Environment Committee on March 30th, 2010

[The Chair, Conservative, James Bezan]

I'll call this meeting to order.

We are broadcasting by webcam. We are working by video conference today and we're going to continue on with our study of the study of the oil sands and Canada's water resources, pursuant to Standing Order 108(2), and of course the motion that we passed earlier in the month.

Joining us by video conference in Calgary is Roger Gibbins, president and chief executive officer of the Canada West Foundation.

Can you hear me, Mr. Gibbins?

[Dr. Roger Gibbins, President and Chief Executive Officer, Canada West Foundation]

I certainly can, yes.

Can you hear me?

[The Chair, Conservative, James Bezan]

Perfect. Yes, we can.

Also in Calgary, I believe we have Dawn Farrell, chief operating officer with TransAlta Corporation.

Is Ms. Farrell there?

[Dawn Farrell, Chief Operating Officer, TransAlta Corporation]

Yes, I am.

[The Chair, Conservative, James Bezan]

Okay. Good.

And as an individual, from Edmonton by video conference we have Dr. David Schindler, professor of ecology at the University of Alberta.

Dr. Schindler, you can hear us?

[Dr. David Schindler, Professor of Ecology, University of Alberta, As an Individual]

Yes, I can.

[The Chair, Conservative, James Bezan]

And we have as well Mr. Graham Thomson, who's a journalist.

Can you hear us, Mr. Thomson?

[Graham Thomson, Journalist, As an Individual]

Yes.

[The Chair, Conservative, James Bezan]

We're all set to go. I do remind witnesses--I know you've been told--to keep your opening remarks to under ten minutes, and then we'll go into our question and answer rounds.

If you could kick us off, Mr. Gibbins, we'd appreciate that.

[Dr. Roger Gibbins]

I'm happy to do so.

I should point out at the outset that I am not a David Schindler. As my in-laws pointed out, I'm not a real scientist; I'm a political scientist. But I've been fairly heavily involved in water policy work within Alberta, so I would like to take a few minutes to establish some contextual factors that you may want to keep in mind as this conversation unfolds.

First of all, for those of you who are on the committee and not from Alberta, there is a very fundamental divide in the province between north and south when it comes to water issues. In the south, where the bulk of the population is and where the oil sands are gone, water quality is not a big issue, but water supply and potential shortages of supply are in fact very big issues.

We have river basins to the south that are essentially tapped out, and we also have interprovincial issues in the south as the water flows out of Alberta into Saskatchewan and Manitoba. The south is a basin consumed by supply issues, whereas the northern part of the province has few people and lots of water, so it's a different environment.

Supply issues in the north tend to be a seasonal issue, not an overall issue, so when we get into late summer there are issues in terms of the withdrawal of water for oil sands. Unlike the south, water quality is a big issue. A lot of focus is around the potential impact of the oil sands on water quality, and there's more of a concern about downstream communities and the effect on downstream communities. In the south, the impact is on the supply of downstream communities, not on the quality of water. You just want to keep in mind that Alberta has two very distinct water communities.

The second point I will make is that the water issues surrounding the oil sands are, in many ways, easier to deal with than the greenhouse gas issues around the oil sands. The intensity of water use has been going down over time. There's been a lot of technological change. There's a lot of recycling that's used in the oil sands development and the increasing use of brackish water. And finally, on the tailings ponds, which we know so well through ads, here again is a use of water that is probably going to be technologically obsolete within the foreseeable future. The water issues surrounding the oil sands are ones in which there's a lot of activity going on and the problems are less intractable than they are when we come to greenhouse gas issues.

The third point, and next to last point, is that public opinion polling in the province and in the country at large suggests that water issues will trump concern over greenhouse gas issues for the Canadian public. We've seen a waning interest in global warming that has not eroded public interest in environmental issues that we can see, touch, and feel. So water remains a pretty important and sensitive issue on the public policy landscape.

The last point I will make is that within Alberta, water policy has been a matter of intensive development for the past half decade now. Alberta put into place the Water for Life strategy, and we're now working on putting in a land use framework strategy that's built around a lot of water concerns. So although you may not want to argue that we've got everything right in the province, this is not a policy backwater by any means, as Alberta and British Colombia probably have the most aggressive policy approach to water.

So when I look at water issues in the province, I don't see a lot of big holes that other governments might want to step into. This is an area of very active policy creation, of very active policy deliberation, which again is not to say that we necessarily get it right, but it's certainly very much on the table.

With that, I'll pass on to my colleague.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Gibbins, and thank you for keeping your opening remarks brief.

Ms. Farrell, if you can take the floor now, we would appreciate it.

[Dawn Farrell]

Thank you.

Thank you, members of Parliament, fellow panellists, and other guests. Good afternoon. We really thank you a lot for this opportunity to talk about our CCS project here today.

For those of you who may be unfamiliar with TransAlta, we are Canada's publicly traded power generator and wholesale marketer of electricity. We have power plants in every province, from British Columbia to New Brunswick, with the exception of Manitoba. We also own and operate power plants in the United States and in Australia. In total, we have 185 plants and 10,000 megawatts of capacity, which makes us about the same size as BC Hydro.

We're celebrating our 100th year this year. We started out as a hydroelectric power producer, moved into thermal generation, and in the last 15 years have developed extensively in renewables. It may surprise you to know that TransAlta is Canada's largest wind developer and that more than 22% of our fleet is from renewable sources.

Our growth strategy is exclusively focused on clean energy, both in renewables such as wind, hydro, and geothermal, and in clean fossil technologies, such as CCS with Project Pioneer, which is what I'm really here to talk to you about today.

Project Pioneer, for those of you who don't know, is a partnership of private industry and government and will be one of the most significant initiatives on CO₂ in the next decade in Canada. It's designed to preserve the economic value of our vast natural resources; it will advance Canada’s reputation as a developer of clean energy solutions and it will actually reduce CO₂.

Just as an aside, we are really pleased to have the Government of Canada as a partner in this initiative. With five major CCS projects currently in development in Canada, we believe our country is leading the world in developing the G-8 target of 20 CCS projects around the world by 2015.

By 2015, Project Pioneer will be amongst the largest, fully integrated CCS systems in the world. We will build it to retrofit to our Keephills 3 coal plant, and it will use the chilled ammonia process to capture and permanently store a million tonnes of greenhouse gases per year.

The first stage of Project Pioneer will be to store the captured CO₂ in several deep wells in a geological formation next to Keephills. We will inject the purified CO₂ underground more than two kilometres deep through drill sites identified in conjunction with the Wabamun Area CO₂ Sequestration Project, or WASP study, headed by Dr. David Keith of the University of Calgary. We expect this stage to last at least two years.

The second stage of Project Pioneer will stop geological sequestration and instead transport the captured CO₂ via pipeline to mature oil fields about 70 kilometres away for enhanced oil recovery.

The benefits of the project are both environmental and economic. On the environmental front, I'd really like to stress that a million tonnes of CO₂ will be annually sequestered from the coal plant, which is equivalent to removing 160,000 cars from Canada’s roads every year. In addition, the capture will reduce SO₂ emissions and particulate matter by about a third of what they are today.

On the economic front, Wright Mansell Research has estimated that over the life of Pioneer, it will increase Alberta’s GDP by $2 billion to $3 billion; increase labour income by about $675 million; efficiently extract an additional 22 million barrels of oil production from existing oil fields in Alberta; increase federal, provincial, and local government revenues by between $259 million and $1.2 billion; and add 8,800 person-years worth of employment.

As I have mentioned, Pioneer’s disposal plan for the captured CO₂ will be to inject a million tonnes annually underground, first into permanent geological storage and then into mature oil fields.

As the Integrated CO₂ Network has concluded, EOR can be an economic catalyst to advancing CCS projects across Canada, particularly in Saskatchewan, Alberta, and British Columbia.

However, over time, the expected amount of CO₂ to be captured in Canada will greatly exceed what can be developed for EOR, so eventually some of it will have to be sequestered in geological formations.

Fortunately in Canada, a number of geological formations hold promise for secure, long-term storage of CO₂. Direct storage at these locations will be necessary to handle the large volumes of CO₂ associated with capture over the longer term. These locations include depleted oil and gas reservoirs, deep and uneconomic coal formations, and deep saline formations. Deep saline formations can be found in various areas of western Canada several kilometres below the land surface and geologically separated from ground water sources, which I think is of interest to the committee today.

Specific injection sites for Project Pioneer will be determined in conjunction with the pre-existing WASP study. This study--of the region in the immediate vicinity of our Keephills plant--recently concluded: storage capacity for CO₂ is conservatively estimated to be 250 million and 400 million tonnes; seismic analysis indicates no faulting in the study area; and an estimated 34% of the CO₂ dissolves within the first year of storage, while 56% of the CO₂ will be dissolved after 50 years.

The CO₂ is initially trapped primarily by physical means below capped rock. Over time, there are additional chemical mechanisms to immobilize the CO₂ to prevent any potential release. For example, the sequestered CO₂ will mineralize with the rock, be trapped in small pores of the permeable rock, and dissolve into water trapped deep within the formation. We will use the study's findings plus additional seismic investigation to locate test wells within underground formations near Keephills. Our plans are to drill several three-kilometre-deep test wells to establish injection capability for the full rate of 3,000 tonnes per day, which turns out to be a million tonnes per year for Pioneer.

I just want to talk for a minute about the safety of underground storage. CCS includes a mixture of both proven and emerging technologies. What is exciting about Project Pioneer is that it fully integrates both those proven and emerging technologies on a large scale. It will be the first large-scale project of its type in the world when it's finished. Our project will include a full range of capture, transportation, and storage of CO₂. You all know that CO₂ transportation via pipelines for EOR has been under way in Canada and the United States for a decade. You probably are familiar with the Cenovus project in Weyburn, which has been often talked about in this context.

CO₂ storage is used in a number of countries and has been extensively studied as to the integrity of the chosen geological formations to ensure that no leakage occurs.

In Canada, the geological formations being considered as likely candidates for long-term CO₂ storage have already proven safe for storing other gases and liquids. These same formations have trapped crude oil and natural gas underground for millions of years. The formations consist of layers of permeable rock capped by a thick layer of impermeable rock. While the gases and fluids can pass through or be stored in the pores of the permeable rock, they cannot move up past the impermeable rock. It acts as a cap. As a result, any CO₂ injected into the permeable formations remains trapped there.

The Petroleum Technology Research Centre recently conducted a risk assessment process in 2004 to evaluate the long-term result of CO₂ injected into the Weyburn reservoir. In a case study, 4,000 parameter combinations were evaluated and the results indicated that after 5,000 years there was a 95% probability that 98.7% to 99.5% of the initial CO₂ in place will remain stored in the geosphere for 5,000 years.

Across western Canada there are about 40 sites where acid gas--a combination of hydrogen sulphide and carbon dioxide--is currently being injected into deep underground formations for permanent storage, and this has been going on for decades. Right now, about two million tonnes of acid gas are injected and stored underground every year. This is a perfect analogy for CO₂ geological storage.

According to the Alberta Geological Survey, incidents have been rare and minor and have not resulted in leakage of acid gas into groundwater or the atmosphere. As opposed to hydrogen sulphide, it is important to note, carbon dioxide is not toxic, is not hazardous, and is not flammable. This proves a scientific basis and a proven track record for the safe injection of CO₂ underground, and this is how Project Pioneer will proceed--safely, or not at all.

I know I'm running out of time here, so I'll just take a minute here to talk about our monitoring, because I think it is quite important to understand.

As for all human activities, there are always risks involved. Project Pioneer will employ a highly competent and experienced team of subsurface geoscientists who will make use of all available data to ensure that the formations recommended for CO₂ sequestration have the necessary features to ensure they will serve as safe, long-term containers for CO₂ storage. There will be additional safeguards recommended for any ongoing CO₂ sequestration, and these will all be managed through a properly designed monitoring, measurement, and verification program.

I've just got a couple of minutes left here. Do you want me to continue, or do you want me to wait--

[The Chair, Conservative, James Bezan]

Actually, your time has expired, but I'll check with the committee if they want to hear the rest of it.

No. Okay, we do have your comments here in circulation, so they can refer to your conclusion starting on page 15 in English. We'll thank you for that right now, Ms. Farrell, and you can add to it during the question and answer round.

[Farrell]

Okay, thank you.

[The Chair, Conservative, James Bezan]

With that, we'll move onto Dr. Schindler. You have the floor.

[Dr. David Schindler]

I have a slide projection I'd like to make.

I'm going to start with our study that was set up to examine the claim of industry and the Alberta government that no pollution from the oil sands industry gets into the Athabasca River. After seeing sights like the one shown here, and this one, and having studied watersheds for 40 years, my guess was that these claims were erroneous.

Also, the last time RAMP was reviewed, the program was found to be totally wanting. We thought it was worth having an independent study. So what we did in this study was to first use GIS to map the McMurray formation, which is the bitumen-laden formation shown in the lightest colour here, and we sampled at every site that you see on the map, several down the length of the Athabasca, slightly above Fort McMurray to Fort Chipewyan, and then on every tributary upstream.

The first thing we did was sample snow. This was the entire winter's accumulation. We sampled it at 31 sites. We did this because there has been no airborne monitoring in the Athabasca area since 1981--at least that's been reported.

So here is a profile of snow. You can see the black layers in it. We filtered the snow, and this array is from Fort McMurray on the left to Fort Chipewyan on the right. Each of the little side branches represents a tributary.

These are the particulates on the filter after filtering 900 millimetres of snow water, indicating how much particulate was in the snow.

This shows the melted snow at impacted sites. It actually had an oil layer on top of the water after it was melted. We found that airborne contaminants were detectable for a 50-kilometre radius around the two upgraders near our site AR6, as shown here.

If you look at the patterns going downstream, AR6 is again the upgrader location. You can see high contamination of polycyclic aromatics, including several known carcinogens, near that centre of activity and also at the bottom of the impacted tributaries.

We saw the same thing for every toxin we looked at: mercury, arsenic, lead, you name it. When we looked at the amount that these were elevated in the snow--both in particulates in the snow and dissolved and in tributaries and in the water of the Athabasca rivers--we found that every one of these toxins was elevated. They're elevated above background even as far down as Lake Athabasca.

Our data agreed with the Environment Canada National Pollutant Release Inventory. I'll just show you three, but probably all would be the same. Mercury emitted from these plants has increased three-fold in seven years, lead has increased four-fold in six years, and arsenic three-fold in six years as well. All of these contaminants are being spewed into the atmosphere, which the companies are reporting to Environment Canada. This is why we are seeing these elevated concentrations in snow and in the river water.

We also found high concentrations of several contaminants--that are known to be high in the tailings ponds--under ice at sites that are just downstream of tailings ponds. This indicates that there is some effect of tailings pond leakage under winter low flow conditions.

So we conclude from our results that their industry is adding substantially to the contaminant burdens of the Athabasca River by both airborne and waterborne pathways. All thirteen elements on the U.S. EPA's priority pollutant list were higher within a 50-kilometre radius of the upgraders on the river. Environment Canada's NPRI emissions data indicate that these same elements are being spewed into the air in increasing amounts.

The oil sands industry is making these reports to Environment Canada, but it's not what they are claiming to the public. This is shown in these various myth buster full-page ads that have been running in newspapers across Canada. Their claims about contaminate release, water use, and reclamation are simply not true.

So our evidence and that from the NPRI indicates that oil sands companies should be charged under the Fisheries Act. Clearly they're discharging deleterious substances into fish-bearing waters. One wonders where the enforcement of this act is.

I think this monitoring program carried out by RAMP is totally incompetent, as the reviewers of the program in late 2004 already concluded. I think a lot of public trust has been lost.

The only agency with the expertise to carry out a decent monitoring program is Environment Canada. I think given the lack of public trust, there should be an oversight panel of scientists not connected with industry and not susceptible to muzzling by government to help regain public confidence. There should be annual public reports that are made widely available. Industry should continue to pay for the program, but it should not be run by industry.

We have restrictions on airborne and waterborne pollutants from power plants. These are comparable, and in many cases increasing to what we see from large power plants. Clearly some additional restrictions are in order. It's time we had some hard goals for reclamation of mines and tailings ponds and watershed protection.

That's all I have. Thank you.

[The Chair, Conservative, James Bezan]

Thank you, Dr. Schindler.

We'll continue on with our final witness.

Mr. Thomson, you have the floor.

[Graham Thomson]

I'm sorry. We have no audio. I can see you, but I can't hear you.

So I'll just go ahead?

[The Chair, Conservative, James Bezan]

Yes, please.

[Graham Thomson]

Thank you for inviting me to appear today. I too am no David Schindler, not even a Roger Gibbins. My name is Graham Thomson and I’m a political columnist with the Edmonton Journal, but today I’m speaking to you perhaps more as the author of a research paper on carbon capture and sequestration that I wrote for the University of Toronto. I was given a journalism fellowship from the Canadian Journalism Foundation for the 2008-09 school year, which led to an invitation from the Program on Water Issues at the Munk Centre for International Studies to write a paper. It's called “Burying Carbon Dioxide in Underground Saline Aquifers: Political Folly or Climate Change Fix?”

The paper was presented at the U of T last September at a daylong symposium on carbon capture. I did not focus on Alberta’s oil sands projects because it would appear the oil sands are not a good candidate for carbon capture and sequestration. Here is an excerpt on CCS and the oil sands from my paper, so I'm quoting myself:

A cautionary tale can be found in Alberta’s oil sands that initially looked to CCS as a way to mitigate the industry’s huge carbon footprint. With CCS, Premier Ed Stelmach was proud and optimistic that he had found a way to green the tar sands and improve his province’s battered environmental image. “Alberta believes CCS can help ensure the economy and the environment both thrive in the 21st century. That is the backbone of Alberta's position–a pragmatic approach that will allow us to continue to make a significant contribution to the Canadian economy while at the same time protecting the environment.”

However, oil sands companies have backed away from CCS, realizing the technology will likely not help the industry reduce CO₂ pollution because the oil sands have too many diffuse emission sources. The Canadian Broadcasting Corporation obtained internal federal briefing notes that explained that CCS is better suited to large, single-point industrial sources of CO₂ such as coal-fired plants. To quote, “Only a small percentage of emitted CO₂ is ‘capturable’ since most emissions aren’t pure enough,” the notes say. “Only limited near-term opportunities exist in the oil sands and they largely relate to upgrader facilities.”

Despite this, the Alberta government insists CCS will somehow help the oil sands in a significant way. The government’s assurance that 140 million tonnes of CO₂ will be sequestered each year requires explanation. Even a firm supporter of CCS has his doubts. “I don’t know where they got that 140 number from,” says David Keith from the University of Calgary. “If we have climate change we cannot keep taking oil out of the ground and putting it into the air.”

Thus far, CCS has failed to deliver on its promise to the oil sands, despite the optimism and enthusiasm of politicians and industry leaders. And the Alberta government is learning that CCS projects are more difficult to get off the ground than first thought. Here's an addition. Since my paper was written, the Alberta government has announced letters of intent for four CCS-related projects: The Pioneer project, headed by TransAlta to sequester one million tonnes a year from a coal-fired plant; the Swan Hill Synfuels project to sequester 1.3 million tonnes a year; an Alberta Carbon Trunk Line; and the Quest project, headed by Shell to sequester 1.2 million tonnes a year from the Scotford upgrader. There is no guarantee all these projects will go ahead, and if they do, the target date to start sequestration is 2015.

Looking at the Quest project, the plan is to capture up to 1.2 million tonnes of carbon dioxide a year from the upgrader near Edmonton, compress the carbon dioxide into a fluid, transport it by pipeline to a yet-to-be determined site, and inject it more than two kilometres underground into a saline aquifer, a sponge-shaped rock formation filled with salt water.

On paper, the pilot project is an ideal carbon capture and sequestration model. It will be well funded, moderately scaled, carefully selected, closely monitored, and it will inject the carbon dioxide deep underground into a geological formation unmolested by a drill bit. If you're going to isolate carbon dioxide from the atmosphere, this, in theory, is how you're supposed to do it.

However, Shell and its project partners reserve the right to use the captured carbon dioxide for enhanced oil recovery. That means injecting the fluid gas into old oil fields to force out more oil that is then refined and burned, producing more emissions of carbon dioxide. Using CCS to recover more oil arguably makes sense economically, but calling enhanced oil recovery pure “carbon sequestration” in the context of massively reducing global emissions is, environmentally speaking, an exaggeration.

Then there's the issue of trying to store millions of tonnes of highly pressurized carbon dioxide in old oil fields that are punctured by old oil wells. It's called the pincushion effect and it could create leaks of carbon dioxide into groundwater or into the atmosphere. The former could leach elements such as arsenic into the groundwater sources of drinking water. The latter could be a health threat in large enough quantities, but even small amounts over time could undo any climate change good done by sequestration in the first place.

Scientists studying carbon sequestration have high hopes for its safety and effectiveness but cannot, at this point, give us any long-range assurance, especially if we go large scale.

Alberta says it will use carbon sequestration to bury 140 million tonnes of carbon dioxide a year by 2050. The federal government wants to bury 600 million tonnes annually by the same year. Worldwide, the plan is to inject billions of tonnes underground each year.

Politicians are making promises for the technology that scientists and the energy companies don't know they can keep.

That's my presentation. Thank you very much.

[The Chair, Conservative, James Bezan]

Thank you very much, Mr. Thomson.

We're going to go to questions now.

[Technical difficulty--Editor]

I'm going to suspend the meeting while we get this rectified.

[The Chair, Conservative, James Bezan]

We're back in session. The video conferencing is working.

If we lose the video conference link again, we will do this by teleconference, so that we can complete our questioning.

With that, we are going to go with our seven-minute round.

To kick us off, Mr. McGuinty, you have the floor.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you very much, Mr. Chair.

I'd like to begin by asking Dr. Schindler if I have his testimony right.

Dr. Schindler, I am going to summarize very quickly.

You said, first of all, that your data agrees with Environment Canada data with respect to the NPRI, the last numbers being 2008, I believe you said. Then you said the oil sands companies should be charged under the Fisheries Act. Then you said Environment Canada should take on a proper monitoring program, because RAMP is not trustworthy, given that it is industry funded. You said that advertising by industry is misleading. You said there is recent evidence of federal scientists being muzzled. You also said that you need an oversight panel of scientists not linked to industry or government, and then you said hard goals for reclamation of mines and tailing ponds are required.

Is that pretty much, in a nutshell, what has to happen in terms of improving the situation in this balance between the exploitation of the oil sands and the natural environment around it?

[Dr. David Schindler]

With respect to water pollution, yes. That's one of several aspects, though.

[David McGuinty, Liberal, Ottawa South, ON]

Dr. Schindler, has the evidence that you have put forward in this report, updated from May 12, 2009, been accepted by Environment Canada or by government scientists across the department?