The Alberta government and an unlikely crew of allies — including Greenpeace, an oil lobbying firm, Ecojustice and attorneys general of four different provinces — are squaring off with ATB Financial in a Supreme Court case that could let polluters off the hook when they go bankrupt.

The question being tried is whether creditors, like banks, can pick and choose the best assets an oil company owns when it goes bust, or whether governments can use a company’s good assets to pay to clean up its messes before the banks get paid.

At the granular level, the specific case at issue began when Redwater Energy went under in 2015. Its bank, ATB Financial, turned its nose up at nearly 80 per cent of its assets instead of taking the lot.

“Of the 97 or so properties owned by Redwater energy, [ATB] purported to accept only 20 wells — the profitable wells — and leave behind the unprofitable wells and a pipeline,” says Ecojustice lawyer Kurt Stillwell.

“The Alberta Energy Regulator ordered the trustee to properly abandon the wells. It refused.”

That attempt to ditch the bad assets kicked off a series of court cases and appeals, the most recent of which was argued before the Supreme Court in mid-February. The verdict isn’t expected for several months.

In an odd twist of fate, the case has the Canadian Association of Petroleum Producers fighting on the same side as Ecojustice and Greenpeace.

“It’s unusual…we didn’t have necessarily the same arguments,” said Keith Stewart, climate and energy campaigner at Greenpeace. “They’re trying to make sure solvent companies shouldn’t have to pay for these costs; we’re trying to make sure the environment doesn’t bear the cost.”

Ramifications for Other Sectors

The Alberta Energy Regulator’s CEO Jim Ellis put out a statement emphasizing the potential scope of the case.

“We can’t emphasize this enough: this is not an Alberta problem,” Ellis wrote. “This is not an oil and gas problem. It can be applied to industrial sites left behind by companies in other industries, allowing receivers to take and sell for the benefit of creditors the good assets and walk away from the bad ones and the end-of-life obligations associated with them.”

Greenpeace echoes the energy regulator; Stewart says the result could affect the way a whole swath of resource extraction companies are regulated.

“This case is really important because it’s not just oil and gas,” Stewart says. “The precedent it’s setting could apply to mines or forestry companies — boom and bust industries.”

The case could also determine how other sectors — like forestry or mining — manage their own environmental cleanup https://t.co/hjwmehsQHn

— DeSmog Canada (@DeSmogCanada) February 23, 2018

Spike in Orphan Wells

Ellis blames the original ruling (in favour of the bank) for causing a jump in the number of oil wells that have been “disclaimed” or not remediated (“abandoned,” in industry-speak, is actually a good thing, meaning the well has been capped and is ready for remediation).

For the oil industry, this means an extra financial burden for the companies that haven’t gone bankrupt — and in a financial downturn, that is usually smaller players, not the Exxons and BPs of the world — via the Orphan Well Association, an industry-funded organization that manages wells that haven’t been properly abandoned and reclaimed. The number of wells on the Orphan Well Association’s books has shot up more than threefold since the Redwater ruling, from 1,200 to 3,700.

Since funding is collected from well owners depending on their estimated liabilities, a crash in oil prices, like in 2014, and a series of bankruptcies like that of Redwater Energy, can mean provincial taxpayers are left holding the bag for cleanups.

Tony Bruder has experienced that firsthand on his own land. Two inactive sour gas wells on his property were left idle for decades before the Alberta Energy Regulator ordered its owners to clean up the mess, and when the company failed to comply, the regulator did the job itself.

“There’s no doubt in my mind that the companies have to be held responsible,” says Bruder. “And in order for that to happen properly, the Alberta government, which gave those companies the right to drill…they have to be willing to stand behind the decisions they’ve made, and hold those companies accountable.”

But the Redwater case could mean the provincial government loses its authority to hold companies responsible. The deciding factor will be whether the government’s jurisdiction over environmental regulation means it can overrule federal bankruptcy laws.

The case is being anxiously watched by all sides. In an emailed statement, ATB Financial said the ruling will provide certainty to a law that has been on the books for over 25 years.

“Whatever the decision of the Supreme Court, the clarity and certainty it will provide is important to all parties in the oil and gas sector and financial institutions who lend to those companies,” it said.

“We, and all the other creditors to the industry, are interested observers in the outcome.”

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The future of Alberta’s sprawling tailings ponds is in serious crisis.

As of right now, there is no clear understanding if or how oilsands companies are going to clean up the 1.2 trillion litres of toxic petrochemical waste covering over 220 square kilometres in the province’s northeast.

On Monday, Environmental Defence and the U.S.’s Natural Resources Defense Council published a report that pegged potential costs for cleanup and reclamation at a staggering $51.3 billion: $44.5 billion for cleanup, with an additional $6.8 billion for rehabilitation and monitoring.

That amount exceeds the $41.3 billion in royalties collected by the province of Alberta between 1970 and 2016.

“Increasingly, as an Albertan, I am concerned that these will become public liabilities,” Martin Olszynski, law professor at the University of Calgary and expert in environmental law, tells DeSmog Canada.

“In my view, at this point, it’s more likely than not that they will become public liabilities.”

The two organizations behind the new research called on the Alberta government to reject any new tailings ponds applications and require existing tailings be cleaned up faster than they’re produced.

Hot waste fills a Suncor tailings pond facility. Photo: Alex MacLean

No Tailings Management Plans Approved So Far

With no rules restricting the creation of tailings, oilsands waste ponds grew unabated for over 50 years.

The first rules, introduced in 2009, mandated companies create targets “to minimize and eventually eliminate long-term storage of fluid tailings in the reclamation landscape” but were a complete failure. Every single oilsands company failed to meet their own targets under the new guidelines.

And while the Alberta Energy Regulator (AER) introduced Directive 085 in mid-2016 in an attempt to deal with such issues, the effort has so far failed to produce tangible results.

Case in point: Suncor.

Oilsands giant Suncor’s tailings management plan, submitted under the new directive, was rejected by the AER in March.

According to the regulator the plan failed on three accounts: 1) the technology of choice to treat the tailings was allegedly unproven; 2) Suncor “did not provide adequate information” on the proposed alternative; and 3) the actual timeline for reclamation was unproven.

In a surprise move, the AER recently decided to re-review Suncor’s plan, although it is unclear if Suncor has addressed those major issues.

“In the original denial from the AER, [Pembina] agreed with essentially all of those concerns and didn’t feel like Suncor addressed them,” Nina Lothian, senior analyst at Pembina Institute, tells DeSmog Canada.

In its application for reconsideration, Suncor claimed the company didn’t provide proprietary information on new technology. That proprietary information has not been made available to the public.

A spokesperson for the AER tells DeSmog Canada that companies may request confidentiality concerning their application information.

“Confidentiality is rarely requested and only granted in compelling circumstances.”

Smoke, steam, and gas flares rise from the Suncor upgrading facility. Reclamation efforts seen to the right, on what was once a tailing pond. Suncor has reclaimed only 7 per cent of their total land disturbance. Photo: Alex MacLean

Industry Organization Hasn’t Provided Any Info On Tailings Experiment

The undisclosed nature of Suncor’s plans follows a long history of secrecy surrounding industry’s plans for tailings cleanup.

For years, the industry-funded Canada’s Oil Sands Innovation Alliance (COSIA) has pledged to work on a massive tailings cleanup facility called the Demonstration Pit Lakes Project.

COSIA has previous said the facility would potentially begin operation in 2017. The outcome of the Pit Lakes Project was meant to help inform the viability of tailings management for decades to come.

But as previously reported by DeSmog Canada, it’s unclear if COSIA has even started on the project.

When contacted for comment, COSIA referred DeSmog to a Syncrude spokesperson who couldn’t account for COSIA’s progress on the file.

Olszynski says Albertans deserve to know if COSIA is working on tailings management.

“The whole point of COSIA was to drive collaboration between oilsands producers recognizing there should be an economy of scale if they work together on some of these major environmental issues because they’re all dealing with the same issues,” he says.

“To then find out there’s some kind of proprietary issue that prevented Suncor from being fully transparent in its application is perplexing.”

When asked if the AER would integrate COSIA’s progress into the re-review of the Suncor plan, a spokesperson for the regulator wrote: “If information about COSIA’s Demonstration Pit Lake project is submitted as part of the application, then we will include it as part of our review.”

At this point, there is no public information about COSIA’s Demonstration Pit Lake project.

Earthen wall to a tailings pond at a Suncor mining site. Photo: Alex MacLean

Tailings Technology Can Take Over Decade To Prove

A key concern for critics of the AER’s decision about the Suncor plan is that of timelines.

Lothian of the Pembina Institute says that many of the tailings management plans that are being presented by proponents have fairly extensive timelines to get the landscape to the point of “ready to reclaim.” That would require a reasonably aggressive treatment in order to reduce the liability on the landscape.

“The plans that have been presented in aggregate are showing that tailings are continuing to accumulate,” she says. “We’re not seeing that sort of treatment and reclamation that we were hoping for.”

According to the AER, Directive 085 “specifies that the risks, benefits, and trade-offs associated with the proposed tailings treatment technology must be understood, have contingencies identified, and risks mitigated.”

But Olszynski says that process to understand if a tailings technology works can take between 10 and 15 years of monitoring. He adds that either COSIA should update its website to indicate that it won’t be able to reach its 2017 target or be forthright with the regulator and Albertans.

The AER didn’t make it clear how it intends to evaluate Suncor’s plan without that information.

Another Seven Tailings Management Plans Being Reviewed By Regulator

At the end of this month, the AER will host an “enhanced review process” of Suncor’s proposed tailings management plan using existing dispute resolution processes, according to an AER spokesperson.

This will be the very first time such a process has ever occurred.

Lothian says the review will be “an opportunity to have a much more constructive, open dialogue with both the proponent and those that have submitted statements of concern.”

It will involve organizations which have filed statements of concern, including the Athabasca Chipewyan First Nation, Fort McKay Métis Community Association, McMurray Métis Local 1935, the Oilsands Environmental Coalition (Pembina and Fort McMurray Environmental Association) and Joslyn Energy Development.

The AER is also reviewing seven other tailings management plans, including from Syncrude, Shell, Imperial Oil and CNRL.

But the outcome of the AER’s reconsideration of the Suncor plan could very well set the tone for the remainder of the process, especially given that it represents the largest oilsands player and the first to receive a verdict.

“We were hopeful under the tailings management framework that we would see much more progressive treatment of tailings, and see that liability reduced on the landscape in the near term,” Lothian concludes.

“The plans that have been presented in aggregate are showing that tailings are continuing to accumulate. We’re not seeing that sort of treatment and reclamation that we were hoping for.”

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By Barry Robinson, Ecojustice.

The Alberta Energy Regulator (AER) is Alberta’s one-stop regulatory body for the oil and gas industry. When it was created in 2013 by the merging of the former Energy Resources Conservation Board and parts of Alberta Environment and Parks, the AER made bold claims about transparency, enforcement and becoming a “world-class” regulator.

Unfortunately, the AER has failed to live up to its promises. The AER has shown over and over again that it is either unable or unwilling to enforce its own laws, directives and orders. The AER has become a toothless regulator.

As a public interest lawyer I see first-hand how the AER’s failures affect Albertans.

Take for example two of Ecojustice’s clients. Tony and Lorraine Bruder operate a cattle ranch near Pincher Creek. A preliminary environmental site assessment conducted at an abandoned sour gas well site on their property showed that the site was potentially contaminated with drilling waste, salts, metals, and hydrocarbons, including polycyclic aromatic hydrocarbons — all nasty things that you do not want on your property.

In September 2015, as a first step towards cleaning up this mess, the AER ordered Nomad Exploration Ltd., the licensee of the well site, to complete a more detailed environmental study by the end of November 2015.

Nomad ignored that order. Over the next few months, we repeatedly asked the AER what it was going to do about Nomad’s failure, but the AER took no action.

Finally, in May 2016, the AER ordered Nomad to prepare a plan by the end of June 2016 to complete the more detailed environmental study — that is, to prepare a plan to do the very thing the AER had already ordered Nomad to do six months earlier.

Most competent regulators escalate enforcement when an operator does not follow its orders — when you do not follow the rules, the consequences get more severe. In this case, the AER de-escalated enforcement. The penalty for not completing the detailed environmental study was just an order to “try again.”

This time, the AER said that Nomad must include in the plan a schedule to complete the detailed environmental study by the end of August 2016. After an extension of time and a couple of failed attempts, Nomad never did provide the AER with a schedule to complete the study. The AER then ordered Nomad to complete the study regardless by January 3, 2017, but then at Nomad’s request extended that date to February 15, 2017.

And guess what — Nomad again failed to meet that deadline.

Three Ways to Improve Alberta’s Toothless Energy Regulator #abpoli #abandonedwells @ecojustice_ca https://t.co/Zi2xiTuCrq

— DeSmog Canada (@DeSmogCanada) April 7, 2017

When we recently asked the AER what they were going to do about this continued non-compliance by Nomad, the AER’s response was “the AER is continuing to gather and assess the relevant facts and information in order to determine the most appropriate response moving forward.”

In other words, 18 months after ordering Nomad to complete the detailed environmental study, the AER still does not have a plan on how to enforce that order.

The Bruders’ case is only one example of a much broader and systemic problem of lack of enforcement by the AER. 

In July 2014, the AER announced that approximately 37,000 wells out of 80,000 inactive wells were not in compliance with the requirements for inactive wells. How does a regulator, that bills itself as “world class,” allow almost half of all inactive wells in the province to be out of compliance?

More recently, we have seen situations where the AER issued numerous warnings and orders to companies with no effect, with the end result that the only option was to transfer hundreds of wells to the Orphan Well Association, leaving financial responsibility for these sites to be borne by other industry members, the Canadian taxpayer, and eventually the Alberta public. The AER has numerous enforcement tools at its disposal but it simply refuses to use these tools to ensure compliance.

Which leads me to my response to the question, “How do you solve a problem like the AER?”  In a recent letter to Shannon Phillips, the Alberta Minister of the Environment and Parks, and Margaret McCuaig-Boyd, the Minister of Energy, we made three recommendations.

First, before drilling a well, the operator should have to deposit sufficient funds with the AER to pay for the clean-up. Then, when an operator refuses to carry out the clean-up work, or goes bankrupt, the AER would hold the necessary funds to complete the work.

Second, in 2014, the Responsible Energy Development Act stripped the Minister of Environment and Parks of her power to enforce environmental orders against energy companies and gave those powers to the AER. Given that the AER appears unwilling to use those tools, we think that those powers should be given back to the Minister.

Third, we think that it is time to consider whether the AER should continue to exist. If the AER is unwilling to enforce Alberta’s laws and its own directives and orders, perhaps the AER’s role should be transferred to the Departments of Energy and Environment and Parks.

In a recent publication, Jim Ellis, the President and CEO of the AER, said that regulators like the AER “hold a moral and ethical obligation to initiate bold and courageous action to improve the human condition.”

Perhaps before the AER embarks on the lofty goal of changing the world, they should get the simple stuff right — like enforcing the law.

Image: Pumpjack in rural Alberta. Photo: Kris Krug/DeSmog Canada

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This article originally appeared on The Tyee.

Two University of Calgary law professors have demanded Alberta’s energy regulator withdraw its “inaccurate and misleading” statement on a Supreme Court of Canada ruling that a landowner couldn’t sue it for alleged rights violations.

The court ruled Friday, in a split decision, that Jessica Ernst couldn’t sue the oil and gas regulator for allegedly violating her Charter rights.

The Alberta Energy Regulator posted a statement on its website in response to the highly technical ruling.

“The Court did not find there was a breach of Ms. Ernst’s Charter rights, and made no findings of negligence on the part of the AER or its predecessor the ERCB,” declared the statement.

But law professors Shaun Fluker and Sharon Mascher have written in a popular legal blog that the regulator’s claim isn’t true.

“The AER Public Statement is inaccurate and misleading, and is not the sort of action we would expect a quasi-judicial tribunal to consider appropriate,” they write. “The Supreme Court made no finding at all on a breach of the Charter in the Ernst decision.”

In 2007, Jessica Ernst, an oil patch environmental consultant, sued the Alberta government, Encana and the regulator for negligence over contamination of local aquifers near her Rosebud home allegedly caused by the hydraulic fracturing of shallow gas wells in 2004.

After Alberta courts ruled that Ernst could sue the government but not the regulator due to an immunity clause passed by the legislature, Ernst took her case to the Supreme Court.

Her lawyers and the BC Civil Liberties Association argued that an immunity clause should not prevent a citizen from suing for violations of Charter rights.

Ernst’s lawsuit claimed the AER breached her rights by branding her a security threat in 2005 and refusing to communicate with her unless she stopped criticizing the board publicly.

In a split ruling, five members of the Supreme Court dismissed Ernst’s Charter claim based on the immunity claim and the argument that she should have sought a judicial review of the regulator’s actions — something that lawyers familiar with Alberta courts say is almost impossible.

Fluker and Mascher question the Alberta Energy Regulator’s judgment in posting the response to the case.

“The Ernst proceedings are, at their core, allegations that the AER acted punitively,” they note. “One might think that a quasi-judicial tribunal, accused of acting like a bully, would be happy to let these sort of proceedings end quietly in its favour. But apparently not.”

“This Public Statement on the Ernst decision is long on self-vindication and short on facts,” they wrote. “Most problematic is that the AER incorrectly states the Supreme Court has cleared it of wrongdoing in its dealings with Jessica Ernst.”

The regulator’s statement said the Supreme Court “made no findings of negligence on the part of the AER or its predecessor the ERCB” (Energy Resources Conservation Board).

But the issue before the court wasn’t negligence but the constitutionality of the immunity clause, Fluker and Mascher note. “To suggest that the Court made no findings of negligence suggests that it made a finding of ‘no negligence’” they wrote.

The AER is responsible for overseeing the lifecycle of nearly 400,000 active and inactive well sites as well as bitumen mines, pipelines, coal plants and gas processing facilities. Its comprehensive activities affect groundwater, farmland, air quality, land prices, provincial revenues and First Nation rights.

But critics say the adversarial agency works for the oil patch and is now chaired by Gerard Protti, a former energy lobbyist, and is largely funded by industry.  

Among landowners the AER has a checkered history. In 2007, the regulator was caught spying on citizens opposed to a power line.

First Nations and environmentalists have also repeatedly criticized the board for restricting access to public hearings.

One 2014 review concluded “the institutionalized processes of participation have been restricted to the point of nullifying the possibility of effective, democratic control over the expansion of the tar sands.”

Although the AER is supposed to arbitrate disputes between landowners and oil and gas companies over pollution, land devaluation and public health impacts, it rarely performs that function, said Fluker in an interview.

“Any landowner who has a problem with industry has to go to the AER,” said Fluker who runs a public clinic to help rural citizens impacted by energy developers. “But they are not going to get a fair shake. The AER is there to look after industry and that’s a big problem.”

Diana Daunheimer, a landowner suing Bellatrix Exploration over pollution near her land in Didsbury, said the regulator is entirely captured by industry interests.

“The AER does everything in its power — which by the way is totalitarian — to discredit or disregard Albertans harmed by oil and gas operations,” she said. “The AER has no public interest or public health mandate. How can the AER purport to protect public safety, when they have no mandate to protect public health?”

When mother and landowner Kimberly Mildenstein raised questions about traffic congestion caused by fracking trucks in central Alberta between 2011 and 2012, she says the AER did nothing.

“Basically the AER listens to community complaints very well and then ignores them very well,” said Mildenstein. “As citizens residing in fractured communities, we are lured to believe regulation for our safety exists.” It doesn’t, she said. Mildenstein and her family eventually moved to Vancouver Island due to regulatory inaction on fracking abuses.

Some members of the legal community have expressed dismay over the Supreme Court ruling.

“The Charter guarantees everyone the right to an appropriate and just remedy if their constitutional rights are violated, but a majority of the Court has now said that in some circumstances, legislatures may shield certain government administrative decision makers from Charter scrutiny,” noted Laura Track of the BC Civil Liberties Association.

“This decision has worrisome implications for people across the country seeking to hold government-appointed decision makers accountable for egregious unconstitutional actions.”

Ernst’s landmark lawsuit against the Alberta government and Encana over groundwater contamination caused by shallow gas fracking has now been before the courts for 10 years.

Not one piece of evidence has yet seen the light of day in court. 

In an email, the Alberta Energy Regulator’s senior public advisor Ryan Bartlett said the board welcomed comment from “all stakeholders” but “stands by its statement."

Image: Mysterious foamy water collected after heavy rainfall near a fracking site. Joshua B. Pribanic/Public Herald.

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A crude oil pipeline operated by Trilogy Energy Corp has released an unknown volume of oil emulsion, a mixture of oil and produced water, into surrounding marshland, according to the Alberta Energy Regulator.

Trilogy employees conducting a right-of-way inspection on the pipeline, located at the company’s Kaybob Montney oil project near Fox Creek, Alberta, discovered the spill on October 6.

Both the cause and volume of the spill remain undetermined.

An Alberta Energy Regulator spokesperson told DeSmog Canada that an inspector and staff are on site to ensure “an appropriate response to the incident” but could not provide more details on the spill.

An update published on Trilogy Resource’s website Tuesday evening says the pipeline has been shut in and purged to contain the source of the leak and added, “the volume of the spill has yet to be determined.”

The company, managed by Calgary Flames co-owner Clayton Riddell, estimates the spill currently covers three hectares of land, the equivalent of about 120 tennis courts, in a remote area. 

In 2011 a spill from a pipeline operated by Plains Midstream contaminated just over three hectares of beaver habitat and muskeg in a remote area near Little Buffalo, territory of the Lubicon Cree First Nation, after releasing 28,000 barrels of oil, almost 4.5 million litres, into the environment. It is considered one of the largest oil spills in Alberta's history.

According to the Alberta Energy Regulator, the Trilogy Energy spill location made the incident difficult to respond to.

“It’s tough to access. It’s really densely vegetated. The past few days have been spent creating an access to the impacted area so the crews can begin the deliniation [sic] and remediation work,” a spokesperson for the regulator told the Edmonton Journal.

Cause & Volume of #OilSpill in #Alberta Wetland Still Unknown 6 Days In https://t.co/GcYdBb4Lm7 #cdnpoli #ableg @carollinnitt

— DeSmog Canada (@DeSmogCanada) October 13, 2016

“Trilogy has developed a diversion plan that will minimize the infiltration of surface water and prevent further disbursement of oil,” the update from the company reads.

“Environmental specialists, wildlife experts and crews are on site assessing the situation, working closely with the Alberta Energy Regulator (AER).”

“Sampling and monitoring, recovery, waste management and wildlife and water control plans have been developed and are pending AER approval.”

The statement adds the company is collecting water and soil samples and that wetland and environmental assessments are ongoing. The company says efforts are in place to monitor and deter wildlife from entering the spill zone.

According to research conducted by the Florida State University, oil companies consistently underreport oil spill volumes, especially in instances of small spills and in remote areas.

In July, Husky Energy drew criticism for failing to properly report a pipeline spill that contaminated the North Saskatchewan River, a major source of drinking water.

An incident report on the Alberta Energy Regulator's website claims “there have been no reported impacts to wildlife” from the Trilogy pipeline release, although a spokesperson told the Edmonton Journal that response crews found two dead birds at the spill site as well as impacted beaver lodges.

A request for comment from Trilogy Resources went unanswered by time of publication.

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"Transparent,” “credible, “world-class” — those are just a few of the words that have been deployed to detail the aspirations of the one-year-old organization tasked with monitoring the air, water, land and wildlife in Alberta.

But there are a lot of questions about whether the Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA), funded primarily by industry, has lived up to its goal to track the condition of the province’s environment.*

Unlike the Alberta Energy Regulator, which the new NDP government is considering splitting into two agencies to separate its conflicting responsibilities to both promote and policy energy development, AEMERA hasn’t spent much time in the public spotlight — yet.

Last October, Alberta’s auditor general slammed the agency for releasing its 2012-2013 annual report in June 2014, well after when it should have been released. The auditor general also said the report “lacked clarity and key information and contained inaccuracies.”

Many of the agency’s projects were missing several details and the auditor general cautioned such omissions “may jeopardize AEMERA’s ability to monitor the cumulative effects of oil sands development.”

And that’s a pretty big problem. Because if Canada is to feasibly establish a strong environmental record, it’s going to need stringent monitoring in Alberta, especially in the Lower Athabasca region where the bulk of the province’s energy industry operates.

The Birth of A Really Long Acronym: AEMERA

AEMERA was dreamt up in 2011 as a means to coalesce the dozens of monitoring organizations working in the province under one banner, firewalling the result from government and industry to avoid conflicts of interest.

Martin Olszynski, an assistant professor in law at University of Calgary who specializes in environmental law, notes that at the time of the agency’s inception, international pressure was limiting market access for oil.

“When someone went to check on the monitoring system, it turned out it was a mess,” Olsznynski says. “We weren’t getting the data that we needed.”

AEMERA — with the Joint Canada-Alberta Plan for Oil Sands Monitoring serving as the transition agency for the three years prior to its official birth — was crafted to solve that problem.

Yet Bill 31, the piece of legislation that conjured up the arms-length agency in late 2013, faced considerable criticism from the get-go. Opposition parties pleaded for more than a dozen amendments.

Many of the proposed tweaks would have addressed the tight relationship between government and the monitoring agency. Amongst other things, the legislation suggested the environment minister would appoint the board and choose when data was released to the public.

Shaun Fluker, an associate professor of law at the University of Calgary, wrote in a 2014 post that the latter provision “arguably undermines the whole structure and suggests that politics can and will override science and transparency on environmental monitoring and reporting.”

All the proposed amendments were shot down. Lorne Taylor, former environment minister under Ralph Klein and renowned anti-Kyoto Accord activist, was appointed as chair of the board. Little has changed since.

Unlike other agencies, AEMERA doesn’t mandate quotas for groups or interests on the board. As a result, Bigstone Cree elder Mike Beaver is the sole indigenous representative on the agency’s seven-member board.

Traditional Ecological Knowledge, a method of integrating indigenous worldviews into policymaking, was listed as a priority in AEMERA’s founding document — yet the auditor generals’ report noted that just three of 38 of AEMERA’s projects surveyed involved Traditional Ecological Knowledge.

Val Mellesmoen, spokesperson for AEMERA, says the organization is working hard to foster strong relationships with indigenous people. In mid-June, the organization appointed a Traditional Ecological Knowledge panel to focus on such issues.

Insufficient Funding for Mobile Air Monitoring Van

Then there’s the overarching issue of funding. Exactly $50 million was decided upon as the max that industry would contribute per year, a number that features a “conspicuously round nature,” Olszynski says.

In late March, news broke that the Wood Buffalo Environmental Association — historically the recipient of the largest amount of money for monitoring — couldn’t afford the $500,000 price tag for a new mobile air monitoring testing van on account of a lack of funding.

Andrew Read, policy analyst at the Pembina Institute, says there’s no public information available as to why $50 million was chosen as the funding cap; he has submitted multiple requests to the federal government (which coordinated the interim monitoring framework prior to AEMERA’s takeover), but hasn’t received any clarification.

Mellesmoen, the agency’s spokesperson, says it was a “gentlemen’s agreement” with the number determined by “an initial estimate that was based on industry providing an overview of what they felt they were currently spending as individual companies.”

Mellesmoen — who previously served as Taylor’s spokesperson when he was an MLA and minister — says there are questions within the agency about the reasoning for the cap.

“Even that funding model needs to be maybe looked at in the long run,” she says.

New NDP Government Could Amend Bill 31

Olszynski says the newly elected NDP could amend Bill 31 to deal with such issues. Prior to being elected as premier, Rachel Notley was an outspoken critic of the monitoring agency, at one point asserting the organization was “nowhere near ready to assume responsibility for the [Lower Athabasca] region.”

The NDP’s platform also pledged to “strengthen environmental standards, inspection, monitoring and enforcement to protect Alberta’s water, land and air.”

This week’s decision to revisit the Alberta Energy Regulator’s mandate represents that focus. The press secretary for Minister of Environment Shannon Phillips didn’t respond to multiple requests for an interview on the subject.

International Experts to Evaluate Oilsands Monitoring

An international panel composed of six scientists will evaluate the performance of the new monitoring system. It plans to “evaluate the extent to which the implementation of the Joint Canada-Alberta Oil Sands Monitoring (JOSM) has improved the scientific integrity of environmental monitoring in the oil sands.”

The panel will deliver its report this fall, which will “help determine the next steps on the oilsands monitoring design and implementation.”

Olszynski emphasizes the uniqueness of AEMERA

“It’s an experiment, an innovative one, an important one,” he says.

Yet there’s much more to be done: stable funding must be solidified, the line between cabinet and organization must be clarified and the data must be analyzed and reported on in a way that regular Albertans can understand. AEMERA also has to expand its monitoring province-wide to fulfill its mandate.

“AEMERA needs to step out and demonstrate that they’re acting in the public interest,” Read says. “We want to see a demonstration of AEMERA actively taking and delivering that unbiased information to the government and providing a perspective on the current state of the environment.”

* Clarification Notice: This article originally stated that AEMERA is funded 100 per cent by industry. While AEMERA gets the bulk of its funding from industry, the agency also receives government funding for general operations and monitoring, evaluation and reporting activities in other areas of the province

Image: Kris Krug via Flickr

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Families forced to evacuate their homes in Peace River, Alberta due to toxic fumes from bitumen development have finally received official recognition of their plight.

This week an Alberta Energy Regulator (AER) panel released a report confirming the odours released from a Baytex Energy Corp. oilsands processing facility may have been the cause of health complications, including chronic coughing, disorientation, nose and throat irritation, fatigue, weight loss, gray skin, and the formation of growths, that forced the families from their properties.

Oilsands deposits in the Peace River region are extracted using a relatively new method called Cold Heavy Oil Production with Sand or CHOPS. The process involves pumping heavy oil from the ground to heated surface-level tanks that produce emissions plumes.

“The Panel’s main finding in this section is that odours from heavy oil operations in the Peace River area have the potential to cause some of the symptoms experienced by residents; therefore, these odours should be eliminated,” the report states.

The panel also noted a lack of clear communication concerning air monitoring to local community members.

Residents of the Peace River area have raised concerns regarding the fumes for nearly three decades but became more suspicious of the link to health complications in recent years and most notably after Baytex drilled new wells in 2011. The Alberta government does not monitor the Peace River region's air for anything but sour gas and sulphur dioxide and has previously claimed there is no scientific evidence to connect the Baytex emissions to the community’s symptoms.

In March of 2013 Alberta Energy Minister Ken Hughes visited the region and subsequently turned down Baytex’s application to add new drill sites.

“What I could detect was that there was something in the air that was different than the rest of Alberta,” Hughes said. “This kind of development was experiencing different emissions, and different air quality problems.”

As outlined in the recent AER report, Baytex now has four months to install pollution-control devices on its tanks. The report also calls for further studies into the connection between oil emissions and negative health impacts and recommends Alberta Health “ensure[s] that appropriate avenues exist to link local physicians with specialists in environmental health.”

During a recent AER public hearing in the area medical doctors admitted they hesitated to voice their suspicions about the fumes because of the potential consequences of appearing critical of industry. Some doctors refused to provide care for residents claiming their medical problems were directly related to the emissions.

Resident Karla Lebrecque told the panel her doctor called a local politician before agreeing to perform a blood test.

In an open letter to Baytex Energy Labrecque wrote “I am not a tree hugger, environmental activist or anti-oil activist. Quite the opposite; I fully appreciate the prosperity that our region has experienced thanks in no small part to Alberta’s thriving oil and gas industry.”

She added, “while I believe that Alberta is rightfully an energy superpower, I’m also a mother tired of my family being poisoned by Baytex Energy’s emissions and the Alberta Government allowing them to do so. I also believe it is possible for Baytex Energy to extract oil from the ground responsibly while simultaneously growing their company and that the same time protecting the health of those that live near and around their sites.”

Greenpeace climate and energy campaigner Mike Hudema says what’s happening in the Peace River region highlights the uncertainties surrounding the extraction and processing of bitumen.

The “troubling thing the report showed was that the government has a huge information gap when it comes to the impacts of tar sands development. The report shows that tar sands impacts will be different given differences in things like geology and wind patterns and regulations should, but don’t, currently reflect that. It also shows that, once again, Alberta’s monitoring system is inadequate,” he wrote.

Image Credit: StopBaytex.ca

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The Alberta Energy Regulator (AER) has released new figures tallying the total volume of bitumen emulsion recovered at the Canadian Natural Resources Ltd. (CNRL) Primrose site in Cold Lake, Alta. The new total — 1,177 cubic metres or 1.1 million litres — is more than a third lower than previously reported amounts.

An earlier incident report from November 14, 2013, states more than 1,878 cubic metres of emulsion was recovered at the four separate release sites, where the mixture of bitumen and water had been leaking uncontrollably into the surrounding environment for several months without explanation. That's enough liquid to fill an Olympic-sized swimming pool three-quarters of the way full.

CNRL's July 31, 2013, statement (pdf), released to investors just over one month after the leaks were reported to the AER, said that within the first month of cleanup, 1,000 cubic metres of bitumen emulsion had been collected.

Scientist Kevin Timoney, who's authored several reports on the CNRL leaks, said the reported figures just don't add up.

“The bottom line is, how do you go from essentially 1,900 cubic metres, which is what you get if you listen to the president of CNRL when he was talking in January, down to 1,177 cubic metres. How does that happen?" Timoney said. "And nobody has answered that."

Bob Curran, spokesperson for the AER, told DeSmog Canada the provincial regulator has no ownership of the volume amounts they report to the public and publishes figures given to them by CNRL without verification.

“Those numbers on that site are estimates. They are provided by the company. They are not confirmed AER numbers, nor have they ever been,” he said. “So if the company changes the estimate then we would change a number on the site, until such a time that we arrive at a final number. We haven’t done that in this case so those numbers continue to be estimates supplied by the company.”

Timoney said the U.S. regulator, the Environmental Protection Agency, would never rely on industry for that type of data. "They’d be out there gathering data and determining how much had been spilled and how much had been cleaned up," he said.

When pressed on the disparity between current reported figures and previously reported figures, CNRL spokesperson Zoe Addington said the difference was a matter of “reconciliation.”

CNRL has removed oil, processed water, fresh water, vegetation and soil from the site. Addington was unable to clarify if the decrease in recovered bitumen emulsion volumes was due to an increase in reports of removal of other materials, such as fresh water and vegetation.

A CNRL report states, “Numbers have changed since the last reporting period based on a reconciliation of volumes with the receiving facility.”

Timoney, an ecologist with Treeline Ecological Services who just released a new report this month called CNRL’s Persistent 2013-2014 Bitumen Releases near Cold Lake, Alberta: Facts, Unanswered Questions, and Implications (pdf), said he'd like to see the data.

"Reconciliation is a nice word, but show me the numbers," he said. "I’m a scientist so I really want to see how this comes about."

He said even the AER and CNRL's own figures at times don't match. In mid-January AER published the 1,177 cubic metre volume while CNRL was still posting 1,864 cubic metres.

"Since I can’t get on site and they won’t give me the raw data, I just really have to report what they say and point out when it doesn’t agree," Timoney said.

Canadian Natural Resources Ltd. images show the continued seepage of bitumen to the surface at location 9-21, the site of a water body now partially drained.

As a scientist, Timoney finds the lack of transparency dangerous, especially to the regulatory process. 

"This is one of the problems with the whole regulatory system, because … AER just simply reports, apparently reports, what industry tells them. They don’t do any checking."

Reproducing industry figures in the name of public disclosure isn't much of a solution, he said. 

"I think the regulator has a responsibility to provide an accurate assessment of the company’s activities. So if the regulator is not verifying information, it’s just simply acting as a clearing house for information industry gives it, it’s not doing its job. It’s not acceptable."

He added: "It’s a problem that’s only gotten worse over the years, in the sense that now AER is basically a non-governmental entity. It’s funded by industry. It’s not an agent of the crown so we don’t have the same sort of access to information we would if they were a government agency. So the AER can basically do whatever it wants to do and the public doesn’t have any recourse. It’s unbelievable, really, when you think about it."

CNRL says cleanup is now complete at three of the terrestrial seepage sites. The final site, 9-21, located beneath a body of water that has since been partially drained, continues to seep bitumen.

According to Addington: “Seepage from the fissures has slowed to an almost imperceptible rate.” CNRL currently reports the rate of seepage for all sites at less than one cubic metre (1,000 litres) per month.

All images courtesy of CNRL.

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A draft version of a new investigative report released this week by Global Forest Watch and Treeline Ecological Research argues the series of underground leaks currently releasing a mixture of tar sands bitumen and water into a surrounding wetland and forest on the Cold Lake Air Weapons Range is related to a similar set of spills caused by Canadian Natural Resources Ltd. (CNRL) in-situ operations in 2009.

The cause of the 2009 seepage was never determined and details of an investigation by the Alberta Energy Regulator (AER), then called the Energy Resources Conservation Board (ERCB), weren’t made public until last year, four years after the initial incident.

The new report, called “CNRL’s Persistent 2013 Bitumen Releases Near Cold Lake, Alberta: Facts, Unanswered Questions, and Implications,” takes aim at the AER for allowing certain in-situ, or underground, tar sands extraction technologies to continue without adequately addressing “major unknowns.” The independent investigation reveals the AER continually fails to protect the public interest in relation to these spills and that both industry and government demonstrate 'dysfunction' in their lack of transparency with the public.

CNRL, the company responsible for both the 2009 and current leaks, uses a process called High Pressure Cyclic Steam Stimulation (HPCSS) to fracture underlying bedrock in order to extract bitumen under pressure. HPCSS uses extremely high pressures and temperatures to create underground fractures allowing for the migration of bitumen. According to the ERCB’s investigation of the 2009 incident, these underground fractures were offered as a potential explanation for the uncontrolled release of bitumen above ground.

Despite multiple investigations, regulators and industry were unable to definitively identify the cause of the 2009 incident. The new report’s two authors, Peter Lee and Dr. Kevin Timoney, suggest this lack of certainty makes the company’s continued operation in the area, and use of HPCSS technology, inexplicable.

“In light of the unquantified risks to the bitumen reservoir, groundwater, and the adjacent ecosystems, the decision by the ERCB to allow HPCSS to continue during and after the [2009] incident was unjustified by the available evidence,” the report states.

There are “spatial and temporal” reasons for believing the two incidents are related, claim the authors. An analysis of the time and locations of the seepage shows a consistent pattern of leaks, each migrating outwards from a central location where the 2009 incident occurred.

Although the causes of the incidents remain “unclear,” they write the seepage is “known to involve migration of bitumen emulsion through a network of vertical and horizontal fissures.”

A map of the affected areas in 2013 from the Global Forest Watch report.

“Due diligence dictates that all HPCSS operations should be suspended until major unknowns are addressed. If not, continued use of HPCSS may result in large and unpredictable costs, and those costs will not be borne by the energy companies but by future generations,” the report states.

Crystal Lameman, member of the Beaver Lake Cree Nation whose traditional territory the seepage is within, says the ongoing situation calls into question the role and ultimate purpose of the AER. “What is their job, really?” Lameman asks. “What is their job and what is their agenda?”

The AER’s role depends upon their ability to regulate industry, she says. “They are supposed to be monitoring them and ensuring they are following through with the proper protocols, policies and procedures,” she said.

Crystal Lameman of the Beaver Lake Cree Nation. Credit Emma Pullman.

Lameman says the AER’s inability to prevent multiple releases of bitumen into the environment is difficult to understand.

“Are they becoming deliberately ignorant to what industry is doing? Are they turning a blind eye? I guess I’m asking these questions because I can’t think of any other reason these thing like the CNRL spill can happen, or not be stopped, or reported at a quicker rate. It causes concern for me as someone who lives in a tar sands impacted community.”

For Lameman, the ongoing incident in Cold Lake is a part of a longer-running pattern.

“Since they’ve changed their name from the ERCB to the AER, I’ve seen nothing but a bad track record in the way they report, in the way they provide comment, the lack of expediting information to local First Nations people. What I’ve found is that we’re often the last ones to find out about these spills.”

The Global Forest Watch report also criticizes both the AER and CNRL for failing to communicate adequately with the media and the general public. The lack of information, says Lameman, leaves impacted communities guessing.

“What next? Are we going to find out that the spill from ’09 has been ongoing since ’09? And the AER, at that time the ERCB, didn’t tell us? Are we going to find out next that CNRL was pumping at higher pressures than they were supposed to?” she asked. The question of dangerously high injection pressures is a concern also raised by Timoney and Lee in the investigative report.

For Lameman, the events on CNRL’s site bring to light the inherent dangers of extracting bitumen deposits with in-situ technologies. “We’re putting our guards down when we believe the AER when it says that in-situ and SAGD are safer methods. How? How are these safe?” she asked. “The more spills that happen, [the AER] is proven otherwise.”

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According to new figures released by the Alberta Energy Regulator (AER) the total amount of bitumen emulsion – a mixture of tar sands heavy crude and water – released on Canadian Natural Resources Ltd.’s (CNRL) Cold Lake Site is now more than 1.5 million litres, or the equivalent to more than 9600 barrels of oil.

The reported amount has grow from an initially estimated 4,450 litres or 28 cubic metres in late June, according the AER’s website.

The figures, made public by the AER, are reported to the regulator from CNRL, prompting onlookers to raise concerns about industry self-reporting.

Bob Curran from the Alberta Energy Regulator says that it is normal for companies to report spill volumes and rates in incidents like these. Although, he adds, “these aren’t numbers that we’re saying we’ve 100 per cent verified but these are numbers that are being reported to us. I think there’s an important caveat on that.”

The seepage, which reportedly began in early 2013, although wasn’t officially reported to the public until late May, is occurring on sites where CNRL uses High Pressure Cyclic Steam Stimulation (HPCSS) to recover bitumen from deep reservoirs. The process uses a combination of high pressures and temperatures to fracture the rock surrounding bitumen deposits. Super hot steam melts and pressurizes the bitumen, allowing it to surface up a wellbore.

Currently, on at least 4 CNRL sites, pressurized bitumen is leaking to the surface through uncontrolled fissures in the ground. Both the AER and CNRL are unable to explain the cause of the spill or say when it might stop.

The AER didn't immediately announce the incidents to the public. The AER's Bob Curran told Postmedia News, “The first three incidents were quite small compared to this last one. There were no public impacts, there were negligible environmental impacts. No real trigger to put out a news release.”

Crystal Lameman, member of the Beaver Lake Cree Nation whose territory includes the Cold Lake spill site, says she's frustrated with the AER's tendency to minimize the incident and its impact.

"The mere fact that they are the ones that determine what is minimal when it doesn’t directly impact them – that concerns me. I’ll be the judge of what is deemed minimal when toxic water is spilling out on the land in our traditional territory. So just because it may at that time have not affected a human being, it affects those beings that cannot speak for themselves and those beings that we have the constitutionally protected right to fish and hunt. But if they’re drinking toxic water and breathing toxic air how can they guarantee to us that those animals are in their purest form?" she said.

"I have a real issue with the way that they determine what is minimal, what is of concern, what is a lot, what it a little. That concerns me because thus far, since they’ve changed their name from the ERCB to the AER, I’ve seen nothing but a bad track record in the way they report, in the way they provide comment, the lack of expediting information to local First Nations people. What I’ve found is that we’re often the last ones to find out about these spills."

The released caused the death of 2 beavers, 49 birds, 105 amphibians, and 46 small mammals, the AER reports. Clean up and containment efforts are still ongoing and the early stages of a subsurface investigation are underway.

The AER and Alberta’s Energy and Sustainable Resource Development have launched provincial investigations and recently Environment Canada announced a federal investigation is also being undertaken.

Image Credit: Emma Pullman/CNRL

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The ongoing seepage of bitumen emulsion – a mixture of heavy tar sands oil and water – on Canadian Natural Resources Ltd.’s (CNRL) Cold Lake operations is now reportedly occurring on six sites, up from a previously reported four.

The two new sites were identified by the Cold Lake First Nation, according to a press statement released early Monday.

“Our people want answers and factual information on the contamination of now, six surface releases of bitumen oil,” said Cecil Janvier, Council Member and Media Spokesperson for the Cold Lake First Nation.

The Cold Lake First Nation says they want greater involvement in the ongoing release of oil on their traditional Treaty 6 territory and suggest that they have been left in the dark by CNRL.

High-pressure cyclic steam stimulation or HPCSS is used by CNRL to fracture underground rock and heat up deep reservoirs of bitumen, allowing a resulting mixture of bitumen and water to surface up a wellbore. In CNRL’s current operations several uncontrolled fissures are leaking bitumen above ground, possibly due to unintended fractures below. The company claims the mechanical failure of a wellbore is to blame, although the Alberta Energy Regulator (AER) states there is no known cause for the ongoing leakage at this time.

Multiple investigations into the cause of a similar 2009 underground release were inconclusive, although the Energy Resources Conservation Board (now AER) stated “a contributing factor in the release may have been geological weaknesses in combination with stresses induced by high-pressure steam injection.”

The current series of underground leaks have forced more than 1.4 million litres of bitumen emulsion to surface on the ground and in a body of water near the company’s operations. The leaks are still uncontrolled at this time.

“I'm really distressed about the safety of our drinking water, animals, vegetation and how this is affecting the aquifers underneath our Dene lands. Our future generations will not be able to enjoy what once was pristine Denesuline territory. Animals such as wolves and bears are now migrating through our community, which is a safety risk and precaution. The environment is changing and definitely not for the positive,” stated Chief Bernice Martial in the press release.

CNRL investor relations spokesperson Zoe Addington contradicts the Cold Lake First Nation’s claims, saying “there have been no further discoveries of bitumen to surface.”

“Canadian Natural Resources Limited reported that bitumen emulsion was discovered at surface at four separate locations. The discoveries were immediately reported to the Alberta Energy Regulator and concurrently crews were dispatched to initiate necessary action. Each location has been secured and clean-up, recovery and reclamation activities are progressing well. Regular updates can be found on our website at: www.cnrl.com,” she told DeSmog Canada in an email statement.

Currently CNRL is the only body reporting on the rate and volume of the release. The AER, the province’s main oil and gas industry regulator, is reporting CNRL’s figures on its website.

“These numbers are not absolute, they’re not final,” says Bob Curran from the AER, “they may be adjusted as new information comes to light.”

“They’re not indicative of anything except the fact that they’re being updated at this point. I don’t know how much stock you can put into them other than we’re updating information with the information that we’re given as quickly as we can.”

“These aren’t numbers that we’re saying we’ve 100 per cent verified but these are number that are being reported to us. I think there’s an important caveat on that,” he said.

Curran says that it is normal for industry to report its own figures in an instance like this. “We certainly try to verify those figures but yes it’s their facility, it’s their issue that they have to deal with. Our role is to ensure they are responding appropriately.”

The AER has released several updated incident reports on the leakage as part of its larger effort to provide information on “energy-related incidents that may impact the public,” their website states.

The AER first reported on the incident on June 24th, claiming 28 cubic metres of bitumen were released. The most up-to-date figures, released September 6, 2013, claim that more than 1444 cubic metres, or more than 1.4 million litres, of bitumen emulsion have been recovered so far from the uncontrolled seepage. 

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