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Assignment2: Westcore Oil Sands Mining: Environmental Liabilities & Proposed Management Framework

Sofia Habity
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University of Manitoba Environmental Responsibilities and the Law ENVR 3160 Jonathan Scarth and Leanne Shewchuck 30-Nov-2012

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework Introduction Westcore is a crude oil production company that operates in the Athabasca region. The mining facility is located 50 km west of Fort McMurray. Westcore was issued a lease from the Alberta Department of Energy in order to invest in the province's oil sands resource. The department is responsible for managing crownowned mineral rights. The Mines and Minerals administration Regulation authorizes the Alberta Department of Energy to issue oil sands agreements. The area containing oil sands deposits occurs within the boreal forest. Oil sands comprise 142 square km(2) and active mining is stretched over an area of 715 km. Westcore operates an area of land extending over 100,536 acres which covers over 3 billion mineable barrels of bitumen. In-situ practices are implemented; this involves heating up the ground beneath Alberta's boreal forest and wetlands. The company also practices open pit mining methods, which conveys more damage to its surrounding environment. In detail, Crushed oil sands are mixed with hot water and then sent to another plant to have the bitumen extracted. After sand and other constituents are separated from bitumen, they are deposited in a tailing pond. Regarding this, the company has yet to apply for a land reclamation certificate from the government . At this point, bitumen is sent to the Scorfort upgrader facility 420 km south to be converted into synthetic oil . Notably, Westcore was also granted a license to construct the pipelines that conduct extracted bitumen to the upgrading facility. Liabilities description and Analysis Both the extraction and transportation of oil sands are environmentally destructive. Pipelines play a major role in carrying Bitumen from the extraction plant to the upgrading facility. They operate within Alberta's boundaries and fall under the jurisdiction of the Energy Resource Conservation Board. Pipelines can cause damage to surface and groundwater, leading to a potential ingestion of oily waters by fish or other species, which can have detrimental effects on their health. The Fisheries (Alberta) Act prohibits any sort of activities that harm fish habitat. Penalties under the Act are $ 1-million and/or three years imprisonment. Likewise, the design, construction, operation, and maintenance of the pipelines should comply with the Alberta's Pipeline Act and Pipeline Regulation . Open pit mining techniques result in extensive land disturbances in Northern Alberta's landscape, destroying vast boreal forest wetlands . Additionally, most of the wetlands are connected through surface and groundwater hydrology
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Blake, Cassels & Graydon LLP Canadian Association of Petroleum Producers Canadian Natural Energy Resource Conservation Board Fisheries Act, c. F-14 Energy Resource Conservation Board

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework which increases their susceptibility to damage from oil sands developments. Thus, Westcore is subject to government land reclamation requirements Oil sands companies are currently held to a zero-discharge policy by the Alberta Environmental Protection and Enhancement Act, for this reason, 90% of the water used to process oil sands ends up in the toxic tailing ponds that line the Athabasca River, threatening the quality of the whole river basin, tributaries and also biota. Alberta Environment established strict limits on how much water oil sands companies can remove from the Athabasca River during low flows, limiting consumption to 1.3% of the annual flow. In other words, industries could be restricted to less than half of their normal requirements following the Water Management Framework for the Lower Athabasca River region . An approval is necessary for any operation that uses large amounts, or disturbs ground or surface water. However, the current government management framework governing oil sands water withdrawals from the Athabasca river does not require companies to halt water withdrawal during low flow periods even when fish habitats may be impacted. Tailing ponds have a high level of toxicity. This was evidenced by their arsenic, mercury and polycyclic aromatic hydrocarbons contents, together with propane cannons. The latter are commonly used to keep ducks from landing and have a severe toll on them. To enumerate, annual birds mortality on current tailing ponds could range from 8000 to 100,000 birds . Numerous penalties are enforced under the Migratory Birds Convection Act in case of a deposition of oil, oil waste or any other substances harmful to migratory birds. Exposure such as this is embarrassing and can have a severe impact on the public reputation of Westruce. Tailing ponds are built directly on ground, with walls that are made from ground materials . In detail, tailing ponds constructions begin with a creation of a dyke using the overburden surface rock and soil that was first removed during the mining and extraction process to access the soil sand periphery. Because tailing ponds are built directly on ground that conducts water, contaminated water is more likely to leak through the base and the sides of the tailing ponds into water supplies. Significantly, embryos of fish living in waters in the vicinity of oil sands operations have very high rates of mortality as well as deformities among the
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William Marsden, Stupid to the Last Drop 2007 Canadian Association Of Petroleum Producers, 2012 http://environment.alberta.ca/index.html Alberta Environment and Fisheries and Oceans Canada, Water Management Framework
Pembina Institute, December 2008.

Migratory Birds Convention Act ( 1994, c. 22)


Michelle Mech, 2011

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework survivors . Species exposed to PAHs can exhibit problems in their development and high vulnerability to diseases. This triggers strict penalties that can be enforced by the Fisheries Act. Planning and employing effective conservation and reclamation measures in order to recondition the land to a state fit for future use is also mandatory. The government of Alberta also requires that oil sands operators post a security deposit to act as a financial mechanism regarding any future mishap that may occur during the life cycle of oil sands mines. Other species endangered by oil sands activities include Caribou, Lynx and wolverine; this is as a result of habitat fragmentation . The cumulative Environmental Management Association reclaimed that in-situ steam plants would exterminate Caribou, fish, bear and moose over a region of 100,000 hectares . Woodland Caribou are threatened in Alberta and are monitored and protected by the government pursuant to the Wildlife Act. In addition, maximum penalties under the Species at Risk Act can reach $2 million for a corporation. Air pollution is also a significant issue related to oil sands projects. Firstly, bitumen is composed of 83% Carbon contributing to the greenhouse effect in the form of CO2. In addition, large amounts of pollutant such as hydrogen sulfide and volatile organic compounds are being released into the air, coupled with nitrogen oxide and sulfur dioxide which contribute to the formation of acid rain. Air pollution is regulated by Alberta's Climate Change and Emissions Management Act , and also governed by the Canadian Environmental Protection Act which regulates the release of substance that adversely impact the environment and imposes several obligations in a case of a potential release. Moreover, Alberta Environment may issue an environmental protection order under the Environment Protection Act requiring all adequate measures necessary well in advance of a release. The federal Crown has a legal duty under constitutional and common law to not only consults with Aboriginal People and Metis communities occupying the Athabasca region, but also to address their claims about any oil sands activities. The Indian Oil and Gas Act , and the Indian Mining Regulations govern the disposition, exploration and development of oil, gas, mines and minerals on reserved and surrendered lands. Bitumen is specifically included. Proposed framework to address Environmental liabilities
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David Schindler, CBC News, 2008 Michelle Mech, 2011 Andrew Nikiforuk, 2009 C-16.7. 2003 S.C. 1990, c. 33 R.S.C. 1985, c. I-7 C.R.C. c. 956

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework It is very important to realize that Oil sands operators are not only under intense scrutiny from stakeholders but also from provincial and federal regulators. Westcore can employ several strategies to address the environmental liabilities described above. The best way to achieve this is by preventing environmental problems, and showing due diligence. Updating techniques and technologies is very crucial in terms of protecting the environment. Promoting energy, land and water usage will lead to a step wise reduction in environmental impacts while maintaining the project budget. The proposed framework will employ many strategies and tools in order to ensure that all of the above requirements are met. Hence, goals, targets, policies and guidelines will be established. Westcore's environmental management scheme will be evaluated during the environmental impact assessment (EIA) under the Canadian Environmental Assessment Act. An extensive EIA review will take place to assess any potential impacts, as oil sand projects are identified in the environmental assessment (mandatory and exempted activities) regulation . The review will take into consideration mitigation policies and any other programs that will be implemented by the company. All will be included in the EIA report to support decision making and determine the magnitude of potential risks. The company's Environmental Management System will ensure all possible risks are included. This can be measured using past records, or new technologies such as GIS. A key component of the environmental management of oil sands projects is to meet all applicable environmental laws. Likewise, the Environmental Management System will ensure that Westcore is operating efficiently by incorporating all possible risks, ensuring proper planning and monitoring. Integrating a thorough audit as a critical management tool will also provide guidance for risk managements and enhance environmental performance. In short, minimize all sorts of environmental liabilities . Westcore will establish and commit to an environmental policy. An elaborated evaluation and review of performances will follow. Documentations of audits shall be saved for future reference. Implementing an Environmental Management System will not only promote cost effectiveness by lowering pollution of oil sands facilities but also promote environmental leadership . The Albian Sands and Imperial Oil provide tangible evidence of having an accredited Environmental Management System. This was demonstrated by their lowest emission rates of toxic substances Westcore will deal with land disturbances through remediation and land reclamation. Land reclamation is crucial in ensuring due diligence is upheld. In this case, proper measures are to be followed in order to be issued a reclamation
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Kevin S. Hanna, 2005 Lecture 9, EMS, 2012 Environment Protection Agency Pembina Institute, 2008

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework certification that demonstrates the reclaimed land is as ecologically productive as it was prior to mining. In March 2008, Syncrude Canada received the first reclamation certificate for a 104 hectare parcel of land . The construction of a tailing pond will be accompanied by a groundwater monitoring and seepage capture facility. Constructing dishes around the tailing pond to intercept any seepage from entering regional groundwater systems or waterways will increase the level of water protection. Westcore will consider adopting new technologies such as consolidated and dry tailing processes proposed by Synenco Energy Northern . Suncor Energy is now drying its tailing into a material solid enough to be reclaimed in a fraction of the time that earlier technologies required. This process is called the TRO (tailings Reduction Operations) Showing support for the Alberta Biodiversity Monitoring Institute will be a worthy investment and major indicator for Westcore's commitment to monitor biodiversity. Shell, Albian, Petro-Canada are all financial supporters of the Alberta Biodiversity Monitoring Institute. To target the reduction of toxic substance such as nitrogen dioxide, sulfur dioxide, and volatile organic compounds, it is encouraged to take an initiative to target emissions of such toxic substances. Setting internal targets is an essential component of an environmental management plan even though this metric is not included under the Global Reporting Initiative (GRI) guideline . Wetscore will control pollutants that can cause smog and acid rain by incorporating technologies such as flue scrubbers. This will make sure Wetscore is meeting air quality standards. The Syncrude emissions reduction project (SERP) involves the incorporation of a new scrubbing technology involving the retrofitting of a flue gas scrubbing system into the original cokers. This process will reduce stack emissions of sulfur compounds by 60% per day. Moreover, freshwater consumption will be minimized following the recognized metric under the GRI guideline and also conforming with ISO 14001 regarding internal water reduction targets. This is a key component of a complete Environmental Management System. Westcore will consider a voluntary strategy to halt water flows in order to reduce impacts on the Athabasca River during critical periods such as low flows and fish spawning seasons. This will be achieved by having sufficient on-site water storage to provide process water when withdrawals from the Athabasca River are restricted, while conforming to the water management framework standard. This strategy is implemented by PetroCanada Fort Hills project that was designed for an on-site storage of up to 45
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Environmental Management Of Alberta's Oil Sands The Pembina Institute Canadian Association of Petroleum Producers Global Environmental Management Initiative (GEMI), ISO 14001

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework days. It is advantageous for Westcore to consult with aboriginal People, even if it does not owe duties to consult. This will assist the company in obtaining regulatory approvals and land use permits on a timely basis. Traditional knowledge will be significant when creating an Environmental Management System. Ensuring proper compensation measures will also be taken into consideration in a situation such as property loss. Equally important, it is necessary to educate and train employees to ensure policies are decently implemented, and making sure due diligence is maintained. Employees should be aware that they may become liable for the consequences of an oil spill if they participate in, exercise control over, or have responsibility for controlling that activity. Tracking performances is very crucial to make sure goals are being met. If targets are not being met, corrective action is taken and this cycle can be repeated until improvement occurs. Conclusion Westcore faces numerous environmental liabilities. Migratory birds, fish habitat, and wildlife are all affected by tailing ponds toxicity. Air and water qualities are also being impacted by oil sands operations. Not to mention destruction of the boreal forest wetlands and biodiversity. In essence, including Aboriginal people in decision making processes is also crucial. Westcore will ensure that all environmental potential problems are tackled and mitigated. Implementing a regimented strategy and incorporating the best available practices and technologies and a solid environmental management system will ensure improvement is reached while keeping environmental impacts under control.

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework

Blakes, Cassels & Graydon LLP. Overview Of Canadian Legal System Related to Oil Sands Activities. Retrieved on Nov 15 from : http://www.blakes.com/english/legal_updates/reference_guides/OverviewofCanadianLegalSyst emRelatedtoOilSandsActivities.pdf Canadian Association Of Petroleum Producers (June 2012). Land Use In Canada's Oil Sands. Retieved from: http://www.capp.ca/getdoc.aspx? DocId=193754&DT=NTV Canadian Natural (2012). Oil Sand Process. Retrieved on Nov 15 from: http://cnrl.hgcareers.com/en/media/cnrl/The%20Oil%20Sands%20Process.pdf Energy Resources Conservation Board (2012). Regulations & Directives: Pipelines. Retrieved from: http://www.ercb.ca/regulations-and-directives/by-topic/piplines Fisheries Act ( 1985, c. F-14, current to 2012-09-19 and last amended on 2012-0629). Retrieved from the department of justice Canada website: http://lawslois.justice.gc.ca/eng/acts/F-14/ Energy Resource Conservation Board (2012). Alberta Regulation: Pipeline Act & Pipeline Regulation. Retrieved from: http://www.ercb.ca/actregs/pl_reg_091_2005.pdf William Marsden (2008). Stupid to the Last Drop: How Alberta Is Bringing Environmental Armageddon to Canada. 256 p

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework Alberta Environment Fisheries And Oceans Canada (February 2007). Water Management Frramework: In stream Flow Needs and Water Management System For the Lower Athabasca River. Retrieved On Nov 10 from: http://www.dfo-mpo.gc.ca/regions/central/pub/water-eau/pdf/water-eau_e.pdf Climate Change And Emissions Management Act ( 2003, C-16.7, current as of July 1, 2009). Retrieved on Nov 12 from Alberta Queen's Printer website: http://www.qp.alberta.ca/570.cfm? frm_isbn=9780779740956&search_by=link Canadian Environmental Protection Act ( S.C.1999, c.33). Retrieved on Nov 12 from Department of Justice Canada website: http://laws-lois.justice.gc.ca/eng/acts/c15.31/ David Schindler (Oct 18, 2012). Five decades of doing science, advocating environmental policy. CBCNews Canada. Retrieved on Nov 20 from: http://www.cbc.ca/news/canada/story/2010/10/15/f-david-schindler.html Michelle Mech (May 2011). A Comprehensive Guide to Alberta's oil Sands: Understanding the Environmental and Human impacts, Exports, Implications, and Political, Economic, And industy Influences. P:110 Andrew Nikiforuk (2008). Bitumen Oil sands: Slick Science, Canadian Business Magazine. p. 32 The Indian Oil and Gas Act(R.S.C., 1985, c. I-7). Retrieved on Nov 12, from the Department of Justice Canada website: http://laws-lois.justice.gc.ca/eng/acts/i-7/ Indian Mining Regulations (C.R.C., c. 956). Retrieved on Nov 12, from the Department of Justice Canada website: http://lawslois.justice.gc.ca/eng/regulations/C.R.C.,_c._956/index.html Kevin S. Hanna (2005). Participation. P272 273. Environment Impact Assessment: Practice and

Leanne Shewchuk (2012). Lecture 9. Environmental Management System. Environmental Protection Agency (2012). EMS. Retrieved on Nov 20 from: http://www.epa.gov/ems/ Dyer S., Moorhouse J., Powell R. (2008). Under-Mining the Environmental: The Oil Sands Report Card. The Pembina Institute. P 1-72

Westcore Oil Sands mining: Environmental liabilities and proposed management Framework

Environmental Management of Alberta's Oil Sands. Government of Alberta guide. P: 1-26 Global Environmental Management Initiative (GEMI) (March 1996, Revised Nov 2000). ISO 14001 Environmental Management System Self-Assessment Checklist. Retrieved Nov 23 from: http://www.gemi.org/resources/iso_111.pdf