Sept/Oct 2011

A question of balance

Oil sands miners seeking solid footing during a time of economic, social and regulatory change

By E. Moore

The coker towers at Suncor's operation north of Fort McMurray, Alberta | Courtesy of Suncor Energy Inc.

To find a growth powerhouse, one only has to look at the Alberta oil sands. Since 2005, mined production of synthetic crude oil and bitumen from the oil sands has expanded almost 40 per cent. The oil sands’ expansion will undoubtedly continue for years to come: with overseas oil supplies seemingly uncertain, the United States has an interest in maintaining its own fuel sources, and oil sands operators are betting on that market need.

“The vast majority of new oil supplies in Canada are forecast to come from the oil sands,” says Greg Stringham, vice-president, oil sands, Canadian Association of Petroleum Producers (CAPP). By 2025, CAPP predicts that oil sands production will grow to 3.7 million barrels of oil equivalent per day, up from 1.5 million in 2010.

About one-third of that estimated growth will come from surface mining, although the major producers’ experiences show that building and expanding bitumen mines on time and within budget is no easy task. Fluctuating oil prices, high costs and environmental concerns have stretched out the timelines of the construction projects currently underway. But their operators are confident that their plans will reach fruition.

New reclamation rules

As the oil sands operations grow, increased public scrutiny has added new layers of work to site plans, as well as external relations and legal departments. The large, long-lasting tailings ponds created by mining operations are particularly visible targets. In response to concerns about their impact, Alberta’s Energy Resources and Conservation Board issued a directive in 2009 requiring all mineable oil sands operations to reduce their fluid tailings. Dry “dedicated disposal areas” must compose half of total tailings by 2013, and the disposal areas must be reclamation- ready five years after deposition has ended.

Oil sands companies had already been working on researching and developing tailings management technologies, but the existence of specific goals and timelines has accelerated and redirected their research efforts. Syncrude Canada Ltd., which had already been using composite tailings and researching water capping solutions, began to study centrifuging technology in response to the directive. “It’s a faster way to get the water out of your tailings as opposed to the other technologies,” explains Cheryl Robb, media relations adviser at Syncrude.

Barry Palmer, general manager of heavy construction and mining at North American Construction Group (NACG), reports that new tailings requirements make more work for contractors as companies seek to test out technologies without initially investing in their own equipment. “We’ve been actively engaged in construction of some of their tailings mud drying cells,” he says.

For Imperial Oil, the regulation meant a redesign and reapproval of its Kearl mining project, initially approved in 2009. The company is still researching tailings technologies that will pass muster, but the Energy Resources and Conservation Board (ERCB) allowed it to delay meeting the requirements until 2018 on the condition that it would thereafter exceed them. The first phase of production at Kearl is scheduled to commence in late 2012.

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