August 2012

Cozying up for the environment

Will the latest oil sands alliance bring on a new eco-era?

By Graham Chandler

When Ken Hughes was named Alberta’s energy minister this year, he publicly recognized the pro­vince’s need for a social licence to continue resource developments. He was, perhaps, drawing on mo­ment­um building within the oil sands industry itself. Two months before Hughes’ appointment, a dozen major oil sands producers formed Canada’s Oil Sands Innovation Alliance, or COSIA, a new consortium aimed squarely at cleaning up the oil sands’ image.

COSIA’s mandate, said Dan Wicklum, chief executive of the alliance, “is to accelerate the pace of environmental performance improvement.” The participating companies have pledged to share their experiences and intellectual property with one another in order to further the COSIA cause. With that, he has spent recent months hitting the speaker circuit promoting those efforts and raising awareness.

COSIA joins a string of oil sands produc­er alliances collaborating on research and development, though not all are environmentally focused. And some of the existing organizations will fold into the COSIA mandate, including OSLI (Oil Sands Leadership Initiative) and OSTC (Oil Sands Tailings Consortium) and some functions of CONRAD (Canadian Oil Sands Network for Research and Development).

CONRAD was formed in 1994 as “an R&D network promoting shared research.” Its members include seven major oil sands operators and 29 supporting, government and academic organizations. OSLI’s members are six leading operators whose main purpose is to drive leadership initiatives and improvements in the environmental, economic and social performance of their companies and the industry. OSTC’s seven members are oil sands mining operators focused on tailings pond research.

The well-defined focus of the OSTC has allowed it to be the first to integrate with COSIA. “OSTC has made the decision that they would essentially cut and paste themselves from independent space and put themselves inside COSIA,” said Wicklum. “So now they operate as the Tailings Environmental Priority Area (Tailings EPA).”

That EPA represents a quarter of what COSIA will do. “We will have four EPAs – tailings, water, land and greenhouse gases,” explained Wicklum. He expects relevant projects and parts of the other organizations to map into COSIA as well. “In fact, those organizations are helping us scope COSIA and form it. And our goal here is not just to make sure there is no interruption in the work that’s being done, but to make sure the COSIA model will be even more enabling for that work.”

CONRAD overlaps include water and land reclamation activities. “Overlap will be eliminated during 2012 as those activities move from CONRAD over to COSIA,” said Carolyn Preston, CONRAD’s executive director, “including our Water Focus Group and Environmental and Reclamation Research Group consortium.” When the dust settles, CONRAD will continue but “not be participating in any COSIA projects,” she added.

COSIA will inherit most of OSLI’s environmental projects within the year too. “We really see OSLI as an early innovator and enabler of collaboration in the oil sands, and COSIA as the evolution of that effort,” said Vincent Saubestre, OSLI’s executive director. “As COSIA becomes ready to take on projects that fit their environmentally focused mandate, OSLI projects will migrate to COSIA where they can be scaled up with more participants.”

The alliances have been effective. “OSLI proved that collaboration could work more quickly and efficiently in non-competitive areas of oil sands development, such as environmental stewardship,” said Saubestre. An example: “in our Faster Forest program, five companies planted about one million trees in three years to speed reforestation on seismic lines and well sites,” he said. CONRAD’s Preston cited its Froth Treatment Consortium, which developed the game-changing paraffinic froth treatment technology.

COSIA does not, however, fund research – that will be up to its members. “We won’t be a granting entity; we consider ourselves an overarching collaborative hub,” said Wicklum. “The actual innovation will happen in what we call joint implementation projects or JIPs. To give you an idea of scale, for tailings this year we expect to spend about $90 million, done under the auspices of the tailings EPA.”

To accomplish its lofty goals, though, COSIA will have to push transparency further. Richard Dixon, executive director at the Centre of Applied Business Research in Energy and the Environment, the energy arm of the Alberta School of Business at the University of Alberta, reckons they will need very clear goals. “The challenge will be to show the outcome performance measures and hold to them,” he said. Wicklum said he shares Dixon’s concern, and that clarifying performance measures is a COSIA mandate. “It’s a first for the sector,” he said, “to set goals and report back publicly on progress.”

Finally, according to Dixon, gaining credibility for the industry in a global context is critical.

“More and more people are aware that companies green-wash,” he said, pointing out the need for real expertise. And posing one of the many questions surrounding the new alliance: “Can they recapture a lot of leadership within the environmental field?”

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