It is Time Alberta Ramped Up Tailing Pond Reclamation Requirements

Back in the day Syncrude was one of the top rated corporate citizens in the country and for sure in Alberta. In the days when Eric Newell and Jim Carter were at the helm, Syncrude’s community involvement, imaginative philanthropy and social responsibility performance was exemplary.

Their fostering and nurturing of aboriginal people in hiring and contracting was ground breaking. They have recently received the first reclamation certificate for any oil sands operator. Their environmental leadership was also well known and respected.

Then things seemed to change when Exxon took over the corporate leadership. The focus became more about maximizing profits and pushing growth over an integrated sustainable an responsible approach to development.

Now it seems to many observers that this project is being run mostly out of Houston more than from Fort McMurray. Syncrude is a complex corporate entity with an interesting mix of other corporate owners. I am sure they are all starting to think about what exactly the impact of the recent death of ducks in their toxic tailing ponds means for them as owners and their social license to operate now too.

There were some players in the oil industry who overplayed their hands using intimidation tactics on Ed Stelmach during the public debate on the royalty review. I can’t think of a single threat those players made then that had any real substance or could be tied to the royalty rate increases…which do not even start until January 1, 2009.

The Government of Alberta is the proxy for the citizens of Alberta to ensure our natural resources are developed in a sustainable and responsible manner. The days of the energy industry self-regulation, self-monitoring and voluntary reporting of their environmental performance obligations should be over. Our government needs to step up to the plate and take over inspections and reassert its responsibility to the citizens of Alberta.

The need to ensure high environmental standards and enforced for air, land and water protection is squarely on the Stelmach government’s shoulders. They also need to take steps to ensure biodiversity and wildlife habitat protection has to be added to the GOA’s active engagement in ecological integrity.

Syncrude was required at one time to set aside $100m for reassurance around their reclamation obligations. That was reduced to a line of credit only. Then the annual $1m fee for keeping the $100m line of credit was eliminated along with the line of credit - with a promise that Syncrude’s reclamation efforts would start sooner. Syncrude has done some reclamation and it takes time but one site in 40 years is nothing to brag about in the bigger scheme of things.

Clearly the Alberta government has to demand that tailing pond reclamation for all producers start immediately and that it be done right – not just rapidly. Suncor, for example, has committed to reclaim its first tailing pond by 2010. That is a 136 hectare site that Suncor says will include rebuilding wetlands to encourage the return of wildlife. We need to see more examples like that coming from industry. Perhaps more huge profits being realized from $100 oil need to be invested in reclamation now and not wait for other generations to carry the can.

Government spending $25m on a PR campaign to “protect Alberta’s integrity” will do nothing of the sort and will actually do more harm than good if that is the key message. You can’t buy integrity and respect with advertising and brochures…you have to earn it. Substance over style and performance over posturing will have to be the new standards of behaviour that must become embed in our provincial culture.

Albertans will expect nothing less from their government and the energy corporations who we license to develop our natural resources. The energy industry is only a tenant. They are not the owner of the resource. Albertans own these resources and we have the obligation to insist our government and our tenants act responsibly and not just expediently in how they are developed.

The ecological tipping point has arrived and the citizens of Alberta are coming out of their cynicism and are mad as hell. I think they will become much more informed, aware, engaged and insistent about environmental performance concerns in all aspects of our provincial progress as an energy supplier.

Anyone who want to get re-elected or requires a natural resource lease and a social license to operate those resources had better take this new Alberta attitude to heart. The public is watching and they are not impressed.

Suncor Invests in Alberta While Some Other "Alpha Oil" Types Choose to Intimidate.

There is plenty of business and news coverage of the Suncor decision to spend $20.6B…that is right Billion with a “B” in oil sands operations and expansions. Full disclosure, I hold shares in the company and have done work for Suncor in the past but not presently.

This company continues to show quality leadership and management and a demonstrable commitment to improved corporate social responsibility. They are not perfect but they get it and they work hard on getting it right taking to heart an integrated triple bottom line approach. In addition to this increased investment announcement, I see Suncor has also renegotiated its royalty contract with Alberta. Some business writers and industry commentators said the Alberta government was “tearing up contracts” with Suncor and Syncrude as part of the royalty changes. Not so and never was. This negotiated agreemetn revision proves that such hype was misleading and perhaps even intentionally by some.

Last October and November in response to the “Our Fair Share” Hunter royalty review expert panel recommendations “Big Alpha Oil” used intimidation tactics on workers, suppliers, communities and the Premier. The were saying that recommended royalty increase that merely put Canada and Alberta as the second lowest takers on the planet would devastate the industry and they would be leaving the province.

Well for a few weeks some actually did cut capital and exploration budgets but not nearly as drastically as they threatened and those decisions were made in light of market realities and taken long before the “Our Fair Share” report came out anyway. They moved some activity to Saskatchewan, which a good thing. They seemed to think it was their oil and gas and not Albertan’s oil and gas. That is a big mistake.

Now we see the most aggressive of the ENGO's shifting focus away from forestry and on to big oil, Alberta's oil sands in particular. We knew this was coming as early as the spring of 2005 when we did some work for the Alberta forest industry. The ENGO's we worked with then said that was their new strategy...and it is now happening.

With these announcements, Suncor steps up and shows leadership and wisdom - once again. This is not the first time Rick George has shown competence and class as a major corporate CEO. When the energy and manufacturing industries got twisted out of shape over the potential dire impacts on the economy due to the Kyoto Protocol, Suncor stayed out of the silliness. After a few months however, Suncor’s CEO said that they had calculated the cost impact of Kyoto in its Canadians operations and it was pennies on the barrel. Suncor said it could absorb that level of additional cost. Within days the din of dire consequences from the other aggitators and fearmongers, who were playing politics more than economics, were silenced and they slide quietly into the background and off the radar screen.

There are lots of examples of why big business has trust, respect and credibility issues with the public. But when we see a good example of a corporation and leadership that shows it is worthy of trust and respect, we have to applaud it. Suncor is consistently such an entity and an exemplar for others to emulate. Good on them!