dioxide use in tailings. It is much the same as what Mr. Fordham talked about in reference to CT usage; we use carbon dioxide to achieve much the same results.
As you can see, in our case we use carbon dioxide to create NST, non-segregating tailings. The picture shows graphically how the material has settled into the bottom part of the cylinders, which essentially is the fines settling out of it. This reduces our use of fresh water and gives us a smaller tailings footprint. Our tailings are solidified sooner, which gives a reclamation surface. It reduces our carbon dioxide emissions by approximately 11%, and overall, through an integrated process, it just saves a lot of factors together.
Borrowing from Mr. Fordham's slide showing you his technique of demonstrating the process, I'm showing a very similar slide so that you can see the similarities between the two processes. We had a thickener of tailings, a carbon dioxide injection to produce thickened tailings or, in our case, non-segregating tailings.
The second item I want to talk to you about is water storage. It's a new feature in the oil sands development, but it's now a common practice for all new projects to develop water storage on-site. We have developed a 1.7 million cubic metre storage facility of raw water from the Athabasca River. This provides us with approximately 30 days of operation, assuming there are 1.3 metres of ice on it.
It was designed three years prior to the IFN coming into place, so it was not the IFN that drove us; it was actually our own recognition of the issue of managing water properly. We made sure it was operational two years prior to the operation of the Horizon project to ensure that we had that water while we were coming into operation, not afterwards. It is the best management practice, and it was designed to meet stakeholder and aboriginal concerns.
The third and last item I want to talk to you about is developing a compensation lake for the fisheries habitat loss. It was a Fisheries and Oceans Canada requirement to do this, and we have done so. We have created a lake, and we filled it in May 2008. To date it has exceeded our expectations. The water quality exceeds what we expected it would be, and already we have fish in the lake; five of the eight species we wanted in this lake are there presently.
The lake replaces the lost habitat in both the Tar and Calumet rivers. It replaces it at a ratio of 2:1, so for every one unit of habitat lost, we replace two into the lake. This design was based on four years of intensive stakeholder consultation and scientific workshops. We brought in science and we brought in traditional environmental knowledge. We brought in a number of factors, and this met the federal requirements under Fisheries and Oceans Canada.
Finally, I wanted to provide you with some statistics on the lake. They are there for your interest.
This summarizes the three topics I wanted to bring to your attention, and I believe I've done so within your timelines.
Thank you.
I'll pass it over to Mr. Fox.
The Acting Chair (Mr. Blaine Calkins):
Go ahead, Mr. Fox, for five minutes, please.
Mr. Matt Fox (Senior Vice-President, ConocoPhillips Canada):
I'm going to discuss specifically the water use and the SAGD, steam-assisted gravity drainage, aspects of the oil sand business. I hope to leave you with three pretty clear messages: that SAGD uses only non-potable sources of water from deep aquifers; that SAGD companies are moving more and more towards saline water use as time goes on; and that the technology is likely to significantly improve water use in SAGD over the coming years.
First of all, I understand that you didn't fly down to Surmont. This slide, nonetheless, shows you the overall footprint of the Surmont phase one development. You can see the central facility in the front of the picture and the two well pads up towards the top of the picture. That's the overall footprint.
The next slide is a picture of the processing facilities. The only reason I included it is that it shows that the processing facilities for SAGD are mostly dominated by water treatment. SAGD, as you know, is steam-assisted gravity drainage, whereby we inject steam into the reservoir to melt the bitumen. That requires a significant amount of heat; and when you're turning it into steam, it also requires that clean water be used in the process. A lot of the process is dedicated towards cleaning up the produced water, so we can reuse it—cleaning up the water we get from the deep aquifers, because it's not potable or clean enough to put through a boiler, and then processing that water through the plant.
The next slide shows at a high level how the water process works in SAGD. First of all, the thinner blue arrow coming up is our make-up water, the water that we take from the Grand Rapids formation. It's non-potable, but is classified as freshwater because it is less than 4,000 parts per million in dissolved solids; it has about 2,500 parts per million dissolved solids.
If you look at the schematic on the left-hand side of the chart, we turn 2.5 barrels of this water into steam in the plant and then inject it into the reservoir. This process recovers one barrel of bitumen. That water is then produced back with the bitumen, and 90% of it is treated and then recycled. Then a quarter of a barrel is disposed into the deep formation you can see there, the Fort McMurray formation. Then that quarter of a barrel is produced from the Grand Rapids sand and is mixed with the 90% that's recycled, and the process starts again. So we use about a quarter of a barrel of water from the aquifer for every barrel of oil or bitumen that we produce.
We also produce water vapour of about a quarter of a barrel of water, associated with the combustion process. That's what the top of the diagram shows. So we actually produce into the hydrological cycle the same amount of water we take from the aquifer, if you follow me. I'll get back to that on that last slide, when I talk about technology.
The reason we're using what's classified as freshwater is that's all we can find near the Surmont lease. It's what's underneath our lease. So we've been exploring over the past five years or more for more saline sources of water, trying to find water that would be in the 4,000 to 10,000 range of salinity. We've gone as far as 60 kilometres away from the plant, and we recently found some sources of water that would be in that 4,000 to 10,000 range. But the water is quite a significant distance from the plant; it could be easily 30 kilometres from the plant we'd have to pipe that water back to Surmont, and treat it and then put it through the process. But we are actively exploring for more saline water so we can reduce the use of the water from the existing aquifer.
On the final slide, as far as the future is concerned, our future projects have been designed for 95% recycling rather than 90%. Of course, when you go from 90% to 95% recycling, it halves the amount of water you need to use. As I said, we're looking to increase the use of more saline water and we're actively exploring for that. We've spent $70 million over the last five years just exploring for saline water to use in the plant.
We have done a huge amount of research—at least $300 million—and will do between $300 million and $500 million of research over the next five years on oil sands activity.
(1000)
One of the main focuses is to adjust the steam-oil ratio, because that reduces the cost of buying gas, reduces the greenhouse gas emissions, and reduces the water emissions. There are several encouraging technologies for adjusting steam-oil ratio. One example is injecting solvents with the steam.
We are also doing research into how to economically capture the water from the combustion, that quarter of a barrel I spoke about earlier. If we can do that in an economic way, we could virtually eliminate the need for any external water source for SAGD operations.
The Acting Chair (Mr. Blaine Calkins):
Thank you very much, Mr. Fox.
Mr. Scott, please go ahead.
Mr. Michel Scott (Vice-President, Government and Public affairs, Devon Canada Corporation):
Thank you.
In a nutshell, our project, which is a steam-assisted gravity drainage project as well, is just about the same thing as was described, with the one key distinction: we use strictly saline water.
(1005)
[Translation]
Good morning, ladies and gentlemen.
I work for Devon Canada Corporation, and we are very proud of what we've have accomplished with regard to water and other issues. I'm also very pleased that we've been given the chance to speak to you.
[English]
I will repeat this; don't panic.
Thanks, everybody.
Ladies and gentlemen, at Devon we're very proud of what we've accomplished at our project in terms of how we've treated water and in terms of other aspects as well. It's a great opportunity for us to talk to you.
First of all, our project is located about 140 kilometres south of Fort McMurray. I'm sure you didn't fly through there. We're located about 15 kilometres south and east of a little community called Conklin. We are still located in the regional municipality of Wood Buffalo, and we pay municipal taxes to them. I only make that point because in effect we draw most of our services and quite a few of our people out of Lac La Biche, so we really don't put any pressure on Fort McMurray.
[Translation]
So that you remember this presentation, I'm going to enumerate the three main points. First, we use no surface water at Jackfish and no drinking water. Second, we recycle 95% of our water. Third, we have no tailings ponds like in the mines.
[English]
I'm going to summarize this very quickly.
There are three key points for Jackfish. First, we use no fresh water or surface water in our operations, with the exception of potable water for human consumption. Second, we have a high recycle rate, upwards of 95%. Third, we do not discharge or have tailing ponds on our sites. We don't withdraw from or discharge to surface locations, and when we do draw water, it's from a deep saline aquifer located about 300 metres below the surface.
In the photo here, although you can't see it very well, we have three small ponds. One of those is called a blowdown pond. That's a pond that we discharge water into when we're trying to ramp up our operations and heat up the operations or cool them down, and then once we're done, we can draw that water back into the process. We also have a sewage pond used to support our people's camp operations, and we have another pond, called a retention pond, that simply captures the surface waters.
Concerning the next slide, you've heard Matt talk about the steam-oil ratio. We're running at about 2.65 right now, but of course we're recycling most of that. Our target for the near future is to achieve a 2.5 ratio, but we are focusing on trying to reduce that even more.
Another thing I'd say about SAGD is that the surface impact or footprint related to this type of activity is quite small relative to even the conventional type of oil operations. We're going to produce 35,000 barrels of oil there daily off four pads, essentially, which have more or less seven wells each. Each well is going to produce about 1,000 to 1,500 barrels. For comparison, an average conventional oil well in Alberta produces less than 20 barrels a day. So there are some benefits from that aspect as well.
Let me tell you, this isn't an accident that we're using saline water at Jackfish. We have a commitment and a policy in the company that we're going to minimize the use of fresh water. We had consultations with our stakeholders, and we do it not just in the oil sands, but in everything we do. When Jackfish came along, we applied this policy and put it in action. Of course we had to find the saline water as well, and we had to deliver on that promise. We too had to drill a number of wells, but we were fortunate and we did find it.
From our standpoint, this was the right thing to do. We wanted to develop the oil sands, but we wanted to do it in an environmentally friendly way.
Matt just showed you a slide similar to this one as well. There are essentially four parts to this plant, from oil separation to oil storage, but there is also a big water treatment component, and of course we have our steam generators. The bottom line is that about half of the capital that goes into this plant is related to water recycling. We tend to think of this as a water recycling plant that enables us to reuse the water.
The other feature, which is not shown on this slide, is the extensive monitoring program that surrounds our property. We have 12 wells that monitor a dozen or so various aquifers. This information is collected and reported to the regulatory bodies. If any change in temperature or pressure were to occur, we would know what was going on and we could take corrective action.
You've seen various versions of the next slide. The only point I'd like to make is that in addition to the monitoring that goes on, above the Fort McMurray formation where we produce our oil there is a buffer of over 200 or 250 metres of cap rock that sits above the formation and essentially seals the formation off from any of the aquifers closer to the surface. That distance, by way of comparison, is roughly the size of the Calgary Tower, or two Peace Towers, in terms of height.
In terms of the road ahead, from our standpoint “good” isn't good enough, and it's particularly true with water. We have a saying in the company that governments grant us permits, but the communities grant us permission. It's very important to listen to what folks want, to try to manage that, and to be as good a neighbour as we can possibly be. We're seeking to do more, and we're directing our activities to that end.
I know you've visited the oil sands, but if you ever have the inclination or if you can make it--any one of you or all of you--you are invited to our site.
(1010)
[Translation]
In closing, I would like to thank you sincerely for the opportunity to make this presentation. We would also be very honoured if some of you would come and visit us.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Scott.
There's only one presenter left.
Mr. Wright, go ahead please.
[English]
Go ahead, Mr. Wright.
Mr. John D. Wright (President and Chief Executive Officer, Petrobank Energy and Resources Ltd.):
Thank you very much, Mr. Chair and members of the committee. It's a pleasure to be here today.
I'm here representing Petrobank Energy and Resources. By way of background, we operate throughout western Canada as well as in Latin America, and have great exposure to both the regulatory and environmental challenges of the heavy oil and oil sands industry throughout those regions, as well as some of the global implications of that.
Within our heavy oil group, we maintain a technology division, which actually owns some of our proprietary intellectual property. I'm going to talk about some of that today. But the focus of the company in particular is to find global solutions to the heavy oil challenges faced not just in Alberta but throughout the world in all the heavy oil basins.
In terms of location—this might help with Michel's presentation as well—we operate directly to the west of the Devon Jackfish operation, at our Whitesands project area. This is in situ central. That tiny map shown on the right actually represents about 600,000 barrels a day of planned and approved projects in one very tiny part of the oil sands, all of which will be derived by in situ means, none of which is accessible through conventional mining methods.
What we're doing is something radically different from anything that has been tried before. Our Whitesands projects implements the THAI process. I could go on for hours about how this works, but in a nutshell, the acronym, THAI, stands for “toe to heel air injection”. Rather than using steam or combusting natural gas on the surface, we drill a horizontal well at the bottom of the reservoir and a vertical well at the toe of that horizontal well, and we inject air, atmospheric air under pressure. The air contacts the bitumen in situ and generates an oxidization reaction that will have temperatures ranging between 700°C and 1,000°C in the combustion zone. That heat mobilizes the oil, actually has the effect of partially upgrading the oil in situ and drops out a percentage of the coke, and all the oil flows naturally to the surface.
In one little slide I can show you the highly underwhelming impact of our surface facilities. There is no water treating facility. There are no steam-generating facilities. It's a simple oil battery and air compressor system.
The key to THAI is more than just the fact that we don't use any fresh water in our process. We actually produce a usable water stream. We've eliminated the use of natural gas. We've increased the recovery rates, with about half the greenhouse gas emissions of any of the other processes available today. Because we have a partially upgraded oil product, we actually have simplified our operations on the surface, and of course, a much smaller surface footprint means that the total overall impact of the process is very minimal.
The best way to characterize the oil that comes out of the ground is that the bitumen that's derived from most processes is like the bitumen shown on the left in our slide. It's actually heavier than water and does not pour at room temperature. On the right in our slide, you'll see our THAI upgraded oil, which has a viscosity that's pipeline-able at surface conditions and is in fact about 4° API to 5° API lighter than the in situ bitumen. That oil is about a 12° API crude.
The importance of having a light oil product in the heavy oil world means that your process becomes much simpler. Our oil floats on the produced water component, which means we have an easily separated emulsion, allowing us access to a very clean produced water stream that has some great characteristics.
When you compare the produced water that we take off our separators, we actually have very similar water characteristics to the water that Devon is taking from the aquifers directly adjacent to us. In fact, our produced water would pretty well match their feed water for their process and would provide another source of water for other industrial uses as well.
The last thing I might emphasize about the water that's produced is that, from the secondary condensing, we actually condense a purer steam component, which means we condense, effectively, distilled water from our process, which has direct use in power generation applications and other applications.
(1015)
To finish it all off--we all seem to have pictures of this--this slide shows what a typical surface application for our well sites would look like.
The final slide slows the minimal surface impact we would have for a process facility that would be capable of up to 100,000 barrels a day of commercial oil production.
That's our story.
The Vice-Chair (Mr. Francis Scarpaleggia):
That was very interesting, Mr. Wright.
I believe we can now move on to our round of questioning, which Mr. Trudeau will open.
Mr. Justin Trudeau:
Thank you.
Mr. Fordham, when we flew over with you on Monday, you pointed out the Bison site, which was the first reclamation or the successful project of returning to the land what we had.
What was the total cost of reclaiming that particular site?
Mr. Chris Fordham:
That was a Syncrude site, and I don't have those numbers available. I'm guessing that we could probably find them for you, though.
Mr. Justin Trudeau:
In one of the testimonies yesterday, someone mentioned that site was one of the easier places to reclaim because of environmental, geographical, and geological factors. It was done first as a showcase of what could be done because it was more easily done than the others. Is that a fair assessment?
Mr. Chris Fordham:
The industry has done an awful lot of research into reclamation over the years. I'm not exactly sure of the time that one took, but it's certainly evidence of successful reclamation. We've reclaimed a number of other sites over the years, and each of them probably had their own individual challenges. But we're certainly learning how to make it work.
Mr. Justin Trudeau:
There's one other comment that struck me when we flew over Kearl Lake. You mentioned that it's a shallow lake that freezes right through and that the compensation lakes you'll be making are deeper. Certainly on the surface, I thought that seemed to make sense, although subsequent commentary from some of our native elders and chiefs was that it might not necessarily be a good thing.
My concern is that the lakes to be reclaimed are deeper because they were created through mining processes. Have there been a lot of studies done on what kinds of habitat the reclaimed lakes will create in the long term? I guess I'll turn to Mr. Duane afterwards, as he has an extensive slide on this.
Mr. Chris Fordham:
Again, there's been a fair amount of research in that area over the years. The specific lakes I referred to in the helicopter are part of the Imperial Kearl project, and I can't speak specifically to the nature of those lakes beyond what we talked about in the helicopter.
I do know that if you are providing compensation as part of the DFO approval, then that compensation has to support fish habitat. Making it shallow enough that it freezes to the bottom probably won't achieve that.
I'll let Mr. Duane speak further to that.
Mr. Calvin Duane:
We built a compensation lake and it's functioning, but you're absolutely correct about the importance of shallow areas. In fact, 30% of our lake is shallow just to provide for that value. But to ensure that they last over the years and provide habitat, they need the deep components to them as well. So our lake has a component that's less than five metres deep, but it also has a component that's about 20 metres deep, which provides different habitats. All of those things are important.
We developed our lake, and I assume Imperial will do the same with theirs, by working with the stakeholders to find out how to match it. I can't show you the pictures of our lake, because the aboriginal people don't like them to be shown, but we did a blessing of our lake. They were out there and they actually contributed to the lake. We continue to meet with them and they're actually working with us to design the lake and the vegetation around it. We're building a gathering place for them. We've already done 80 hectares of reclamation around the lake.
So we do work with the communities, very much so, on these compensation lakes.
(1020)
Mr. Justin Trudeau:
How was the lake created, or dug?
Mr. Calvin Duane:
On this particular lake, we were able to use topography to our advantage. We are removing the Tar River as part of our operation, and so we dammed the Tar River at the toe of the Birch Mountains and allowed it to backfill, much like any hydro reservoir would do.
Mr. Justin Trudeau:
So this wasn't actually a lake that you dug; it was a space where there was a natural sort of hole or valley in the land.
Mr. Calvin Duane:
That's correct, and our well-water storage pond was different, as we actually dug that one out. So it depends on the use and how you build various lakes and ponds.
Mr. Justin Trudeau:
When we talk about reclamation lakes—going forward, I know there are plans for many of them—what proportion will be dug and what proportion will use irregular topography?
Mr. Calvin Duane:
That's specific to each project, so I can't answer your question, unfortunately. It's very specific to the land form a project is occurring on, and whether the lease is on-site or off-site. So I really can't address that. I can only speak to what we were able to use on our project site.
Mr. Justin Trudeau:
In defining a reclamation lake—I'm sure you're required to have compensation lakes as part of your land use and permitting process—is there a distinction in the requirements to create compensation lakes between naturally occurring or dam-filled lakes versus dug lakes?
Mr. Calvin Duane:
No, the requirements would be the same. They still have to meet the requirements of being able to support fish over the long term and meeting certain water quality parameters associated with that. It's not only about having a lake, but also being able to potentially fish out of the lake, and those sorts of things, and maintaining proper water quality.
Mr. Justin Trudeau:
It just seems to me that the disturbance of actually digging alters what would be the bottom of the lake, as opposed to natural processes of sedimentation over centuries and millennia. It troubles me that there isn't any distinction between the kind of compensation lakes that are going to be created.
The Vice-Chair (Mr. Francis Scarpaleggia):
Do you have a quick question?
Mr. Justin Trudeau:
Mr. Fox, I return to something I said in one of my earlier interventions, that there seems to be a real point of pride or distinction in using non-potable water, or even better, saline water, for the process. It makes us feel that saline water is therefore not important, or is less important to ecosystems and the environment than fresh water.
Can you talk a little bit about the importance of saline water in an ecosystem?
Mr. Matt Fox:
I'm not an ecologist, so I couldn't talk at any length about that.
Mr. Justin Trudeau:
Okay.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Trudeau.
[Translation]
Mr. Ouellet, go ahead please.
Mr. Christian Ouellet:
Thank you, Mr. Chairman.
I hope that, as a result of my questions, we'll be able to talk about this later. So many things are being said, Mr. Warawa, that we won't necessarily discuss again later. I very much appreciated the comment. Thank you very much.
I'm mainly speaking to Mr. Wright and Mr. Scott, who are showing us that there are new extraction methods and that they may be better for the environment.
Since Canada appears to be one of the only developed countries that does not have a long-term energy plan, don't you think it's high time the federal government conducted a comprehensive assessment of potential impacts? These impacts change, as you have demonstrated to us. They concern the environment, water, life cycles, the economy, society and responsibility toward first nations.
Currently I would say that the government is focused more on the oil sands than elsewhere. Don't you think it's time to conduct a comprehensive assessment to show that progress is being made.
(1025)
Mr. Michel Scott:
Thank you for your question. It's an important question for which there's no easy answer.
I think it would be sensible to have a national energy policy. I often think the debate is focused on the environment, or on the economy, or on energy. I believe it's time we balanced those things. It's not just about one or another of those aspects; there are benefits that must flow back to aboriginal people, others to other communities, and others to the rest of Canada. They have to be integrated.
We need energy. I don't know what we would do without energy. We have to pay attention to what we do. If the idea is to raise the dialogue, I think it's sensible to establish facts on a more scientific basis and to promote greater understanding.
Mr. Christian Ouellet:
In fact, it should include the social, economic and environmental aspects. It should be related to the definition of sustainable development.
Mr. Michel Scott:
I think it would be possible to find a balance among all the aspects. It's not just about one or the other. We have to find this medium where we can meet our energy needs in such a way that people and the environment are respected.
I think that can be done through technology. That's where we're heading. You heard some ideas today, in particular those of John. However, we can't all get to the same point at the same time. It takes time to demonstrate the viability of these technologies when we make our long-term investments. However, that will evolve.
It should not be forgotten that most of the oil sands resources cannot be recovered through mines. They will be recovered through technologies, such as those that ConocoPhillips Canada, Petrobank Energy and Resources and we are talking about.
Mr. Christian Ouellet:
Most of the resource cannot be recovered, and in any case it is very difficult to get at it.
However, I like it when you say that we could strike a balance. You're right. We're not looking for a balance; we're leaning to just one side.
I was saying I very much appreciate hearing you say that we have to strike a balance. It could be producing two million barrels a day, combined with other more adventurous solutions. It could be a balance between the other forms of energy and the—
Mr. Michel Scott:
You're going beyond what I said. I didn't say that we would set specific limits, but I think the dialogue—
Mr. Christian Ouellet:
You said “balance”. I appreciate that word.
However, could you explain to me the principle you operate on? I understand Mr. Wright's system, but I can't understand yours. Why do you take less water, or why do you recycle all the water? What's the difference between you and the others?
Mr. Michel Scott:
We recycle all the water at various levels and in various quantities. The ConocoPhillips people said they managed to recycle 90% of it and they're aiming for 95%. We recycle 95% of it and we're trying to improve.
That probably depends in part on the quality of our reservoir. We've been lucky to find not only drinking water, or fresh water, that we could have used, but we've also found saline water. We undertook our project with the idea that we would use saline water, but we didn't find any at first. We had to continue drilling wells, a little like what the ConocoPhillips people did. So we managed to put all that together in a much more limited physical space. We produce large quantities in limited space.
Mr. Christian Ouellet:
Mr. Wright, how long did you take to develop the compressed air system?
(1030)
[English]
Mr. John D. Wright:
I think Michel answered your first question, so I'll jump to the second.
The technology that we're using today--patented--was actually invented in 1997 at the University of Bath, and the Government of Alberta...and we purchased the technology from the Government of Alberta in 2001.
[Translation]
Mr. Christian Ouellet:
Could that technique be used for all in situ extraction?
[English]
Mr. John D. Wright:
We think it has applicability throughout most of the in situ region. Certainly, in any conventional sandstone that is sustainable with the SAGD operation, our technology will work. Our technology will work in a number of places that do not have a current technology application, and that actually increases the footprint that our technology can be applied to.
[Translation]
Mr. Christian Ouellet:
If you're the only ones using that technology, is it because it's more costly?
[English]
Mr. John D. Wright:
We're the only ones using it because we're the owners of it. We're experimenting with it to prove that it works. I think any new technology has an evolutionary phase. It goes through three stages: first of all, it's laughed at; second, it's violently opposed; finally, it's accepted as common knowledge by everyone.
[Translation]
Mr. Christian Ouellet:
Is it like a pilot project?
[English]
Mr. John D. Wright:
It was like a pilot project, but we've now moved to the commercial stage, and I think people have stopped laughing.
[Translation]
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you.
Ms. Duncan, go ahead please.
[English]
Ms. Linda Duncan:
Thank you, Mr. Chair.
I'm curious about this term “recycled water”. Does that mean it's a closed-loop system? Do you withdraw the water once and that's it--you don't have to withdraw any further water?
Mr. Michel Scott:
At our operation, when we talk about 95% recycled, we are drawing some new water, but to the tune of 5%, and we're disposing of the water we can't use any more down deeper--below the formation, in fact. There's a new stream, but it represents only 5%; the rest keeps moving around.
Ms. Linda Duncan:
What volume of water is that 5% per year?
Mr. Michel Scott:
For us, for example, at a 35,000-barrel-a-day project, that would be essentially.... If it's 20,000 cubic metres that we circulate every day, it'd be 1,000 cubic metres, or 6,000 barrels.
Ms. Linda Duncan:
Is that per...?
Mr. Michel Scott:
It's per day.
Ms. Linda Duncan:
So it's still a substantial amount.
There's a lot of talk in Alberta about moving toward cumulative impact assessments. When you apply for an expansion or for any new projects into the future, are the projects actually obliged to take into account the cumulative impacts of all other operations and future operations? Is that a regulatory requirement?
Mr. Chris Fordham:
Yes, it is a regulatory requirement. The EIA process is a cumulative assessment of air, land, water, and socio-economic impacts.
Ms. Linda Duncan:
How far into the future is the projection for water use?
Mr. Chris Fordham:
In the future case in an EIA, you would have to include everything that is known or thought about, essentially.
Ms. Linda Duncan:
No. I'm asking if you have to project 20 or 40 years from now, as the tar sands operations continue to expand.
Mr. Chris Fordham:
It would be for at least the life of your project, but probably there aren't any new projects known beyond that time anyway.
You saw Mr. Lunn's presentation, which was specific to water. That is a projection of water needs for everything we know of today.
Ms. Linda Duncan:
That's into the future.
Mr. Chris Fordham:
Yes, it's a projection into the future.
Ms. Linda Duncan:
Okay, thanks.
You've spoken about a lot of evolving technologies and so forth, but there's always that qualifier, “subject to affordability”. Are companies actually required to use the best available technology, and are the projects grandfathered?
Mr. Chris Fordham:
The first part asked whether we are required to use the best available technology. Yes, we are. That is part of most of the applications. We have to demonstrate why we believe it's the best available technology.
What was the second part, again?
Ms. Linda Duncan:
Are the projects grandfathered? In other words, as technology improves, we hear about all this evolving wonderful technology. Is there a requirement that, as it advances, it must be deployed in all the projects?
Mr. Chris Fordham:
It depends on the application. In some instances the answer is yes. For major capital pieces of equipment, it is generally not a requirement, but certainly at a capital turnover it would be expected that they would be replaced with the best available technology of the day.
(1035)
Ms. Linda Duncan:
What would the time span be for capital turnover?
Mr. Chris Fordham:
That depends on the piece of equipment.
Ms. Linda Duncan:
Can you estimate?
Mr. Chris Fordham:
It would probably be five to 20 years.
Ms. Linda Duncan:
Do you mean that in 20 years, all the companies will be obliged to use this new technology to reduce water use or to treat tailings better? Can we expect that five years from now, all the facilities will be switching over to new and improved technologies?
Mr. Chris Fordham:
No. When I said five to 20 years, I was actually speaking of capital equipment. Five years is probably the lifespan for a heavy-haul mine truck. Twenty years would be for a vessel, maybe a boiler, maybe a--
Ms. Linda Duncan:
You're talking about processing--
Ms. Linda Duncan:
--but I'm talking about the use of water and the containment of tailings.
Mr. Chris Fordham:
Do you want to try that one, Calvin?
Mr. Calvin Duane:
With tailings, of course, the technology evolves over time. As your process allows, you do improve as you go forward. Suncor is probably a good example to show this. Since the time of their inception there's been a very good step change going down; each time something comes along, they do apply it.
New projects such as ours employ the technology of the day. Carbon dioxide is available to us to do this because of the advances in technology, and that's going to help us with our tailings pond.
If new technology comes in and it's economically available, or if a process is available to bring it in--that's often a critical element, because the fundamentals of the process may or may not allow something--it comes into play.
Ms. Linda Duncan:
There's that qualifier again, “if it's economically viable”.
Mr. Matt Fox:
Can I add something from a SAGD perspective?
Ms. Linda Duncan:
Sure, quickly; I have another question.
Mr. Matt Fox:
In terms of the draft water directive that's been issued for increasing the regulations on water use in SAGD, all new facilities need to have it installed from the beginning. All existing facilities need to meet that standard within five years, because it does require adding capital equipment, and these things take time.
Ms. Linda Duncan:
So there is grandfathering, then.
Mr. Matt Fox:
That's not grandfathering. It's just getting adequate time for--
Ms. Linda Duncan:
You said new facilities.
Mr. Matt Fox:
New facilities will have to have it installed from the beginning. Existing facilities have to meet that standard within five years.
Ms. Linda Duncan:
Okay. That's for SAGD.
Ms. Linda Duncan:
I'm not sure if it was this panel or the one before that talked about tailings. That's one of the big issues raised by the report that I mentioned to the previous panel, the leakage of tailings. Would I be correct to say that you have independent, qualified scientists do the environmental impact assessments that you table before the tribunals?
Mr. Chris Fordham:
That's correct.
Ms. Linda Duncan:
I have information that comes from the environmental impact assessments by the project proponents, which appear throughout to raise significant concerns about seepage.
For example, there's Shell Canada' Jackpine: “Jackpine seepage from the tailings ponds expected to be of poor quality. The natural shell of groundwater presents potential risks to groundwater.”
There's the Horizon oil sands project: “Closure water from the external tailings area will continue to leak into the groundwater system at a low rate.”
There's the Suncor project, the south tailings pond project, of 2003: “Seepage is the most significant pathway for the STP project to impact aquatic resources. Seepage will flow into Wood Creek sand channel.” Seepage from the STP, therefore, had the potential to change water quality in the lower portion of McLean Creek.
There seems to be list after list.
There's the Firebag project of Imperial Oil: “Firebag downstream of the confluence from the western most tributary could potentially be affected by seepage from the external tailings area.”
So I'm puzzled; if the EIAs produced by your own consultants are indicating that there's going to be a problem with seepage from tailings, it seems to contradict what we're hearing in the testimony from industry, that there is no risk of seepage from the tailings area.
The Vice-Chair (Mr. Francis Scarpaleggia):
Who wants to take that?
Mr. Duane.
Mr. Calvin Duane:
The environmental impact assessment, by definition, requires that companies present the most conservative case possible so that it can be properly evaluated as to, if all things go wrong, what it would look like.
In the case of the Horizon project that you referenced, we indicate in there that we will release seepage out at 530 metres cubed per day, I believe, or something like that. That's just off the top of my head. That was assuming that the tailings pond was sitting over top of permeable sand material. It assumed that any natural barrier effect that would come out from silt to clays and bitumen sitting on the bottom of the pond would not work, when in fact we know that the tailings pond is sitting over top of Clearwater clay, a very impermeable surface, plus the sand, the silts, the clays, and the bitumens that will seal it.
Through the process of the EIA review to the joint federal-provincial panel, that topic was dealt with in some detail. The decision report that came out addressed that, where in fact the consultants said there potentially could be some issue of concern there, where the panel members themselves said they looked at the evidence provided, recognizing that it is a highly conservative case, and they disagreed with the findings of that, based on the evidence presented to them.
That is clearly evident in our joint panel report that was issued on that.
(1040)
Ms. Linda Duncan:
So you still stand firm that there is no possibility of seepage from tailings ponds.
Mr. Calvin Duane:
No, I did not say that. There is seepage that will be there, but the amount that's indicated far exceeds what will actually occur.
As Ian Mackenzie indicated earlier, all things leak.
The Vice-Chair (Mr. Francis Scarpaleggia):
Yes, I read that somewhere in a similar report, that with seepage the groundwater will be contaminated but it will still be usable. That what seems to be the language that comes out of these environmental assessments. Is that a correct characterization?
Mr. Calvin Duane:
Depending on where you sample it, yes.
The Vice-Chair (Mr. Francis Scarpaleggia):
Okay.
[Translation]
We'll now go to the Conservative Party.
Mr. Braid, go ahead please.
M. Peter Braid (Kitchener—Waterloo, PCC):
Thank you very much.
[English]
Thank you very much for the attendance of our company representatives today and for the presentations.
I just have a few questions to go through. If I have time left, I will share it with my colleague Mr. Watson.
Perhaps, if I could, my questions will follow the sequence of the presentations. I'll start with the Suncor presentation.
You indicated, Mr. Fordham, that to date you've already reduced water usage by about 30%, I believe. Looking at it in a future-oriented way, do you have a goal for further water reduction?
Mr. Chris Fordham:
We have not set a specific goal at this point. We are looking into that at the moment, but we're still evaluating various projects that would reduce our water usage.
With respect to the reclamation process, how do we speed that up? What are the methods? What are the ways that we can employ to speed up that process?
Mr. Chris Fordham:
Reclamation is very much driven by the available land on which you can put your reclamation soils and vegetation. The largest areas on the mine sites that become available for those will be the tops of tailings ponds.
As the tailings dikes get constructed, generally they're reclaimed as we go forward. But those are relatively small areas compared with the size of the tops of the ponds. So, certainly, speeding up the time in which those ponds are infilled with a trafficable surface on which you can put reclamation materials will speed up reclamation.
The ERCB has recently come out with a new directive putting some new guidelines around how fast tailings ponds have to be reclaimed. So I think the speed is going to increase in the future.
Mr. Peter Braid:
Yesterday we had a representative from a company called Gradek Energy, which has a fascinating process, a new technology that will help deal with the issue of tailings ponds. There's a pilot project this fall. I've forgotten which company—
The Vice-Chair (Mr. Francis Scarpaleggia):
I think he said it was Syncrude, if I'm not mistaken.
Mr. Peter Braid:
In any event, this company has created, for all intents and purposes, through the use of nanotechnology, a bead that can be placed in the tailings ponds and act as a form of a magnet that attracts all of the bitumen in the tailings ponds and separates it from the water.
Are you familiar with that specific technology? Have you considered it? Is this something we could explore?
Mr. Calvin Duane:
Yes, we've actually met with them; many companies have. I have personally met with them to review that. We are in discussion with them right now to look at the potential of it. It's at that stage.
Mr. Peter Braid:
Okay, very good.
Are there any other comments from any other company representatives?
Mr. Chris Fordham:
I guess I'd be the only other one, because they don't have tailings ponds.
Mr. Peter Braid: Right.
Mr. Chris Fordham: My guess is that we've probably met with them as well. I don't have personal knowledge of that, but we're all constantly exploring new technologies.
Mr. Peter Braid:
Excellent.
With respect to the companies that are drawing and using saline water, I just want to understand that a bit more. You've indicated that saline water is hard to find, so these are groundwater sources of saline water.
Can you elaborate a little bit on how difficult that process is, and, if possible, the percentage of source water that is actually saline? Just help me understand this.
(1045)
Mr. Matt Fox:
The salinity of the aquifers varies significantly as you move across the Athabasca region and into Cold Lake and other areas. It's driven by the proximity to salt in the subsurface, and a whole load of other issues relating to the groundwater movement. So Devon and its Jackfish project can find saline water, which crosses the 4,000 TDS demarcation line. If it's 4,100, it's saline water; if it's 3,900, it's fresh water.
So as you move around the region and drill these water exploration wells, you find a significant amount of variability. It can vary from 1,500 to 15,000 or 40,000 in salinity.
Mr. Michel Scott:
I would just reinforce that. We had one well in particular that was hovering around that 4,000 level. Some days it might have been just under or over, and that's not good enough. We basically said we'd be above the 4,000 mark, and today we use 6,500 total dissolved solids. We're doing work to use even more saline water than that.
I don't know exactly how it is distributed, nor could I answer what the supply is, if that's what you were getting at. That question would probably have to go to some of the water experts.
Mr. Peter Braid:
Okay, very good. Thank you.
Mr. Wright, the THAI process is certainly a very intriguing and encouraging process. Monsieur Ouellet asked many of the questions I wanted to ask you, but perhaps I have one other question for you. What's your assessment at this point of the success of this process?
Mr. John D. Wright:
Our assessment is that it is fully successful. We've moved to a commercial-scale application and have actually expanded our project application to two new areas, which we'll be developing this year. We're also looking internationally at a variety of other heavy oil opportunities where we can apply the technology.
Mr. Peter Braid:
Thank you.
I have a more general question to any or all of you. How do you determine what benchmarks or guidelines you use to determine what percentage of your profits are devoted to R and D? If that's proprietary, that's fine, but please indicate that.
Mr. John D. Wright:
I'll take a stab at that, just because we have an R and D division.
I hope through these hearings you reach the appreciation that our business is a constantly evolving one. It is at the leading edge of technology, and quite often the bleeding edge of technology, where new techniques don't always work as we'd hoped they would.
In general, up to 10% of our capital investment in any year goes to applying existing technologies or new technologies in novel ways to enhance our ability to extract oil and maximize the recoveries we can get from various reservoirs. It isn't just a bunch of scientists in white lab coats; it's guys on drilling rigs running new tools underground and testing new ideas. That is the hardcore R and D that we do.
Mr. Peter Braid:
How much more time do I have?
The Vice-Chair (Mr. Francis Scarpaleggia):
Your time is basically up. If you have a quick question, go ahead.
Mr. Peter Braid:
I have a really good one.
How do you define sustainable development or environmental sustainability?
The Vice-Chair (Mr. Francis Scarpaleggia):
Make it a concise definition, please.
Mr. Matt Fox:
It's a balance of the economic, social, and environmental aspects of project development.
Mr. Peter Braid:
Thank you.
Thank you, Mr. Chair.
[Translation]
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Braid.
Thanks as well to the witnesses for being with us. Your evidence has greatly enriched our knowledge of the oil sands operation.
We'll now go to the second part of our program. We're going to hear from the NGOs, including the Pembina Institute, the World Wildlife Fund Canada, Ecojustice Canada and the Canadian Boreal Initiative.
[English]
Thank you very much for being with us. It was very interesting, and it will add a lot to our report, I'm sure.
We'll take a short break.
(1045)
(1055)
The Vice-Chair (Mr. Francis Scarpaleggia):
I would ask members to take their seats. We'll start with our segment on ENGOs.
Which witness will start? I believe you are prepared for 10-minute presentations.
(1100)
Mr. Simon Dyer (Director, Oil Sands Program, Pembina Institute):
Yes, five to ten minutes.
The Vice-Chair (Mr. Francis Scarpaleggia):
Okay.
Mr. Dyer, go ahead.
Mr. Simon Dyer:
Thank you for providing us the opportunity to present here. We're very happy that the committee has come to Alberta.
My name is Simon Dyer. I'm the oil sands program director at the Pembina Institute, where I manage Pembina's research on oil sands development.
The Pembina Institute is a national sustainable energy think tank that works on sustainable energy solutions. We were founded in Drayton Valley, Alberta, in 1985.
We have researched the environmental impacts of oil sands development for over a decade and we are committed to responsible oil sands development. Unfortunately, Canada’s current approach to oil sands development is a case study in unsustainable development.
The manner in which the oil sands have developed includes many areas of federal jurisdiction beyond impacts on water. Unfortunately, the federal government has been very weakly involved in oil sands environmental management to date, despite these significant areas of jurisdiction.
I have a presentation that I've circulated in hard copy. I hope you will follow along with that.
Given the limited time available, I'll focus my comments on three main areas--the lack of protection of the flows of the Athabasca River, the unsustainable management of tailings, and the lack of adequacy and transparency in monitoring.
The federal-provincial management framework for the Athabasca River gives priority to oil sands production over protection of water and fisheries. Under the water management framework for the Athabasca River, there is no legal requirement for water withdrawals to be halted in order to protect fish habitat. The water management framework has a traffic-light system, identifying green, yellow, and red zones. During the red zone, fish and fish habitat are being damaged. Unfortunately, in this instance, red does not mean stop, and water withdrawals are allowed to continue, even when fish habitat damage is occurring.
Slide five looks at the current and future risks posed to water by unsustainable tailings management practices. It's estimated that there is a total of 720 million cubic metres of impounded liquid tailings on the landscape north of Fort McMurray. This amounts to 288,000 Olympic swimming pools of toxic waste. Tailings lakes now cover 130 square kilometres of land. That's an area the size of the city of Vancouver. On average, one and a half barrels of liquid tailings accumulate for every barrel of bitumen that is produced.
In over 40 years of oil sands development, no areas containing tailings have ever been certified as reclaimed, and industry has never demonstrated that they are able to deal with the toxic liquid waste in tailings lakes.
When you hear evidence from industry saying the first tailings ponds will be reclaimed in the next few years, this is misleading. The mature, fine liquid tailings will simply be piped to another location while those tailings lakes are filled in. Tailings lakes are toxic and contain hydrocarbons and naphthenic acids at concentrations of up to 100 times those found in bitumen.
Another risk is the risk of the catastrophic discharge, of course, which would be unthinkable.
In addition to the risks associated with current tailings production and the current risks in terms of seepage, which I'll talk about shortly, a bigger risk, I think, is the long-term fate of these tailings. Most Canadians would likely be astonished to learn that the accepted way to deal with this liquid waste in the long term is with an unproven concept called the “end pit lake”.
Other industries have end pit lakes. It's a place where you put water in a gravel pit at the end of the gravel pit's mine life, for instance. The oil sands are unique in that their tailings lakes or their end pit lakes will include toxic liquid waste at the bottom. The approved plan is simply to cap the liquid tailings waste with fresh water and hope that through a process called meromixis, in perpetuity, the upper water layers do not mix with the lower layers.
In slide eight, I show a cartoon from CEMA, the Cumulative Environmental Management Association, that shows exactly how these toxic liquid waste dumps are going to be a permanent feature on the landscape.
It's not possible to overemphasize what a risky and unproven concept this is. Concerns about the fact that this concept of an end pit lake has never been demonstrated are continually raised by federal and provincial regulators and by CEMA, yet all oil sands mines have been approved so far with this method. There are 25 end pit lakes approved and proposed so far on the landscape. There's a quote in my presentation that shows how, really, this is a complete experiment. We've never demonstrated that this is a sustainable solution.
I now want to talk about tailings seepage. Tailings lakes are leaking. I know you've heard mixed opinions on this during your stay. It's not surprising that there are mixed opinions, because there is a real absence of publicly available data to get to the root of this problem.
Last year, the Pembina Institute was commissioned to conduct a review of potential seepage from tailings ponds. We contacted the Government of Alberta on at least three occasions, asking for information on seepage data from groundwater wells. No data was provided on any occasion. It is unclear whether cumulative summaries of the data exist, whether the governments of Alberta or Canada have the capacity to analyze that data, or whether the Government of Canada has seen that data.
(1105)
Despite some of the testimony you may have heard, assessments project that all tailings lakes leak, even after mitigation measures are accounted for. So even after the pumping you've heard about to move that material back to tailings lakes, there is still residual leaking into the environment--into the groundwater and the Athabasca River and its tributaries.
We did a very conservative assessment of environmental impact assessment data and found that tailings lakes could be currently leaking into the ground water at a rate of 11 million litres per day. This rate of leakage could more than double if current proposed projects proceed.
Occasionally, actual validated information on seepage is available. For instance, if you look at some recent approvals for Suncor, it was reported that their pond 1 was leaking into the Athabasca River at a rate of 1,600 cubic metres per day.
Finally, I want to comment on the availability and adequacy of publicly accessible data on oil sands environmental performance.
One of the unfortunate defining features of oil sands development is the lack of transparency and the absence of publicly available data for many elements of environmental concern, such as tailings seepage, tailings reclamation performance, and access to RAMP data. A clear and cumulative picture of the potential scale of tailings lake leakage has never been presented by the Alberta or federal government. It's been up to environmental organizations to try to project what those impacts may be.
There are many stakeholder concerns about inadequate monitoring of the Athabasca River. The regional aquatic monitoring program, RAMP, has been criticized as lacking provincial and federal government leadership. Federal reviewers of RAMP have raised significant concerns about the program itself, and we are not aware that these shortcomings have been addressed.
I'll also make it clear that the Pembina Institute has not been a member or participant in RAMP over the past six years. We simply have concerns about the credibility of the program and lack capacity to participate in all these different processes.
In conclusion, we urge the federal government to play a much more active role in oils sands environmental management. I would like to draw your attention to three specific recommendations.
First, we recommend that the federal government ensure no new approvals for oil sands mines until a scientifically based ecosystem base flow for the Athabasca River is established, beyond which withdrawals by all oil sands operations during the red zone or low-flow periods would be prohibited. The tragedy is that using off-stream water storage is an economically viable approach for the industry, but there's no regulatory requirement to store water and halt withdrawals, so we continue to see withdrawals during these low-flow periods.
Second, the federal government should ensure that no more oil sands mine approvals should be granted that include mature fine tailings or that propose unproven end pit lakes as a reclamation strategy.You've heard a lot of talk about the technological silver bullets that are going to improve the oil sands industry, but technology in the absence of regulation isn't going to drive the sort of change we need to see. Industry has been researching tailings ponds for 40 years, and it hasn't demonstrated they're able to deal with the solution. We need the regulatory levers that prohibit this unsustainable practice.
Finally, independent and transparent monitoring that has a strong, peer-reviewed, scientific basis is needed. Federal leadership is required to ensure that the data is publicly available and greatly enhanced. It should include comprehensive water quality, tailings reclamation, and tailings seepage information.
Thank you very much.
The Vice-Chair (Mr. Francis Scarpaleggia):
Thank you, Mr. Dyer.
Mr. Maas, you're next to present.
(1110)
Mr. Tony Maas (Senior Policy Advisor, Fresh Water, World Wildlife Fund Canada):
Thanks for the opportunity to speak to you today on what I see as one of the most important freshwater issues in Canada today.
My name is Tony Maas. I'm senior freshwater policy adviser with WWF Canada.