Syncrude's Mildred Lake mine site and plant near Fort McMurray, Alberta. The tailings pond can be seen behind the stockpiles of sulphur.

A couple of weeks back 12 companies operating in the oil sands of Alberta, Canada announced the formation of the Canadian Oil Sands Innovation Alliance (COSIA). The oil sands (or tar sands, depending on who you ask) are both famous for their magnitude (3^rd in proven reserves behind Saudi Arabia & Venezuela), and infamous for their environmental footprint. The alliance was created to foster co-operation among the member companies to address the “infamous” side of this equation, in terms of four “Environmental Priority Areas”:

1. Tailings – The slurry of water and waste products left over after crude oil has been extracted from the oil sands. This mixture, high in concentrations of heavy metals and naphthenic acids, is usually impounded in man-made ponds to aid sedimentation and drying of the material in preparation for remediation.
2. Water – Oil sands operations require large volumes of fresh water from the Athabasca and other rivers, and from fresh water aquifers.
3. Land – In situ and especially open pit mining operations in the oil sands are disturbing large areas of Alberta’s northern boreal forests.
4. Greenhouse gases – Extraction and refining of crude oil from the oil sands is more energy and greenhouse gas intensive than conventional sources of petroleum.

Some might call me naïve but I’m cautiously optimistic about COSIA. Sure, much of the benefit for the 12 signatories is realized simply through the public relations value of membership, and it’s still unclear how companies will share intellectual property, and financial and human resources. Accusations of greenwashing abound. But COSIA is an acknowledgment by producers of the significant and unique environmental impacts of the oil sands, and that’s definitely a step in the right direction. It’s especially encouraging given the progress made by the Oil Sands Tailings Consortium (OSTC), a similar industry group formed in 2010 to facilitate innovation in the management and remediation of oil sands tailings. The 7 member companies of OSTC have openly shared their tailings expertise and technology, and in 2011 alone, dedicated $90 million (CAD) to joint research and pilot projects through the OSTC structure. These examples show that the industry actors, who are usually fierce competitors, realize the potential benefits of working together to improve environmental performance. This type of industry co-operation is a tangible, productive approach that will surely accelerate improvement in oil sands operations.

However, a comment made Oil Sands Leadership Initiative (OSLI) executive director Vincent Saubestre at the COSIA annoucement, struck me as odd.  He is paraphrased in a National Post article saying that, in order “for companies to maintain their social license to operate in the oil sands they have to look beyond minimum regulatory requirements.” That’s a nice sentiment, and it makes me think that companies are doing more than purely paying lip service to the concepts of corporate social responsibility and the triple bottom line. But what does it say about the “minimum regulatory requirements”? What purpose does industrial regulation serve if not to establish some minimum standards for socially acceptable operation? And how is it that an industry group has come to speak on behalf of society’s interests? This is just one more indication of the curious relationship between the energy industry and the Government of Alberta.

Since 2004 (and the ramping up of oil sands development) Alberta has maintained a Washington D.C. office, which “promotes Alberta’s economic and policy interests in key areas, such as energy…,” and in the fall of 2011 appointed a special envoy to Asia to promote Alberta’s energy interests there. In response to access-to-market and public relations challenges, most recently related to the proposed Keystone XL and Northern Gateway pipeline projects, powerful members of the Alberta Government are sent abroad to pitch the advantages of crude oil from Alberta. The Government’s efforts to lobby on behalf of Alberta’s economic interests are too often tantamount to a taxpayer funded oil sands industry lobby. In the meantime the industry is left to self-determine, through organizations like COSIA and OSTC, the standards to which they must adhere to maintain their social license to practice. That seems backwards to me.

It’s time for a shift in strategy from the Government of Alberta. Instead of focusing on re-branding and controlling the discussion about the oil sands the Government should focus on better defining what constitutes the “social license to practice”. What does this mean for environmental monitoring and regulation? What kind of environmental impact due to oil sands development is acceptable, not only within Alberta, but in Canada and internationally? The Government has taken some steps towards addressing environmental issues but, like a game of whack-a-mole, every time they tackle one another seems to pop up. Environmental agencies are currently working together with independent scientists to develop a comprehensive new environmental monitoring program, while just this past week University of Alberta Professor David Schindler, one of the lead architects of the new program and an outspoken critic of oil sands development, published a paper showing that much of the wetland habitat destruction associated with oil sands development is irreversible. One step forward, another right back.

These issues are indeed complex, but they are key to ensuring the sustainability of Alberta’s energy industry both environmentally and economically. Most telling is that industry has already recognized this relationship. Now the Government needs to get out of the lobbyist role and assume leadership in facilitating demonstrable improvements in environmental performance.