Canadian oil and gas companies could be liable for billions of dollars of damages per year for their contribution to climate change caused by toxic greenhouse gas emissions, according to a study published Thursday.

The study looked at five oil and gas companies currently trading on the Toronto Stock Exchange — Encana, Suncor, Canadian Natural Resources, Talisman, and Husky — and found they could presently be incurring a global liability as high as $2.4 billion annually.

“Climate change is increasingly discussed not as some far-off threat but in terms of current realities,” said the 62-page study — Payback Time? What the internationalization of climate litigation could mean for Canadian oil and gas companies.

Published by the Canadian Centre for Policy Alternatives and West Coast Environmental Law (WCEL), the study found data showing the global financial cost of private and public property and other damage associated with climate change in 2010 has been estimated at $591 billion, rising to $4.2 trillion in 2030.

“That number is expected to increase dramatically in the coming years,” said the study written by Andrew Gage, WCEL staff counsel and University of British Columbia professor Michael Byers.

“In Canada, the National Roundtable on the Environment and the Economy has estimated that climate change will cost $5 billion annually by 2020. Given these significant costs, attention will inevitably shift to the issue of compensation and liability. In short, who will pay for the costs and damages caused by climate change, as well as the necessary adaptive measures?”

Fossil fuel companies and other large-scale greenhouse gas producers have contributed, globally, to trillions of dollars of damages related to climate change, Gage said in an accompanying media release.

“As with tobacco companies in the 1980s, these producers are confident the law will not hold them responsible for these damages,” Gage added.

“But rising levels of climate damage, increasing scientific evidence about the links between emissions and the damage they cause, and an emerging public debate about who is financially responsible for this damage, could change the situation very quickly.”

The most serious risk to Canadian companies is not litigation in Canada, the media release said. “Because the impacts and causes of climate change are global, climate damages litigation could take place in, and apply the laws of, any of the countries where damage occurs.”

Byers, Canada Research Chair in Global Politics and International Law, said substantial shifts will be required of large-scale greenhouse gas producers and their investors if they hope to manage the risk of climate damages litigation.

Those shifts include “moving away from fossil fuels, and supporting the adoption of international agreements that could link the reduction of liability risk to the provision of financial assistance or future emission reductions.”

The study concluded that the potential for climate damages litigation is global in scope.

“Cases could be brought in a large number of countries, under a wide range of legal theories, then enforced in Canada or other countries in which greenhouse gas producing companies have assets,” the study said.

“As a result, these companies and their shareholders are exposed to significant legal and financial risks — and these risks will only grow.”

In a telephone interview, Gage told DeSmog Canada that he is not aware of any successful climate damages litigation anywhere in the world, even in the highly litigious U.S.

“This is very new and in very early days but it is evolving fairly rapidly,” he said. “I would think there would be lawsuits of this type outside the U.S. within a couple of years but we’ll have to see.”

In a related commentary in Thursday’s Globe and Mail, Gage and Byers said climate change is no longer a distant threat.

“Canadian oil and gas companies could soon find themselves on the hook for at least part of the damage,” they wrote. “For as climate change costs increase, a global debate has begun about who should pay.”

They also noted Nobel Peace Prize laureate Desmond Tutu recently called on global leaders to hold those responsible for climate damages accountable.

“Just 90 corporations – the so-called carbon majors – are responsible for 63 per cent of CO2 emissions since the industrial revolution,” Tutu was quoted as saying. “It is time to change the profit incentive by demanding legal liability for unsustainable environmental practices.”

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This is a guest post by Andrew Gage, Staff Counsel and head of the Climate Change program at West Coast Environmental Law, and Michael Byers, the Canada Research Chair in Global Politics and International Law at the University of British Columbia. This article originally appeared in the Globe and Mail.

Climate change is no longer a distant threat. Peer-reviewed science has already linked climate change to drought in Texas and Australia, extreme heat in Europe, Russia, Japan, and Korea, and storm-surge flooding during Hurricane Sandy and Typhoon Haiyan.

Climate change is already causing about $600-billion in damages annually. Here in Canada, the National Roundtable on the Environment and the Economy estimated that climate change will cost Canadians $5-billion annually by 2020.

Canadian oil and gas companies could soon find themselves on the hook for at least part of the damage. For as climate change costs increase, a global debate has begun about who should pay.

Nobel Peace Prize laureate Desmond Tutu recently called on global leaders to hold those responsible for climate damages accountable. “Just 90 corporations – the so-called carbon majors – are responsible for 63 per cent of CO2 emissions since the industrial revolution,” Tutu said. “It is time to change the profit incentive by demanding legal liability for unsustainable environmental practices.”

So far, the fossil fuel industry has successfully opposed litigation for climate damages, brought in the United States by victims of hurricanes and sea level rise. But new areas of litigation often fail at first; in the 1980s, tobacco companies were still boasting that they “have never lost a case to a consumer, have never settled, and do not expect that picture to change.” As the tobacco industry learned, changes to the interpretation and application of laws sometimes occur quite rapidly.

Nor is litigation in the U.S. or Canada the only thing the fossil fuel industry should worry about. It is becoming increasingly likely that companies could be sued by victims of climate change overseas, in countries with quite different legal systems. There, they might face lawsuits based on constitutional rights to a healthy environment, strict liability for environmental harm, or any number of other legal principles that don’t currently exist in Canadian law.

Once a foreign court has ordered a Canadian company to pay for climate damages, that order is a debt – which Canadian courts can be asked to enforce. Chevron is currently fighting court actions in Canada, the United States and Brazil that seek to enforce a $9.5-billion award handed down by the supreme court of Ecuador – for pollution caused by oil spills.

Moreover, new laws could be introduced to facilitate climate litigation. When Canadian provinces encountered impediments to their ability to sue tobacco companies for public health costs, they eliminated those impediments by passing new laws. It’s not hard to imagine countries impacted by climate change enacting new laws to clarify the liability of greenhouse gas producers.

Five companies traded on the Toronto Stock Exchange are among the “carbon majors” – Encana, Suncor, Canadian Natural Resources, Talisman, and Husky currently are collectively responsible for about $2.4-billion a year of global climate damages.

Canadians are broadly supportive of the “polluter pays” principle – the idea that those who cause pollution should pay for the harm. But because climate change has seemed far off, there has been relatively little discussion about who should pay. It has been assumed – by industry, politicians, even some environmental activists – that oil and gas companies can continue producing with impunity, at least until a global climate agreement is reached.

But rising climate costs cannot be born only by taxpayers and by those who suffer the impacts of climate change. We believe that a new global awareness of the moral and legal responsibilities of the carbon majors will lead to a wave of climate litigation. Foreign lawsuits – with damage awards that are potentially enforceable in Canada – will be difficult and expensive to defend.

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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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The ongoing trouble on the Cold Lake Air Weapons Range in North Eastern Alberta, where oil company Canadian Natural Resources Ltd. (CNRL) has numerous in situ oil recovery sites, has yet to show signs of abatement.

Underground oil spills on CNRL’s Primrose facility have been leaking bitumen emulsion into the muskeg, waterways and forest that surround the site for nearly three months.

The Alberta Energy Regulator (AER) says the total volume of bitumen emulsion recovered from four separate sites where the seepage is ongoing is now 1275.7 cubic metres, the equivalent of 8024 barrels of oil or 1.27 million litres.

The original volume of the spill was reported as 28 cubic metres.

In addition, 397 cubic metres of “oily vegetation” has been removed from one of the sites numbered 09-21, and 5096.66 metric tones of “impacted soils” have been removed from the other three.

“Clean up continues on all four sites,” says the AER in an updated incident report released yesterday.

“Bitumen recovery at the source, skimming of other areas within water body and vegetation cutting continues” at site 09-21.

“Bitumen recovery, soil removal, fissure exposure, surface water management and containment efforts continue” on the three additional sites.

CNRL, the company responsible for the spill, released a press statement on July 31 stating “each location has been secured and clean-up, recovery and reclamation activities are well underway.”

Last week Cara Tobin from the Alberta Energy Regulator said, “the spill is still ongoing. There is still bitumen coming up from the ground…it is not under control [because] bitumen is still coming up…”

She provided no comment Wednesday, indicating a revised incident report would be published Friday, August 15.

That report states “2 beavers, 31 birds, 82 amphibians, and 31 small mammals” have died as a result of the spill.

“Wildlife fencing and deterrents are installed and CNRL continues to monitor all four sites for wildlife and impacted wildlife.”

The exact cause of the uncontrolled spill has yet to be determined. CNRL cited mechanical failures at the well as a potential cause in its press statement, although Tobin from the AER said “we do not have the technical data or evidence to verify what that cause might be – what the cause or causes might be. We will determine that through our investigation process.”

According to the revised incident report a “subsurface investigation has been initiated and is ongoing.”

CNRL experienced a similar incident in 2009 on their Primrose site. According to Tobin that incident “was the same sort of thing where pressure pushed bitumen to surface and until that pressure was naturally able to recede underground the product continued to – very slowly – come to surface.”

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

CNRL uses a process called High Pressure Cyclic Steam Stimulation (HPCSS) in the region to release bitumen from underground rock formations. The process uses extremely high-pressure steam injection to fracture the underlying reservoir to “create cracks and openings through which the bitumen can flow back into the steam-injector wells,” according to the AER.

Roughly 80 percent of Alberta’s bitumen deposits will be extracted using this and other in situ methods.

Last week more than 20 groups called on the AER to conduct a public inquiry into the safety of in situ operations.

“While the AER has suspended and restricted steam injection operations at the CNRL Primrose operations in response to the most recent events, it is unacceptable to have long fissures in the ground that will continue to spill toxic heated bitumen to surface, and to further risk our water and groundwater resources from these activities,” said Carolyn Campbell, Conservation Specialist with the Alberta Wilderness Association.

“The time has come for a broader inquiry into CSS and SAGD [steam assisted gravity drainage] steam injection operations,” she said.

Image Credit: Emma Pullman

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Authorities in the tar sands region in Alberta are responding to the release of bitumen emulsion at the Primrose project in the Cold Lake Air Weapons Range, operated by Canadian Natural Resources Limited (CNRL).

According to a press release from the Alberta Energy Regulator (AER) “the affect area is off lease and has impacted a nearby slough. The company has begun clean-up operations. There were no injuries as a result of the release. The volume of emulsion released has not been confirmed at this time." Media relations contacts were unavailable for comment at the time of publication.

Bitumen emulsion is a mixture of heavy tar sands crude know as bitumen and water from in-situ (in ground) oil production.

According to the CNRL website, the company uses a “huff and puff” technology also known as Cyclic Steam Stiumulation or CSS to develop bitumen at the Primrose project.

During in-situ bitumen recovery, steam is injected into deep underground deposits of heavy crude oil. The resulting mixture of oil and water is called an 'emulsion.' 

CSS is unlike other in-situ recovery processes because it uses only one injection and extraction well. 

The Cold Lake area lies to the south east of Fort McMurray.

CNRL projects in the immediate area include Wolf Lake, Marie Lake and Hilda Lake, which together comprise the Clearwater reservoir that contains an estimated 10 billion barrels of oil.

The Alberta Energy Regulator (AER) is presently on site and working with CNRL, Alberta Environment and Sustainable Resource Development to "ensure that the incident is controlled, contained, and all appropriate clean up and mitigation measures take place. The AER is conducting an investigation into the cause of the incident. All information is preliminary and may be changed as updates are available," according to the press release.

It is unclear at this time where on the Primrose site the release occurred. There are three distinct Primrose locations, as seen in the CNRL map below.

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ForestEthics Advocacy released a game-changing research brief today documenting the massive foreign control of Alberta's tar sands oil industry. Publicly traded oil companies with active tar sands operations have a very high level of foreign ownership – 71 per cent.

Some supposedly "Canadian" oil companies including Suncor, Canadian Natural Resources Limited, Imperial Oil and Husky are predominantly owned by foreign interests. More than half of Canada’s oil and gas revenue goes to companies under foreign control.

This revelation stands in stark contrast to the talking points of the Harper administration and its media echo chamber, which insist that there is too much foreign influence over Canada's resource decisions from environmental groups. In fact, the evidence shows overwhelmingly that foreign interests are influencing tar sands and other resource decisions – chiefly Chinese and other foreign oil companies. 

Cue Ezra Levant's outrage at this foreign influence in Canadian interests! Where's Vivian Krause when you need her? Surely the Ethical Oil Institute will agree that this level of foreign intervention is a dangerous threat to Canada's future? 

Recall that when the Ethical Oil Institute launched its allegedly "100% Canadian" OurDecision.ca website, this was the statement by spokesperson Kathryn Marshall:  "We’ll never take foreign money to undermine our country’s national interests." 

The group admits that it receives funding from companies active in the tar sands. Now that it's been revealed that all these companies are predominently foreign-owned, the group's claims to be 100% Canadian are highly misleading. We await their statement correcting the record.

Anticipating that someone, perhaps from the 'ethical oil' team, will quickly attempt to do damage control by claiming that this is just some ginned up report by ForestEthics, let's be crystal clear that the data underlying the report are all from independent sources including Bloomberg Professional and industry journals. 

The ForestEthics Advocacy brief concludes:

"The Conservative Harper government is increasingly ruling in favour of foreign-oil companies instead of Canadians. We need foreign investment and shareholders in this country, but it does not need to be at the cost of democracy, our environment, and future generations."

Read the full Forest Ethics Advocacy brief [PDF]: Who Benefits? An Investigation of Foreign Investment in The Tar Sands  

Update: Rick Mercer's takedown of this "foreign-owned" nationalism talking point is increasingly accurate with every passing day. (H/T AnOilMan).  

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