Oil sands vision, red herrings and a sea of platitudes

JEFFREY SIMPSON
Globe and Mail
Wednesday, September 20, 2006

FORT McMURRAY, ALTA. -- All three levels of government are running to catch up with the explosion of Alberta's oil sands.

The municipality of Wood Buffalo can't cope with the burgeoning population that requires more roads and housing. The federal government, now operated by the Harper Conservatives, is asleep at the switch on greenhouse-gas emissions, a global problem to which the oil sands make a contribution. And the Klein government, soon to be run by someone else, is behind on almost every aspect of managing the oil sands, except approving more projects.

Alberta needs better approaches for environmental regulation, reclamation requirements for land devastated by oil sands mining, water use, municipal infrastructure, social services and royalties.

The Klein government indirectly recognized that the oil sands explosion had caught it by surprise by establishing an advisory group on the oil sands, including a panel touring northern Alberta to hear what residents and companies think should be done. The group's report will be given to the government in June of 2007.

This week, the panel heard evidence in Fort McMurray. Not many citizens attended, but representatives of the major companies did, as well as a few environmental activists and local organizations.

The cleavage between the oil sands companies and many of the other intervenors was obvious. The oil sands companies essentially said: Let's carry on. Environmentalists replied: Whoa. And the municipality, burdened with the costs of growth, largely sided with the environmentalists, saying: Enough for the time being unless the province heaps more money on us.

The panel is supposed to develop a "vision" for the oil sands future. Like all vision exercises, the report risks bathing in a sea of platitudes, because every intervenor applauded "sustainable development," aboriginal participation in the oil sands work force, and a predictable investment climate.

What business fears are shifting requirements and tougher regulations. Every business representative lauded technological advances that sprang from research and experience. These experiences had improved the environmental performance (and bottom lines) of companies.

There were the usual red herrings, including that capital was mobile and might shift somewhere else if excessively burdened in Alberta. So much money has been committed in northern Alberta that it's not going anywhere, especially when current and projected oil prices, combined with improvements in technology, have made the oil sands quite profitable.

What might slow projects (some have already been delayed) are soaring costs for labour and materials, a reflection of an overheated economic sector. These costs have nothing to do with regulation and everything to do with shortages caused by hell-bent development.

But the oil sands companies, judging by their presentations to the panel, fear further regulations, especially environmental ones. Only one, Suncor, spoke positively about getting more serious about greenhouse-gas emissions through a carbon cap and trade system.

They all agreed that a pause in oil sands development would be bad for them, the province and the country. "Make hay while the sun shines," advised the Petro-Canada spokesman. As for environmental concerns, each insisted that his company was making progress, using less energy to produce a barrel of oil, introducing new scrubbers for smokestacks, taking more care with tailing ponds.

This being Alberta, these arguments might ultimately sway the panel -- and if not the panel, then a provincial government that is politically thick with the oil patch.

Cynics might say the panel's very creation was a calculated political move to channel public concerns about the costs of oil sands development onto a consultation process that will produce a report quickly forgotten. But there are legitimate concerns that Alberta has let oil sands development rip, rubber-stamping just about every project, and selling leases with merry abandon, without figuring out how to manage the boom. It's true that the province needs a better strategy for coping with the pressures of the oil sands developments, but it also needs a vision of how to use the money these developments are producing. The lack of such a vision was among the reasons the Conservative Party is getting rid of Ralph Klein.

Alberta could become, under different leadership, a worldwide leader in sustainable development, using the oil sands as a catalyst. Little of what the panel heard this week suggests that kind of creative thinking is framing public debates.

jsimpson@globeandmail.com