OIL AND GAS:

Reclaimed dump sparks oil sands sustainability debate

WOOD BUFFALO, Alberta -- Along the verdant knolls and shallow streams of Wapisiw Lookout, foxes scamper and raptors nest amid newly planted trees.

If not for the refinery flares in the distance and the checkpoint that screens visitors to Wapisiw, one might forget that the grassy 550-acre landscape spent the past four decades as a waste pond for Canada's largest energy company.

For Wapisiw's owner, Suncor Energy Inc., its new life as a prospective wildlife habitat is a step forward in shaping the long-term legacy of oil sands production. The 170 billion-plus extractable barrels of heavy oil, known as bitumen, that lie beneath Canada's soil represent both an opportunity and a challenge: Can the nation put its resources through the pricey, pollution-intensive paces of development while limiting the resulting environmental repercussions?

U.S. and Canadian oil companies view projects such as Wapisiw as evidence that they are making unsung progress in producing oil sands crude more responsibly. "It's really the first concrete proof that we mean what we say when we say sustainability is important," a Suncor official says in a promotional video that touts its lengthy investment in reclaiming the site for natural uses.

Suncor takes palpable pride in its reclamation, as well as its development of a new system to speed the solidification of tailings, the toxic clay-based waste that once lay where a bear cub now scampers on Wapisiw. But its proximity to a mine where air pollutants can exceed U.S. EPA air quality standards is a reminder of how much cleanup work remains before the industry can truly shrink its footprint.

And much of that work is now taking place in a politically charged hothouse. The clamor over the Keystone XL pipeline proposal, which would dramatically expand U.S. imports of oil sands crude, is raising American awareness of the fuel while driving a national battle this summer over how to brand it -- as a valuable antidote to Middle Eastern imports or an incurably dirty ecological threat.

In that context, Wapisiw can look like a greening or a greenwashing operation.

To environmentalists such as Josh Mogerman of the Natural Resources Defense Council (NRDC), the industry's efforts are "superficial" bids to scrub up an inherently filthy enterprise.

"What they're not saying is, they reclaimed it by pumping the liquid tailings into other tailings ponds, dumping soil on it, dumping grass seed on it, and tugging a bison there," Mogerman said of Wapisiw. "It's all superficial. It's not about doing what's right, it's about doing what looks best."

As Mogerman noted, Suncor removed the tailings that sat on its former "Pond 1" before rechristening it Wapisiw, a Cree word meaning swan. The reclamation must go through further monitoring before certification by the Alberta government. Stopping by on a humid day at the company's Millennium mine -- where 1.4 million tons of oil sand materials are moved each day through excavation, heating and processing -- Wapisiw appears at once natural and artificial, both blending into and clashing against the surrounding boreal forest.

Perhaps the company's biggest breakthrough, then, is its $1.2 billion investment in a method that treats tailings with chemical flocculant to speed their drying into more easily reclaimable matter. That plan to comply with a strict 2009 tailings rule from Alberta regulators won praise from one prominent Canadian green group, the Pembina Institute, and Suncor hopes it will ultimately allow the company to reclaim all tailings waste ponds save for one that is continually reused.

Were it not for that new technology, even the vast flatland where workers now pull oil sands from the earth ultimately would need to become a waste pond, Suncor's vice president of mining operations, Anne Marie Toutant, explained on a recent industry-sponsored tour of Millennium. Now, Toutant said, "I'm dumping dirt right back in the pits so I can fill the hole" created to get at the underground bitumen.

On a high ridge above the active mine, Toutant points to rich layers of exposed bitument shimmering in the heat. Multimillion-dollar trucks whir and dirt swirls in the air as her Suncor colleagues rattle off data on the daunting scale of their oil sands activity: About 1,600 truckloads of oil sand go through the plant daily. Each of those contains about 200 barrels of usable fuel, after processing.

More than two barrels of water is used to make each of those barrels of oil sands crude barrels, on average.

Mixing oil, water

Tailings are but a single slice of the massive impact -- literally earth-shaking, in the case of seismic tests performed before deep in situ drilling -- that oil sands extraction has on the Canadian landscape. But the industry cites its immense commitment to recycling more resources to contend that, essentially, the bigger the boom in oil sands, the greener the process can become.

"To be a good oil company, you've got to be a great water company," ConocoPhillips oil sands operations Vice President Perry Berkenpas said on a recent tour of his Surmont in situ site, also in the Wood Buffalo region.

Indeed, operations at Surmont and Millennium appear to have little in common other than their ultimate product of oil sands crude. The pungent hydrocarbon scent that radiates from a surface mine's separator cell is nowhere at Berkenpas' facility, where well pairs inject steam as hot as the surface of the planet Mercury hundreds of feet below the ground to dislodge viscous bitumen.

That technique, known as steam-assisted gravity drainage or SAGD, produces two times as much water as it does oil. Companies such as Conoco and Suncor tout water recycling rates upward of 90 percent at in situ facilities, but environmentalists counter that industry use of saline groundwater remains insufficiently monitored.

A scientific panel at the Royal Society of Canada raised similar alarms in December, making global headlines with a report that decried multiple lapses in oil sands regulation. Among its concerns were the absence of a regional plan to limit Albertan groundwater impacts and the lack of research on how oil sands extraction would affect the relationship between ground and surface water.

Canadian petroleum companies' top trade group responded by broadcasting its support for monitoring of oil sands impacts "based on sound science."

When it comes to industry's appetite for more efficient in situ extraction, however, Berkenpas' colleagues have an indisputable rationale for cutting energy consumption. The less fuel and water used to shake bitumen from the deep -- measured in statistics such as steam-oil ratio, which Conoco has cut by 20 percent since 2008 -- the more profit is possible per barrel.

Ultimately, the push for greener in situ extraction is poised to gain even more momentum as the technique outpaces surface mining in growth. That trend is necessitated by hard facts, as an estimated 80 percent of Alberta's oil sands are buried too deeply to be mined by truck or shovel.

'Called to a higher bar'?

At the Millennium mine, water remains a supporting player. After Toutant's 24-foot-high trucks take oil sands through a crusher, the material is mixed with water and heated in enormous, fragrant separator cells until most water falls to the bottom alongside clay, sand and residual bitumen, becoming tailings.

What remains at the top is a bitumen froth that is skimmed off and blended with a chemical diluent before the start of upgrading, a chemical-intensive prelude to the refining process. Upgrading generated more carbon last year than in situ or surface mining, according to a report released last month by Canada's environment agency.

That report noted that total emissions from the oil sands sector are set to rise by 87 percent between 2010 and 2020. But the industry and Canadian government hope to put that data in context, countering that oil sands generate less than 7 percent of the nation's total greenhouse gases and look even punier when compared to the pollution produced by coal-powered U.S. utilities.

The most important audience for that argument is the Obama administration. Ottawa and oil companies have linked arms to pitch the Keystone XL line as a vote of confidence in Canada's plans to keep greening its bitumen production.

Approving the pipeline, which is poised to nearly double U.S. imports of oil sands crude, would give the United States "a socially and environmentally responsible partner" in its northern neighbor, Canadian Natural Resources Minister Joe Oliver told reporters last month. Canada's foreign minister also touted XL as "tremendously important to the future prosperity of the Canadian economy" on a recent visit to Secretary of State Hillary Rodham Clinton.

"Our government has taken strong steps to ensure that the environment is protected while continuing to develop this important resource," Natural Resources Canada said in response to emailed questions from Greenwire.

Asked about Ottawa's defense of its conservationist credentials, Pembina Institute oil sands analyst Nathan Lemphers -- whose group hailed Suncor's Wapisiw Lookout as "a welcome milestone" -- said his country has a long way to go in order to legitimately tout its stewardship of oil sands production.

"We're professed to be environmentally progressive," Lemphers said. Referring to Keystone XL boosters who often point to Canadian crude as more sustainably managed than Middle Eastern alternatives, he added: "As a result, we're called to a higher bar than dictatorial regimes. ... There are ways in which the U.S. can encourage Canada to increase its management of the oil stands."

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