Friday, 3 June 2011

Wall Street Journal Reports- Canada Proposes Beefed Up Monitoring of Oil Sands- Highlights BioLargo Opportunity

  • The Wall Street Journal


Canada Proposes Beefed Up Monitoring of Oil Sands

CALGARY—Canada's federal government has proposed a plan to revamp environmental monitoring in the country's oil-sands industry in response to criticism of the current system and amid growing environmental and regulatory scrutiny in Canada and the U.S.

The proposed regulatory overhaul comes after a recent series of reports and scientific studies concluded the existing environmental monitoring system has failed to examine all the sources of pollution created by the oil-sands industry. The U.S. State Department, meanwhile, delayed this month approval of a key Canadian oil pipeline that will transport mostly oil-sands crude to the U.S., pending more environmental studies.

The new oversight comes amid soaring global crude prices and renewed debate in the U.S. over energy security. Oil-sands production has long been seen in Ottawa and Washington as an attractive alternative in meeting American demand, compared to supply sources in more volatile regions, including the Mideast and Africa.

The oil-sands industry already accounts for about half of the 1.9 million barrels a day of oil that is exported to the U.S. Output is widely expected to double in size during this decade. But that growth rate partly depends upon the industry's ability to defend its environmental record.

The new proposal will create a new environmental monitoring framework to collect water-surface data from several areas around the oil-sands region in northeastern Alberta. The cost, at roughly 20 million Canadian dollars, or $20.5 million, a year, will be borne by oil-sands producers.

"We are confident that we can protect the environment while seeing the economic benefits of the oil sands," Environment Minister Peter Kent said after unveiling the plan late Thursday.

The federal government worked with the province of Alberta to design the new system, which will be a joint effort between the province and the federal government. Alberta's environment ministry is expected to unveil its own recommendations for the new system in June.

Flaws in Alberta's current monitoring system were exposed last year by University of Alberta water scientist David Schindler. His work showed that air pollution from the oil sands industry was settling on snow and then melting into the Athabasca River, and possibly impacting health of animals and humans downstream.

After first insisting that the pollution Mr. Schindler uncovered was naturally present, rather than created by the industry, the Alberta government admitted this year that its monitoring system, a joint-effort between the provincial government, oil-sand companies and native groups, was inadequate to measure the kind of pollution discovered in the region.

Write to Edward Welsch at edward.welsch@dowjones.com

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