Natural Resources Committee on Nov. 9th, 2006

[The Chair, Conservative, Lee Richardson]

We are starting a bit late today, and let's say that, for reasons of weather, we're going to try to wrap up a little earlier today as well. We're aiming for five o'clock, so I'd like to get started.

Our witnesses today are Jim Vollmershausen, director general of the Mackenzie River Basin Board; Mary Griffiths, from the Pembina Institute; and Margaret McCuaig-Johnston, assistant deputy minister for the energy technology and programs sector within the Department of Natural Resources; along with Dr. Kim Kasperski.

I understand that you've been speaking with the clerk, that you have a speaking order, and that three of you will be speaking. Is that right?

[A voice]

Yes.

[The Chair, Conservative, Lee Richardson]

With that, we'll just begin and ask you to give us some background for perhaps ten minutes each, and then we'll go into questions.

Jim, are you going to begin?

[Jim Vollmershausen, Chair, Board Member, Mackenzie River Basin Board]

Good afternoon, and thanks for having us today.

My name is Jim Vollmershausen. My day job is with Environment Canada, with which I'm a director general in Edmonton. But today I'm here speaking as the chairman of the Mackenzie River Basin Board, and certainly the focus of what I have to say will be on the work of that board.

Initially, I'd like to first share with you a bit of information regarding the size and complexity of the Mackenzie River Basin. It has cultural, political, geographic, and environmental characteristics that are unique and significant by world standards.

It's a big basin. It's huge. At a staggering 1.8 million square kilometres, it's about one-sixth the size of our country.

It has only a small population of about 360,000 people. Even though it does include Fort McMurray, it still has only 360,000 people. But everybody who lives in the basin depends in some way on the rivers and the lakes and the waterways and the three world-class deltas that are in the basin. The population is very diverse in lifestyle and heritage. Aboriginal people living in the basin speak eleven different languages, which is a good example of that diversity.

Another characteristic of this basin that's a bit different from other big river basins in the world is development. The reason we're here today, of course, is that the development is in the extreme upstream portions of the basin, whereas in most big rivers, the development and the big populations are at the very downstream end, at the river mouths and so on. So it makes for a different dynamic, for sure, in the Mackenzie.

The Mackenzie River Basin Board was created in 1997, with the signing of a transboundary waters master agreement between the Government of Canada and the Governments of Saskatchewan, Alberta, British Columbia, Yukon, and the Northwest Territories. These are the governments with jurisdiction to manage water and the environment in the basin, and their members on the board, both government and aboriginal or both, are who I'm representing today.

The agreement establishes common principles for the cooperative management of the aquatic ecosystem of the basin. There are five principles, and they are as follows:

1. Managing the Water Resources in a manner consistent with the maintenance of the Ecological Integrity of the Aquatic Ecosystem;

2. Managing the use of the Water Resources in a sustainable manner for present and future generations;

3. The right of each to use or manage the use of the Water Resources within its jurisdiction provided such use does not unreasonably harm the Ecological Integrity of the Aquatic Ecosystem in any other jurisdiction;

4. Providing for early and effective consultation, notification and sharing of information on developments and activities that might affect the Ecological Integrity of the Aquatic Ecosystem in another jurisdiction; and

5. Resolving issues in a cooperative and harmonious manner.

The agreement established the Mackenzie River Basin Board to guide adherence to those principles. It has developed a strategic plan and has published its first report, “Mackenzie River Basin Board's State of the Aquatic Ecosystem Report 2003”. I can arrange to have copies of that document made available to you if you would like.

Of particular interest to this committee will be the “State of the Aquatic Ecosystem Report” that contains a chapter dedicated to the Athabasca sub-basin, in which the northern Alberta oil sands are located. The report notes that the growth and expansion of the oil sands industry has and will certainly continue to have an impact on the regional environment. Large-scale water use for processing or deep well injection land disturbance from the large mining operations; potential water contamination from tailings ponds; and air pollution in the form of acidifying emissions, particulate matter, sulphur, and greenhouse gases, are concerns that have been raised.

These concerns are echoed in the provincial-regional sustainable development strategy, or RSDS, for the oil sands area and the Cumulative Environmental Management Association, or CEMA, has identified surface water quality as a potential environmental concern. CEMA is a consensus-driven organization that is multi-stakeholder, with industry, environmental group, aboriginal, Métis, first nations, municipal, federal, and provincial representation. It's a very broad group, and it has been charged with trying to manage the cumulative environmental affects in the oil sands area. It has identified surface water quality as a potential environmental concern. The RSDS, the provincial strategy, contains a blueprint for action to address the issue, and CEMA is developing environmental objectives and management recommendations for surface water quality.

I'd like to stress that the board is not a regulatory or licensing board. We don't hold hearings or grant permits or anything like that. It has no legal or policy basis to regulate resource use in any of the jurisdictions. However, the board can influence regulatory decisions made in the various jurisdictions in a number of ways. We can provide factual material, such as the “State of the Aquatic Ecosystem Report”, to inform development decisions. We can participate in and influence pre- or post-regulatory processes, such as planning regional or cumulative environmental impact assessment processes or ministerial reviews of sensitive decisions. We can appear as a “friend of the tribunal” in federal, provincial, or territorial public hearings to advocate for the principles endorsed in the master agreement.

Of some importance, the master agreement also mandates the development of bilateral agreements between neighbouring jurisdictions that are intended in fact to provide the cornerstone for sound aquatic ecosystem management within the basin. So far, we have one between the NWT and the Yukon Territories--they've completed an agreement--but the board encourages, certainly, other member jurisdictions to follow suit.

Using that “State of the Aquatic Ecosystem Report” is a starting point. It's a valuable aid to helping them define what will be sent across provincial and territorial boundaries. In the context of the oil sands area of the basin, the two bilateral agreements between B.C. and Alberta and between Alberta and the NWT are clear priorities, and work is certainly under way now to conclude them.

It is important to note that the board regularly discusses a number of pressures within the basin and has heard presentations on such issues as potential climate change impacts, the Mackenzie gas pipeline and its associated exploration and production activities, the impacts on flows of the operation of the Bennett Dam, as well as the potential oil sands impacts. These are all referenced in the “State of the Aquatic Ecosystem Report” and will almost certainly be the subject of future reports. In addition, they are important starting points for the negotiation of our bilateral agreements.

Finally, of course, the board has opportunities to hear from jurisdictions about progress regarding these issues, and others for that matter, at its regular meetings.

That's basically what I wanted to share with you today about the Mackenzie River Basin Board, and I thank you for the opportunity.

[The Chair, Conservative, Lee Richardson]

Thank you.

Before we continue, I think the committee would be very interested in the “State of the Aquatic Ecosystem Report” prior to our visit to the oil sands. We are beginning a recess tomorrow, so in terms of logistics, is that report available in both languages?

[Jim Vollmershausen]

I believe it is.

[The Chair, Conservative, Lee Richardson]

Either way, would it be available in electronic form?

[Jim Vollmershausen]

Yes, it is. I can get it to the clerk post-haste tomorrow.

[The Chair, Conservative, Lee Richardson]

If we can, it would be much easier to get it in electronic form. I can have it distributed to the committee prior to them departing for Fort McMurray.

[Jim Vollmershausen]

Sure. Absolutely.

[The Chair, Conservative, Lee Richardson]

Thanks very much, Jim.

[Jim Vollmershausen]

No problem.

[The Chair, Conservative, Lee Richardson]

We'll proceed with Mary Griffiths from the Pembina Institute.

[Mary Griffiths, Senior Policy Analyst, Pembina Institute]

Thank you very much, Mr. Chairman. I'm very pleased, members of the committee, to have an opportunity to be here today on behalf of the Pembina Institute.

I'm a senior policy analyst with the institute, and last week you had the opportunity to hear my colleague Dan Woynillowicz talking about some of the issues. He would have told you that the Pembina Institute is a non-profit, non-governmental organization, so I won't need to tell you more about the Pembina Institute.

What I would like to say is that we had hoped that Amy Taylor, who is director of ecological fiscal reform, could also have been here today as she was invited, but she had a prior commitment, and both our invitations came rather late.

The three of us together, Dan, Amy, and I, worked on a report Troubled Waters, Troubling Trends, which the Pembina Institute published this year. I believe you have already received the summary of the report, and it has been translated for you. I will refer to this as I'm talking.

I would first like to mention something about the oil sands mining, which is the most conspicuous aspect of the oil sands activities and which has a major impact on rivers and wetlands. The wetlands must be drained before the overlying deposits are removed to expose the bitumen. In addition, the basal aquifer, which is the water layer underlying the bitumen, also has to be drained so the mines don't flood. That can cause considerable drawdown of waters and also of wetlands.

Bitumen itself forms only about 10% to 12% of the total amount of material that is mined, and extracting it requires huge volumes of water. Even with water recycling, it still takes between two and four and a half barrels of water to produce a barrel of synthetic crude oil. The majority--two-thirds in fact--of all the withdrawals from the Athabasca River are for oil sands mining, as you can see on the graph on page 3 of your brochure. So the Athabasca River is incredibly important in supplying water for the oil sands.

Existing projects have already been allocated as much water as the city of Calgary, and you can see that in the left-hand bar in the graph on page 4. Calgary, of course, is a city with a population of about a million, so already the existing three or four projects are using as much water as is used within the city of Calgary. If we take the existing and approved projects, as shown by the second bar in the graph on page 4, we see that they've been allocated roughly twice as much as has been allocated already. To expand--for all the planned projects as well as the existing ones--would mean using as much water as the city of Toronto does. That's for just the oil sands mining operations. That gives you an idea of the volume of water that is used or is required.

Less than 10% of this water returns to the Athabasca River. I think that's rather different from what happens to water used for municipal purposes. There are major concerns. Is there sufficient water in the river to meet the instream flow needs to keep the river ecosystem healthy, especially as the flows are very low in winter and also highly variable from year to year?

The Cumulative Environmental Management Association, CEMA, which you've already heard about, has unfortunately failed to determine what the instream flow needs levels are, and it was left to Alberta Environment to establish an interim framework for the instream flow needs and water management on the lower part of the Athabasca River. This happened because the Energy and Utilities Board recommended in a decision that it was so important to have these instream flow needs that if CEMA couldn't come up with a figure after five years, by January of 2006, the duty would fall to Alberta Environment.

The interim framework that Alberta Environment proposed set a series of flow-rate thresholds, potential environmental impacts, and required management action, but this framework has not yet been implemented. It has undergone several drafts, and Fisheries and Oceans Canada is now partnered with Alberta Environment to work on it. Still, the most recent draft, of July 10, is unsatisfactory as far as the aboriginal and environmental communities are concerned because it would still allow withdrawals from the river, even during a red alert when there would be significant risk of impacts to the river.

So as a result, there is currently no management framework in place, and in the meantime, new projects are going ahead, or there are hearings for them, as is the case for Imperial's coal mine. They want new water licences, and it looks as though new decisions will be made about allocating water, yet we still don't have a sound water management framework in place.

Upon leaving the oil sands area, the Athabasca River flows along the eastern edge of Wood Buffalo National Park and into the Peace-Athabasca Delta. This delta is the largest boreal delta in the world, and one of the most important waterfowl staging and nesting areas in North America.

Oil sands mining operations have been listed as one of the threats to the integrity of the Peace-Athabasca Delta because of the volumes of water withdrawn from the Athabasca. The delta has already been hugely impacted by the Bennett Dam in B.C., which has affected changes in the flow of the Peace River. More research is needed to determine how the oil sands activities actually impact on the ecosystem and also on the aboriginal fishing in the delta.

As I've said, only a small portion of the water used from the Athabasca River goes back. Most of it ends up in tailings ponds. The National Energy Board has said that tailings management is daunting, because once the bitumen is separated, a lot of that water is contaminated with the sand and the residual bitumen. These residuals are, with the water, called tailings, and they're sent to tailings ponds. But it's a misnomer to call them tailings ponds. The diked area holding the tailings already covers 50 square kilometres, so these are hardly ponds.

As well, the water in these ponds is actually contaminated with various pollutants from the bitumen, with such things as naphthenic acids, which make the water toxic to fish and birds. Birds have to be prevented from alighting on these tailings ponds. We just have to hope that the water from the tailings ponds doesn't leach into groundwater or the soil.

So far, although there have been experiments with new processes to develop better forms of tailings with less water in them--so-called consolidated tailings, in which the sand and the fine tailings stay together--there still has not been completely satisfactory reclamation processes that avoid large volumes of these fine tailings that have to go to tailings ponds. For example, so far, with the experiments with consolidated tailings, only about 10 hectares have actually been reclaimed to a grass vegetation, not at all like the native boreal forest and peat wetlands.

As far as the mines are concerned, some of the larger areas have been reclaimed, but no reclamation certificate has been issued for any of the areas so far.

Companies are working on new technologies to try to reduce the volume of water used in bitumen mining. There are new processes to develop consolidated tailings, and the bitumen process is a dry tailings process. However, experts say that there probably won't be major breakthroughs or alternatives to water-based bitumen extraction before the year 2030.

The bitumen operations for mining get the most attention, but in fact, as you'll see from the map on the front page of the Troubled Waters brochure, the bitumen deposits underlie about one-fifth of Alberta. This means that 93% of the bitumen is actually too deep to mine and has to be extracted in situ by drilling wells through the overlaying deposits and into the bitumen.

At the present time, about one-third of Alberta's bitumen is actually recovered through in situ operations. As I say, it doesn't get the public eye, but it is very significant. Again, it uses a lot of water to generate the steam that is injected into the bitumen to warm and soften it so that the bitumen can be pumped to the surface.

Although the in situ operations use less water than the mining operations on a per barrel basis, only about one-fifth of that is surface water. Two-fifths come from deep saline groundwater, and nearly two-fifths come from surface or shallow groundwater--fresh groundwater, in other words--which in Alberta is defined as water with less than 4,000 milligrams a litre of total dissolved solids.

I am particularly concerned about the impact of the in situ operations on the shallow groundwater. Geologists are still learning about groundwater resources in northern Alberta. Alberta Environment itself certainly doesn't have enough monitoring wells in the area. There is insufficient baseline data to be able to analyze what the long-term impacts are of a drawdown of aquifers.

Certainly while a project is operating and drawing on a shallow aquifer, it may be lowering the level of the water for 30 or 40 years. It could take decades after operations cease before the water level re-establishes. Since a lot of the wetlands will have been reduced, one wonders if the level actually will re-establish. With climate change, the rate of recharge may be less in the future than it has been in the past.

When saline water is used to generate the steam, it's not the end of the problems, because one still has to treat the water, both for recycling and also for the waste products from recycling. Also, when it's saline water, the waste products then have to be disposed of, often in landfills, which then have to be monitored, and the leachate has to be pumped out because of the brine in the residual material that goes to their landfill.

Although in situ operations use less water than mining, there are still a lot of different concerns, especially as the area impact will be much greater. Efforts are again under way to reduce the use of water, but it has been increasing very rapidly so far, as you can see from the top graph on page 4 of the brochure. Pilot projects to reduce the use of water include using a mixture of solvents and steam. There's also a new project called toe-to-heel air injection, which burns some bitumen in situ to warm the oil and then uses the heat from the residual burning of the bitumen to warm up further bitumen, which then melts, but it's too early to say if these techniques will be successful.

In the meantime, new projects that will probably last 30 or 40 years are being approved. These projects are again being allocated water. Last week my colleague Dan told you about the very rapid growth in the oil sands. Our concern is what can be done to reduce the use of water per barrel, because given the expected growth from about a billion barrels a day to perhaps five or six billion by 2030, it's incredibly important to reduce the amount of water required per barrel of synthetic crude oil.

We have made various recommendations for reducing the use of water or for encouraging industries to reduce the use of water. Some of them are on page 2 of the brochure. I'd like to mention one, which was the implementation of user fees for the fresh water for oil recovery that does not flow back into the watershed. We would suggest that this would not be a tax, but would be money going into a dedicated water management fund that could be used to improve knowledge on our groundwater, to improve the knowledge of our rivers and the management of the water resource, and to finance research for other methods to reduce oil recovery.

We believe that good management requires good information on both surface water and groundwater quality and quantity. Alberta certainly needs a comprehensive groundwater monitoring system and database in order to develop watershed budgets. The long-term water balance in each basin and sub-basin, including the sustainable yield from aquifers, should form the basis of future watershed planning and water allocations.

In our Troubled Waters, Troubling Trends report we said effective water management requires a comprehensive policy framework that's based on solid data and scientific information and provides adequate protection for ecosystems. We hope the federal government will play an effective role in reducing the impacts of the oil sands operation on the environment in the areas where it has jurisdiction.

[The Chair, Conservative, Lee Richardson]

Thank you, Ms. Griffiths.

Ms. McCuaig-Johnston, are you going to give the point of view of your department?

Thank you.

[Margaret McCuaig-Johnston, Assistant Deputy Minister, Energy Technology and Programs Sector, Department of Natural Resources]

Thank you very much, Mr. Chair.

I'm very pleased to be here today to brief the committee on the challenges and opportunities of technology development related to water in the oil sands. I believe you have a copy of the deck that's been made available to you by the clerk. I'll speak to that this afternoon with my colleague, Dr. Kim Kasperski, who is here from our NRCan lab at Devon, Alberta, where she is the team leader of the water management group. In addition to being expert on these issues, she was recently asked by the industry to chair their committee on research and development on water in the oil sands, so she is a real expert.

We'll be focusing on R and D matters today. Any questions on policy on the oil sands we would have to refer to the relevant ministers; also, any questions on the Clean Air Act and how it might affect the oil sands would be best dealt with I think by the policy leads at Environment Canada. Within those constraints we're happy to provide as much information as we can.

There are three laboratories undertaking energy research in NRCan. They are the CANMET Energy Technology Centres in Ottawa, Varennes, and Devon, which is near Edmonton. In fact, next year energy research at NRCan will be celebrating 100 years of service to Canadians.

In the Advance Separation Technologies Laboratory, or AST, of CETC-Devon, there are about 16 scientists and engineers with a support staff of 23 technologists.

This lab focusses both on fundamental research and developing technologies to reduce the environmental impact of oil sands development. This includes tailings treatment, water management, bitumen extraction and froth treatment: everything from after the ore is mined to when the bitumen is sent to the upgrader.

The other group at Devon is the National Centre for Upgrading Technology which focusses, as the name suggests, on upgrading the bitumen to synthetic crude oil and the production of fuels. It has a scientific staff of 53.

Slide 3 of the deck shows that our lab in Devon has focused in particular on issues surrounding surface mine oil sands. The lab plays several roles in this regard. First, the scientists help industry to understand how tailings management and water chemistry affect oil sands development and reclamation. Second, we provide expertise to develop new technologies to reduce the effect of oil sands development on water resources. Third, we evaluate new oil sands developments during the environmental assessment process. In all these roles, the scientists are helping to improve the environmental management of an important energy resource, and in that we share the same objective that Mary Griffiths just spoke about, to reduce the use of water per barrel of oil produced.

I'm moving now to slide 4. I understand that you'll soon be visiting the oil sands, so these photos may show some of the sites that you're going to see. As you can tell, the tailings ponds, reflected in the photos on slide 4, are the liquid left over from the oil sand separation process and are a very significant feature of the landscape. Water management and tailings pond management are therefore a very important feature of environmental, scientific, and industrial research and development. The left-hand picture is the original Syncrude mine site. The original tailings pond, Mildred Lake, is in the top centre of the photo. An additional pond is the southwest sand storage, seen to the bottom left of the photo. The right-hand picture is a small section of the Suncor site, showing pond 1 on the right-hand side of the river. This was originally meant to hold all the tailings, but the tailings properties forced them to build more and bigger ponds, as Mary mentioned.

The problem is that while the sand in the waste stream settles rapidly when it's dumped into the pond, the clay stays suspended, and over about three years it forms a thin sludge called mature fine tails, which is why they're called tailings ponds. This is about the consistency of ketchup, and it doesn't settle any further. The water in these ponds is much saltier than river water, and it is toxic, due to the presence of naphthenic acids, although this toxicity does disappear with time, as natural bacteria break down the naphthenic acid molecules, usually over one or two years.

In addition to the tailings ponds of these surface mining companies, there is now Shell/Albian, which is in operation; CNRL, which is being built; Synenco; Deer Creek; Imperial Oil; and PetroCanada. All are in the planning stages, and there are expansions at the existing sites.

On slide 5 you can see that tailings ponds are proliferating and are covering oil sands deposits. This satellite picture shows the Syncrude Aurora and Shell/Albian sites to the north and the Syncrude and the Suncor sites to the south. The tailings ponds can be seen clearly, and you can understand from this photo that water is a significant issue in the oil sands, directly related to the number, location, and quality of tailings ponds. Our CETC-Devon scientists are now working with Suncor to develop methods so that by 2010, pond 1, which you saw in the photo, can be capped and reclaimed. That will be a very significant achievement for the oil sands.

On slide 6 the diagram shows how water is recycled in a surface mining oil sands operation. The recycle rate—and this, I know, has been a matter of some question at the committee—varies between 50% and 80%. This particular diagram shows that it's 74%. This also illustrates a very important point in that everything is inextricably linked. Changing one part of the process--for example, adding a new chemical to the tailings stream--will affect every other part of the process, including bitumen extraction efficiency. In situ operations are a different story. They also recycle water, but they can get back about 90% of the water they pump as steam into the formation, and even more, if there happens to be water in the formations as well as the bitumen. If they treat the recovered water, as some operations do, to create dry waste salts and cleaner water to make steam, they can recycle 90%. However, some of the operations only treat the water to a point that produces sludge or a brine stream, which is disposed of. So the recycle rate varies between 60% and 70% in those cases because of the water lost in the waste streams.

On slide 7, the two main issues regarding water and oil sands are the amount of the water used and the quality of the water used. With increasing development, there is an increasing demand on the Athabasca River to supply the water needs of the surface mining operations. How much water is needed by an operation is determined by how much is used in the extraction process by the operation and how much can be recovered from the tailings.

The quality of the water is important, because the wrong chemistry can reduce bitumen extraction efficiency, resulting in bitumen being sent as waste to the ponds. The water quality also affects how the minerals settle in the tailings ponds and, ultimately, affects reclamation, because the salinity of the water left in the settled solids affects, for example, the growth of plants.

On slide 8,

there has been a significant program on tailings research at Devon for about 15 years. Water has always been a part of this because of the inextricable link between tailings properties and water chemistry and use.

Our research has focussed mainly on the following aspects: increasing water recovery, understanding tailings properties and behaviour and using computer modeling to predict process water chemistry.

In the last few years, we have expanded the research in the water area to include new developments for better re-use and discharge of water, as well as understanding what happens to chemicals in oil sands process water.

Per slide 9, we have always worked through methods of collaboration. For example, the Fine Tails Fundamental Consortium was a five-year joint effort by industry, universities, and federal and provincial labs to develop a way to deal with the massive problem of accumulating oil sands fine tailings. These are small particle, clay suspension tailings. The total effort from all sectors was about $3.8 million per year. Out of this project came the consolidated tailings treatment method. This is really important research, providing the model for the current oil sands research network, called the Canadian Oil Sands Network for Research and Development, or CONRAD, involving industry, government, and universities.

Regarding slide 10, the Oil Sands Tailings Research Facility, a $2.5 million facility, was built at CETC-Devon in 2004 under the auspices of the University of Alberta to undertake pilot projects on tailings treatment methods. We work closely with the University of Alberta: some of our scientists are adjunct professors there, and post-graduate students work at our lab. We also work closely with scientists and engineers from the companies, because pre-competitive research such as this can be used by every company to the benefit of all of them.

Slide 11 shows an important tailings treatment that CETC-Devon had a leadership role in developing, called consolidated tailings. It mixes fresh sand and oil sludge, and it adds waste gypsum from the flue gas scrubbers on site, to create a mixture in which the sand and clay settle together quickly to a solid surface. The picture in the upper middle is of consolidated tailings made with gypsum, and it shows two CETC-Devon scientists standing on top of their work; so you can see it really is solid. The one on the right is of consolidated tailings made with carbon dioxide. The gypsum consolidated tailings process is being used at Suncor, and its pond is shown on the bottom right. In fact, due to the pioneering work at CETC-Devon, all new operators now include some form of thickening to reduce pond sizes. This solidifying process reduces the amount of water tied up in the tailings and therefore increases the free water available. About 15% of the total tailings produced has been consolidated tailings, showing there's still a long way to go and there's a lot more we can do in this area. But still, it has reduced the projected fine tailings inventory by about 10%, or 55 to 75 million cubic metres. That's a lot.

At CETC-Devon, research in this area has been an ongoing effort, which has included in-house and joint industry cost-recovery projects, ranging from fundamental studies of tailings properties and what affects them, to pilot demonstrations of tailings treatments. The latest development is the use of carbon dioxide to make consolidated tailings. In fact, this has led Canadian Natural Resources Limited, or CNRL, as it's also known, to adopt this treatment method for their new Horizon oil sands mine.

Slide 12 shows that CETC-Devon has an extensive research program into fundamental science affecting all aspects of oil sands operations. For example, it's important to understand the properties of clay when considering new tailings treatments. Our scientists were also commissioned to write a comprehensive review of extraction and water chemistry, which is now widely used in the industry. Our scientists—Kim and her team—have also constructed a database of water treatment methods, focusing on emerging technologies relevant to the oil sands industry. They will use this database to focus an in-house research program on promising treatment methods.

Slide 13,

shows that it is important to understand what happens to chemicals in oil sands process water. A new program aims to model what determines where molecules such as organic solvents or toxic naphthenic acids end up: in the water, the solids or the air.

We want to be able to answer such questions as: “If the operator changes the pH of their process, what will that do to the toxicity of the water?“

From the answers, we can address environmental solutions.

In conclusion, there is slide 14. As you are well aware from your study of water in the oil sands, the issues are complex, due to the interrelationship of all aspects of oil sands operations. Changing one part of the process can have consequences at any other point, from production through reclamation.

Our NRCan lab at Devon is working together with the scientists and engineers in the companies and universities to understand the problems and find solutions to the challenges. Working together in pre-competitive research such as this allows knowledge to be used by all the companies in the oil sands, as well as by the regulators, for the protection of the environment.

Thank you very much.

We'd be happy to respond to any questions you may have.

[The Chair, Conservative, Lee Richardson]

Thank you. That is fascinating.

He's chomping at the bit over here, so I'm going to let Mr. Cullen begin. He's been asking these question, without much luck, for some time now. I hope today he's going to get the answers he's looking for.

Mr. Cullen.

[Roy Cullen, Liberal, Etobicoke North, ON]

I'm not going to hold my breath, but thank you.

Thank you to all the witnesses for coming here today.

We're talking today just about water and some of the environmental challenges. The thing that I find totally amazing on the question of the oil sands, let alone natural gas, and CO₂, is that everyone recognizes there's a problem, but I don't see much in the way of action.

I appreciate that the Pembina Institute is a think tank. The Mackenzie River Basin Board was very clear that it's not a regulator, etc. But the one thing I find surprising is that no one seems to want to touch it. It gets into this area of not wanting a national energy policy type of backlash or not wanting to be seen as anti-Alberta.

But the bitumen will be there forever. The pressures on the costs now are horrendous. There is probably going to be $50 oil for a long time as well. Why can't the federal government sit down with the province and the stakeholders and work out a plan where we can have some measured pace to this, maybe save money in terms of the costs, deal with the social problems, and then work towards the environmental solutions?

We heard again today that the breakthrough technologies on water will be 2030. Well, the last time I checked, the production out of the oil sands is going to quadruple by 2015. We have no water management framework. Why would we, collectively, as a society--forget the jurisdiction for a moment--allow these projects to proceed and expand and quadruple when we don't know the impacts on the water? Who is asleep at the switch? Is this a matter that the province should be regulating or the federal government. What's going on here?

Maybe we could start with you, Ms. Griffiths.

[Mary Griffiths]

I would love to respond to that.

I would like to say hear, hear! It's great to hear somebody asking these questions.

With respect to Alberta, you had a presentation last week from the Canadian Association of Petroleum Producers. They're very influential in deciding what happens within Alberta. I think there is a very important role for the federal government, within its mandate--without it being a national energy policy or anything like that--to actually do a lot more, not only on research, as we've heard about today with what's happening in the labs, but also on groundwater. What is happening to our groundwater? We just don't know nearly enough about that. The Alberta environment ministry has a poor record there. They would agree that not enough money has been spent on monitoring groundwater.

I think the federal government can have a better role within CEMA, the Cumulative Environmental Management Association. More money is needed to work through CEMA, but it needs someone to drive that. Although I'm not personally involved in CEMA, from what my colleagues have said, I feel there could be much more initiative taken there. I don't know about the internal politics of CEMA, but there is an opportunity here.

There's also an opportunity with environmental impact assessments, through the Canadian Environmental Assessment Agency. At the moment, a lot of it is discretionary. Sometimes the Department of Fisheries and Oceans will not take such a powerful opportunity as they might, because of the discretion. I think there's been a reluctance by the federal government to get too involved.

But I think it's time for a change, and I would certainly like to encourage that.

[Roy Cullen, Liberal, Etobicoke North, ON]

Just on that point, I know there are jurisdictional issues and a sense of passing the buck on this project. It's unbelievable. But how as a society do we allow the use of this water at this rate and this pace?

You said that 10% of the water is returned to the river; the numbers bounce around a little bit. We heard at the very minimum that there's a timing issue. Even if you're able to recover from the tailings ponds, it could be futuristic. And even then, you're not going to recover it all. In the meantime, we're expanding the projects in the oil sands. How can we as a society allow this to happen without a water management framework or an environmental approval? Who would actually do that, and why haven't they done it...to insist on that?

[Mary Griffiths]

The Energy and Utilities Board recognized, when they were doing some of the hearings back in 2004, the essential nature of this water management framework. They realized that CEMA was being rather slow in doing it and said that if CEMA didn't come up with this management framework by the end of 2005, then the task had to be taken over by Alberta Environment and the federal government. Alberta Environment came up with an interim proposal in January of 2006, and subsequently the DFO got involved.

Again, there seems to be a lot of industry “influence”, shall we say, and wanting to have as little change of the status quo as possible so that there would still be allowance for water to be diverted, even under a red alert system in the proposed draft management framework. This is why not only the Pembina Institute but also some of the aboriginal communities don't find this proposed framework acceptable.

So that's why it's reached a stalemate. It's just not acceptable. In fact, the Mikisew Cree have actually withdrawn from CEMA because they're so disappointed that it's not protecting the aboriginal interests with respect to traditional fishing and also commercial fishing.

[Roy Cullen, Liberal, Etobicoke North, ON]

Is that it, Mr. Chair?

[The Chair, Conservative, Lee Richardson]

Yes.

We've just heard from one of the witnesses in terms of a response, but let's try to keep to seven minutes in the opening round and five throughout.

Again, I do want to say that certainly Ms. Griffiths can answer to anything she wants, but when it comes to departmental officials, if you're asking for policy advice and policy direction, Mr. Cullen, that's our job. I mean, that is why we're having this study, so that we can recommend policy to the government. The purpose of the witnesses in this hearing is to get information for us to base those questions on the policy.

I think you got a very good answer to your question. I just don't want to put particularly departmental officials on the spot to have to respond in terms of policy answers. They're here to provide technical information. I think they've done a very good job of that. And there's lots more room for questions, too, because there was considerable difference amongst the witnesses, even, in some of the data they provided.

So if we want to nail down technical areas, and differences of opinion on technical questions, I suggest that those kinds of questions would be helpful to the committee. It's our job as committee members to make policy recommendations; it's not particularly the job of government officials.

[Roy Cullen, Liberal, Etobicoke North, ON]

Certainly I hope we'll be doing that, Mr. Chair. I'm just trying to understand the context behind why—

[The Chair, Conservative, Lee Richardson]

No, it's been very helpful in this case, I don't doubt that.