Alberta's tar sands are soaking up too much water

JEFFREY SIMPSON
Globe and Mail
Wednesday, 5 July 2006

CALGARY — Every student learns that oil and water do not mix. True enough, but producing oil, especially from tar sands, requires water -- and lots of it.

A cubic metre of oil, mined from the tar sands, needs two to 4.5 cubic metres of water. Approved oil sands mining operations -- not the in situ kind that extract oil from tar sands far below the surface -- will take twice the annual water needs of the City of Calgary. The water will come from the Athabasca River, from which 359-million cubic metres will be diverted.

More than 7 per cent of Alberta's total water allocations -- surface water and groundwater -- is consumed by the oil and gas industry. If oil and water don't mix physically, they are certainly linked economically. Put another way, some of Alberta's oil-driven wealth, especially in the tar sands, depends upon its water supply. Is the province using it wisely?

The Pembina Institute thinks not. In an exhaustive study released a few months ago, the institute worried about the multiple effects of tar sands exploitation on water -- both the amount being used to produce the petroleum, and the environmental impact on the water ecosystem of the tailings left behind after the tar sands have been mined.

The institute's concerns were seconded by the renowned ecologist, David Schindler of the University of Alberta, who wrote: "Water is used lavishly in the extraction and refining of both conventional oil and synthetic crude. There are compelling reasons why this must cease."

Alberta, relative to the rest of Canada, is dry. The southern part lies in the shadow of the Rockies, where glaciers and snow packs are receding. The province's population is rising; its water supply is not. Pressure from the oil and gas industry doesn't help.

Even ministers in Premier Ralph Klein's government acknowledged Alberta's water challenge. The government created an advisory committee on water use that led to a new act governing conservation and water allocation -- but for oil field injection, that is, for enhanced recovery of conventional oil. The tar sands were left to one side.

As in so many other policy areas, Alberta's tar sands operate under laws and financial regimes specifically made to encourage their exploitation. They are Alberta's equivalent of the golden goose, and not many people want to do or say anything that questions the economic boom they have created.

Still, the Pembina Institute's 154-page study is so detailed, it cannot easily be dismissed. Of particular concern is the amount of water needed, and the grimy residual water left, after tar sands mining operations are finished with it.

Mining needs to drain muskeg and divert streams and rivers. It must depressurize underlying aquifers, use massive amounts of water to separate the bitumen (from which oil comes) from the sand, send the residue to tailing ponds, where the water is contaminated with acids, mercury and other toxins. These remaining tails, as they are called, must be contained in ponds.

In situ exploitation uses less water than mining operations, and there are new technologies that might reduce in situ operations' needs further. These are the kinds of technologies the Alberta government needs to promote through incentives or regulations, one being Toe-to-Heel Air Injection (THAI), where water is only used for startup heating.

The Pembina Institute argues that use is related to cost. Companies don't pay for the water once they receive their allocation, so there is no incentive to save it. Instead, the government should use a full-cost accounting system to price water, a recommendation already made by the Canada West Foundation.

Again, the tar sands regimes were established to encourage maximum investment as quickly as possible. So the royalty regimes, the tax regimes, the water regimes, and other aspects supposedly governing tar sands developments are, shall we say, generous -- entirely in keeping with the laissez-faire approach of the Klein government.

Only a fraction of the tar sands have been, or are, under exploitation so the pressure for more water will likely increase, even as development shifts from mining to in situ operations.

There's a change of government coming in Alberta, as Mr. Klein takes his leave. A new premier and cabinet will be in place by year's end. Will his successor dare challenge the golden goose, no matter what it's laying?

jsimpson@globeandmail.com