Energy Ink

Late to the party

Why a new oil sands water monitoring program should have come sooner

March 28, 2011

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Let’s take a break from the election buzz to discuss a few recent oily developments.

You may have heard Environment Canada announced its new water-monitoring plan for the Lower Athabasca region last week. The plan comes after an independent review agreed that oil sands development might actually be having an effect on the Athabasca River Basin, which cuts through Alberta’s bitumen belt north of Fort McMurray.

The federal government says the plan “is a first step towards a comprehensive, integrated monitoring program for the oil sands region.” The government also promises the plan will answer key questions such as what is the current state of the water quality in the Athabasca River Basin and what contaminants are entering the Athabasca River directly or indirectly from oil sands operations.

It’s an initiative that is long overdue. While discredited monitoring plans, like the Regional Aquatics Monitoring Program, were being carried out, opponents were contending industrial pollutants from oil sands development were causing increased cancer rates in communities like Fort Chipewyan and mutations in local fish – turning them into real-life versions of The Simpson’s infamous Blinky.

This bad press has been a significant factor in the oil sands being branded as “dirty”, a label the feds and the Alberta government are now desperately trying to erase. Maybe it wouldn’t have been necessary had an adequate water-monitoring plan been in place: one that either disproved the environmental concerns or highlighted their legitimacy, which would have led to earlier efforts to address them.

LNG Longshot?

Is there enough room in Kitimat, British Columbia for two liquefied natural gas (LNG) export terminals? The BC LNG Cooperative LLC hopes so. It has applied to the National Energy Board (NEB) to build a 125 million cubic feet per day LNG terminal at the B.C. port.

The timing of the application couldn’t be better for the proponents, which include the Haisla First Nation and Houston-based LNG Partners LLC. Japan’s post-earthquake nuclear crisis has countries, particularly in Asia, shelving or delaying plans to build nuke-fired power plants. Natural gas is looking pretty good as a (relatively) clean alternative to power the Pacific Rim, where countries already pay top dollar for LNG.

You never want to say never in the energy business. But this project’s ownership structure, (there are no major oil and gas companies backing it thus far) could make it a tough sell in the Asian market. Key LNG markets like Japan and South Korea want security of supply when they sign long-term contracts with LNG producers. They may be wary of signing on with the BC LNG Cooperative LLC when the proponents don’t have a company with large natural gas reserves in the fold.

Blowout Brouhaha

Over at Steve Levine’s Oil and the Glory blog, the author writes about how unreliable blowout preventers are in preventing disasters like the BP Macondo fiasco.

What will the findings of the Det Norske Veritas report prepared for the U.S. Interior Department mean for the NEB’s upcoming review on offshore drilling in Canada’s Arctic? If blowout preventers have failed in environments like the Gulf of Mexico, how likely are they to work in the case of a blowout in the harsh operating conditions of Canada’s Arctic?

That is a question companies interested in exploring in the Arctic offshore will have to answer. For now, it looks like the industry might not have an adequate answer for the NEB.

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