11 Feb 2014

Blame regulators for oil sands tailings ponds?

Update (20 Mar 2016): Canada's pipeline regulator seems to work for industry.
I've long known of the lagoons holding tailwater from oil (tar) sands processing next to Alberta's Athabasca River, and I've often wondered why those lagoons are not recovered and drained, so as to lower the risk of accidental spills (like this or this).

I also think that these lagoons -- a visible reminder of the pollution from oil production and killer of innocent birds -- really turn people against the oil sands (its production pollutes but probably less than production in the Niger Delta) and projects that touch on them, such as the Keystone XL (which is a good idea).

So I wanted to find out why those ponds are still there, instead of being drained.

Over the past few months, I been emailing with a guy from the Oil Sands Research and Information Network (OSRIN) in Alberta.

From him, I learned was that lagoons are part of the oil sands production process, which means they will be there until their project shuts down (50-100 years?).[1]

Then I learned from Florian Bollen that Memsys Clearwater can clean the dirtiest water for about $2/barrel (42 gal/160 liters).[2] Given that it takes 3.1 barrels of water to mine a barrel of oil from the sands (and 0.4 bbl water for in situ recovery) [pdf], this figure implies that producers could clean ALL the water it pollutes at a cost of about $6/bbl of oil. That's expensive when oil costs $35/bbl but not when it's at $100/bbl. Since the cost of tar sands production is $40/bbl, $6 is not a deal-breaker. 

So, what's keeping oil producers from cleaning up the toxic water that's killing birds, damaging their reputation, polluting the Athabasca watershed, and -- as I explained last week -- putting out large quantities of unmeasured (and unregulated?) air and climate pollutants?

According to Ben Sparrow of Saltworks Technologies, provincial regulation prevents firms from releasing reclaimed/recycled water into the environment. That's why the ponds cannot be drained now (if ever).[3]
"By the way," he added. "Our technology can clean that tailing water for $2/m^3, but that's not going to happen because there are 12 billion cubic meters of water in those ponds."

"Why not just get started?" I asked

"Because $24 billion is a lot of money!"
Really? I don't expect that an industry making $49 billion per year would be able to pay those cleanup costs right away, but I bet they could get the job done in, say, 10 years. That's only $2.4 billion a year to transform the industry into the "ethical" image it promotes.

Bottom Line: Alberta's regulators have only to change the rules, to allow firms to clean and discharge (certified) pristine reclaimed water back into the environment. Such a change will help the industry clean up the water it wants to clean up as part of its ethical practices.[4]

  1. They could not estimate a cost of cleaning because (quoting from an email):
    • "We don't know the criteria for cleanup so you can't come to a definitive cost
    • There are many treatment options, each with its own cost
    • The cost to treat new tailings may be different than legacy tailings, if only because you have to rehandle the legacy ones
    • Each pond at each site has its own chemistry and therefore treatment requirements so there would not be a single number"
    More interesting, they do not have a cost because they have never drained and remediated a pond! The only instance, which got a lot of publicity, was when "Suncor reclaimed Pond 1 (previously Tar Island Dyke and now called Wapisiw Lookout), but that operation did not include treating and releasing tailings water (that was directed to other ponds)."
  2. Florian is a board member of Memsys; their products clean tailing water via multiple stage desalting (the real money in filters is for cleaning industrial water, not making drinking water from salt water). I serve with Florian on the Board of the Aquiva Foundation, a charity that installs Memsys gear to help communities get drinking water.
  3. Oil companies must post bonds against the cost of reclaiming/retiring their sites. I don't know if they have to post bonds against pollution damages during operations. Somehow, I think that loophole may not be an accident.
  4. Or perhaps the regulator works for the industry, which prefers to leave the tailings ponds in place ($24 billion is a lot of money!) because tailings ponds -- like death and taxes -- are forever.


RP said...

Your cost estimates may or may not be in the right ballpark. But doesn't your economic theory suggest an improved overall societal outcome if external costs are internalized, no matter how large they are. If it's $2 there may be little impact on production and a superior environmental outcome. If it's $10, you may get a more sensible pace of development along with the superior environmental outcome. If it's $30 you might even get a shift in investment to more sustainable energy sources.

I am assuming one of the reasons we don't do it is that it would create winners and losers, and favouring the current winners offers governments the path of least resistance. But, government theoretically serves all, or at least ought to, and every Canadian has a stake in the energy/environment game.

DS said...

I am not sure the author is aware of the enormous volume to be treated, nearly a billion cubic meters in ponds, and a production rate of about 3 m3/second for each mining operation. There are several processes that can do the job at benchtop scales, but scaling up to such an enormous capacity is a huge problem. I am also told by U of A engineers that they could now be producing dry tailings, no need for ponds. The process was outlawed in 2009, and they have postponed enforcement at least twice, not even to reconsider until 2015 at this point. Weak wills seem to be the problem.

David Zetland said...

@DS -- I'm aware that a billion m3 is a lot, but I'm also aware that it's possible to tackle the problem over time, which is what I proposed.

It seems, as you imply, that there's no will -- and certainly no spending -- to bring in solutions at scale.

That's not just a pity for the environment, it's a pity for those who want Canada to export oil without importing a bad reputation.

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