Monday, July 31, 2017

Co-owner Darren Rath of Basin Environmental said his consulting company once found plenty of work designing reclamation plans for oilsands exploration programs, but that work has dried up. There were 1,686 oilsands evaluation wells drilled in 2014, but only 387 in 2016, according to Alberta Energy. “Honestly, I don’t expect a ramp-up anytime soon unless oil prices recover,” Rath said.---------------Julie Ali · University of Alberta I don't believe oil prices will go up so the economy will continue to deteriorate in my opinion. When oil companies are returning leases, when orphan wells are being abandoned so that we have to provide a $235 million dollar "loan" to get the oil and gas industry to take care of their liabilities and even throw in a $30 million federal payment to ensure that the loan is interest free--this indicates to me at least that the oil companies are in a state of transition. This state of transition out the door means that there will be an ongoing failure by the industry to take care of other liabilities like the tailings ponds. Citizens are going to be stuck with major liabilities because the PCs in the past and the NDP in the present aren't getting the industry to take care of these liabilities. The energy regulator of the AER doesn't appear to be working in the public interest and seems to be the front office of big oil The AER is pretty useless in getting the oil companies to take responsibility for pollution. For example, the tailings ponds reclamation process is a joke and the newest idea of digging a hole, putting the tailings precipitants in that hole and covering the entire with water to make a lake for citizens sounds so science fiction that it couldn't be true could it? But it is. https://energynow.ca/.../alberta-energy-regulator-to.../ Suncor (TSX:SU) had proposed to treat 75 per cent of its Millennium mine's tailings by clumping fine particles together and covering that material with fresh water. In its rejection of the plan, the energy regulator called water-capping an unproven method and said more information was needed about its risks, benefits, alternatives and reclamation timelines. The regulator now says it was not aware at the time of technology Suncor plans to use and it should be considered in an assessment. ***** I imagine the industry will eventually leave Alberta with major profits made and liabilities left for citizens to deal with. I don't think we will be able to deal with the pollution left behind and it's troubling that none of our political parties have any interest in making the polluter pay. But there you go. It's the way it is in Alberta. The oil and gas industry make the deals with the political parties and the public gets stuck with the pollution bills. I am especially interested in if any of these oil companies participated in the Tapcal Trust Fund creation in the Lougheed error. The Tapcal Trust Fund remains a mystery. Like · Reply · Just now

While everyone thinks Alberta is recovering and we have to listen to the spin of recovery -the truth of the economic problems is found in the abandoned exploration leases.  It's all over folks. And they're not coming back.  The oil companies that is.

The big oil companies with billions invested in infrastructure will stay put for a while but the small ones will be absorbed by the big companies. Then there will be fewer and fewer of them. One day we will look up and see that there are no more oil companies in Alberta. Just a fiction? I'd say not. We're subsidizing them to the hilt to ensure that they stay and make profits but eventually if they can't get the oil out in a cost effective way and their liabilities are staring the oil executives in the face I'm guessing they're going to make a run for it leaving the public holding the big bill for reclamation. I'm guessing the Lake District of Tailings Ponds isn't going to be a big revenue generator and so we'll have a permanent moonscape in Alberta just as a reminder of incompetence, indifference to the public interest and self interest by the PCs and now the NDP folks.

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http://www.edmontonjournal.com/business/energy-resources/companies+abandon+nearly+million+hectares+alberta/13931470/story.html

Companies abandon nearly one million hectares of Alberta oilsands exploration leases

DAN HEALING, THE CANADIAN PRESS, CALGARY HERALD  07.28.2017
Bitumen
Oilsands is a mixture of bitumen (a thick, sticky form of crude oil), sand, water and clay.SUPPLIED / CALGARY HERALD
oilsands
oilsands / CALGARY HERALD
In another sign the bloom is off the boom for the oilsands, the industry has returned almost one million hectares of northern Alberta exploration leases to the province over the past two years — abandoning an area far bigger than P.E.I.
The total area covered by oilsands leases remained constant at about nine million hectares between 2011 and 2014. But it fell to 8.5 million hectares in 2015 and 8.1 million in 2016, following the crash in world oil prices from over US$100 to under $60 per barrel in 2014.
Most of the returned acreage either represents expired or surrendered leases, according to Alberta Energy, which provided the statistics at the request of The Canadian Press.
Observers were surprised by the size of the lease returns which they attributed to industry cost-cutting and disinterest in spending to develop new prospects when there’s no money to build projects already on the books.
“It costs money to maintain these lands,” said Brad Hayes, president of Petrel Robertson Consulting in Calgary.
“You can’t convince shareholders to continue to put that money out if there’s no prospect for success.”
Alberta’s oilsands have been getting little respect lately, thanks to the exit of large foreign companies, the province’s hard cap on oilsands emissions, increasing carbon taxes and the stumbling price of crude oil.
Its troubles have been welcomed by environmentalists who point out the industry’s outsized impact on air, land and water pollution.
“This is good news. It’s a sign that investment dollars are shifting out of carbon-intensive energy,” said Keith Stewart, senior energy strategist with Greenpeace Canada.
Energy companies are often very secretive when buying Crown leases, usually acting anonymously through a land broker, and they are almost as secretive when giving up a lease position.
Canadian Natural Resources reported in disclosure documents that its holdings of oilsands leases fell by 46,000 hectares between 2014 and 2016. But when asked why, spokeswoman Julie Wood said in an email, “We can’t comment on specific dispositions to the Crown or third parties.”
Financial considerations, however, were cited in 2015 when junior oilsands company SilverWillow Energy Corp. announced it had returned three leases to the government to avoid $50,000 per year in fees — leases that cost about $2 million to buy at Crown auction in 2011 and were estimated to contain more than 80 million barrels of recoverable bitumen.
A few months later, the cash-strapped company, whose stock was worth $90 million in 2012, agreed to sell itself for $1.7 million to another Calgary firm.
Alberta Energy spokesman Ryan Cromb said oilsands leases are awarded with an initial 15-year term which can be extended if the company invests, usually by drilling wells or by beginning production. The primary leaseholder is charged rent of $3.50 per hectare, but there’s a rent increase if the lease is extended.
The province’s biggest auctions of oilsands leases took place in 2006, when investors paid almost $2 billion to buy 1.5 million hectares at an average price of $1,273 per hectare.
In 2016, only 44,000 hectares were sold at just $266 per hectare.
Co-owner Darren Rath of Basin Environmental said his consulting company once found plenty of work designing reclamation plans for oilsands exploration programs, but that work has dried up. There were 1,686 oilsands evaluation wells drilled in 2014, but only 387 in 2016, according to Alberta Energy.
“Honestly, I don’t expect a ramp-up anytime soon unless oil prices recover,” Rath said.
Rob Bedin, a director with RS Energy Group in Calgary, said many oilsands leases were bought 10 to 15 years ago by speculators who hoped to make a profit by reselling them at a later date.
The Alberta oilsands contain an estimated 1.8 trillion barrels of oil, about 168 billion barrels of which are considered recoverable using today’s technology.

There are about two dozen operating oilsands projects in Alberta. More than 70 others have regulatory approval but have not been green-lighted by their proponents.


Julie Ali · 
I don't believe oil prices will go up so the economy will continue to deteriorate in my opinion. When oil companies are returning leases, when orphan wells are being abandoned so that we have to provide a $235 million dollar "loan" to get the oil and gas industry to take care of their liabilities and even throw in a $30 million federal payment to ensure that the loan is interest free--this indicates to me at least that the oil companies are in a state of transition. This state of transition out the door means that there will be an ongoing failure by the industry to take care of other liabilities like the tailings ponds. Citizens are going to be stuck with major liabilities because the PCs in the past and the NDP in the present aren't getting the industry to take care of these liabilities.

The energy regulator of the AER doesn't appear to be working in the public interest and seems to be the front office of big oil The AER is pretty useless in getting the oil companies to take responsibility for pollution. For example, the tailings ponds reclamation process is a joke and the newest idea of digging a hole, putting the tailings precipitants in that hole and covering the entire with water to make a lake for citizens sounds so science fiction that it couldn't be true could it? But it is.

https://energynow.ca/.../alberta-energy-regulator-to.../
Suncor (TSX:SU) had proposed to treat 75 per cent of its Millennium mine's tailings by clumping fine particles together and covering that material with fresh water.

In its rejection of the plan, the energy regulator called water-capping an unproven method and said more information was needed about its risks, benefits, alternatives and reclamation timelines.

The regulator now says it was not aware at the time of technology Suncor plans to use and it should be considered in an assessment.

*****
I imagine the industry will eventually leave Alberta with major profits made and liabilities left for citizens to deal with. I don't think we will be able to deal with the pollution left behind and it's troubling that none of our political parties have any interest in making the polluter pay. But there you go. It's the way it is in Alberta. The oil and gas industry make the deals with the political parties and the public gets stuck with the pollution bills. I am especially interested in if any of these oil companies participated in the Tapcal Trust Fund creation in the Lougheed error. The Tapcal Trust Fund remains a mystery.
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Science fiction stories abound in the reclamation of the tailings ponds in Alberta. In the most recent rendition of the story we have precipitants made out of the tailings, then these precipitants are put in a hole in the ground; water is added to the top and voila! It's our newest lake to swim in! Who knew we could get a tourist attraction out of the tailings pond reclamation process? In a few years we won't have to advertise a moonscape scenario to tour but the tailings ponds lake district. Way to go Suncor! No wonder the AER is smitten with your plan. It's cheap, it's easy and solves a forty four year old problem that the PCs ignored.

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Julie Ali commented
https://energynow.ca/2017/05/alberta-energy-regulator-to-reconsider-suncor-tailings-plan-it-rejected/

Alberta Energy Regulator to reconsider Suncor tailings plan it rejected

May 25, 2017 by The Canadian Press
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CALGARY — Alberta's energy watchdog has agreed to reconsider a plan by Suncor Energy to clean up its tailings ponds so as to take into account new technology the oilsands giant plans to use.
The Alberta Energy Regulator in March denied the Calgary-based company's plan for its Millennium mine. But the regulator said in a letter to a Suncor vice-president this week that it has reviewed the company's request for reconsideration and decided that it would be appropriate in this case.
Tailings ponds contain waste resulting from oilsands extraction and contain water, fine clay particles, residual bitumen and other chemicals. Alberta Energy estimates oilsands mining projects had created about 220 square kilometres of tailings ponds by the end of 2013.
Suncor (TSX:SU) had proposed to treat 75 per cent of its Millennium mine's tailings by clumping fine particles together and covering that material with fresh water.
In its rejection of the plan, the energy regulator called water-capping an unproven method and said more information was needed about its risks, benefits, alternatives and reclamation timelines.
The regulator now says it was not aware at the time of technology Suncor plans to use and it should be considered in an assessment.
The method involves using flocculants and coagulants to separate particles from water and to firm them up before placing them at the bottom of a mined-out pit.
The pit is then filled with fresh water and made into a lake that can support an aquatic ecosystem and recreation. Suncor aims to keep harmful chemicals trapped beneath the lake bottom for good.
"At the time the applications were filed, our evaluation of that process was still in development, so we couldn't describe the process in great detail in terms of how it would work," said company spokeswoman Sneh Seetal.
The regulator said it accepts Suncor's explanation for why it couldn't share details prior to getting a patent.
"The AER would ask that Suncor inform the AER of any such restrictions and potential delays so as to avoid this situation in future," the letter reads.
"Given these unusual circumstances, the AER will reconsider the applications."  
The energy regulator introduced new rules last summer that require companies to have tailings ponds ready to reclaim within 10 years of the end of a mine's life. Those rules replaced more stringent tailings pond regulations put in place in 2009 that the industry said it couldn't meet.
Nina Lothian, a senior analyst at the clean-energy think tank Pembina Institute, said details about Suncor's technology only address a small part of what was lacking in the company's plan.
"It's concerning that the AER reneged on their initial denial based on this one additional piece of information," she said.  
"The issues that were raised on the Suncor plan are actually endemic of all the tailings management plans that have been submitted by industry."
Tim Gray, executive director of Environmental Defence, said oilsands operators are proposing to use water-capping because it's a relatively inexpensive way to deal with tailings.
"You just put more water on top of them and walk away and hope nature fixes it, but of course we don't have any evidence to show that works," he said.
"We're creating this huge future environmental and financial liability for the Alberta and the Canadian taxpayer based on unproven technology."



Lauren Krugel, The Canadian Press
https://era.library.ualberta.ca/files/w0892b23p/Hande_Aharnish_B_201409_MSc.pdf
Accelerated Dewatering and Drying Treatment of Oil Sands Tailings by Electrical Resonant Auto-Transformer by Aharnish Bhojaraj Hande
Canada has world’s third largest oil reserves in the form of oil sands and 20% of those are easily accessible by surface mining. The hot water bitumen extraction process has been used since 1967 and the process produces vast amount of tailings which are stored in ponds. Tailings ponds pose a grave challenge towards sustainable development of Alberta’s mined oil sands. For every barrel of bitumen produced, nearly 15 barrels of tailings including 2 barrels of Mature Fine Tailings (MFT) are generated. Though about 7 barrels of process water is recycled, the rest of the tailings pose complex challenge to faster reclamation. The fine non-settling particles in the tailings are mainly sub-micron size clay particles with repulsive charges. Aggregating these fine suspended particles together holds a key to tailings sedimentation problem.


https://qspace.library.queensu.ca/bitstream/handle/1974/15683/Melnyk_Kirsten_201704_MASC.pdf?sequence=3
DEVELOPING A RECLAMATION COSTING FRAMEWORK FOR THE ATHABASCA OIL SANDS by Kirsten Melnyk A thesis submitted to the Robert M. Buchan Department of Mining Engineering In conformity with the requirements for the degree of Master of Applied Science Queen’s University Kingston, Ontario, Canada (April, 2017)

1.1 Introduction to the Athabasca Oil Sands The Athabasca oil sands are situated in northern Alberta, Canada and contain proven reserves of approximately 168 billion barrels of bitumen. The bitumen in the oil sands is housed within a mixture of thick, tar-like substance consisting of sand, water, and clay. This mixture presents unique processing and reclamation challenges because the bitumen must be separated from the tar-like housing before it can be processed and sold as a usable product. The ore is treated using the Clark Hot Water process, which produces Mature Fine Tailings (MFT) as a byproduct. MFT is a mixture of very fine material and water that can take many years to settle if left untreated. The reclamation of MFT is the most significant reclamation challenge present in the oil sands.
1.2 Problem Definition Any mining operation should have a thorough understanding of the financial requirements it will be faced with upon mine closure. A thorough understanding of future financial requirements allows for better preparation and ensures appropriate use of bonding and other financial instruments in the present. When an operation is adequately prepared for the costs of closure, the local government and other stakeholders are faced with greatly reduced risks. In the Athabasca oil sands, the costs of reclamation are unclear. Although the Alberta Government holds security for each operator, it is generally agreed upon that the security held is not adequate for the requirements of closure. Without knowledge of the closure costs, operators are unable to adequately prepare for closure activities (Brodie, 2013a). These inadequacies put the citizens of Alberta at risk for liability.

2.1 The Athabasca Oil Sands Alberta’s Athabasca oil sands are the third largest proven reserves of oil in the world following Venezuela and Saudi Arabia (Alberta Canada, 2013). The proven reserves contain approximately 168 billion barrels of bitumen and cover 142,200 km2 of land in Northern Alberta. Of this area, only 4800 km2 (3%) is mineable using surface methods while the remaining area is accessible through in-situ extraction (Alberta Government, 2014). The surface mineable areas will be the focus of this thesis due to the differences in associated reclamation challenges between the two mining methodologies.





According to the Alberta Government, reclamation requires that land be returned to a state that has “an equivalent land capability” as the pre-mining land (Province of Alberta, 1993). However, this only requires that land be equally productive; there is no requirement for the land to be returned to the same productive use. Regulation 115/1993 specifies “equivalent land capability means that the ability of the land to support various uses…is similar to the ability that existed prior…but that the individual land uses 8 will not necessarily be identical” (Province of Alberta, 1993). For example, land that was originally used for farming and agricultural use does not need to be returned to agricultural use post-mining. The regulation states that an equivalent land capacity will be “assessed using an evaluation of the physical, chemical, and biological characteristics of the land” (Province of Alberta, 1993). However, productivity of land is not easily quantifiable and could be left open to interpretation.


Tailings ponds represent the largest impact on the landscape as well as the greatest challenge for reclamation in the oil sands. As of December 31st, 2012 mining in the oil sands had affected a total of 89,592 ha (Alberta Government, 2013). While 5,447 ha is permanently reclaimed, only 105 ha is certified reclaimed, meaning that the land meets an equivalent land capability based on long-term monitoring (Alberta Government, 2013). By the end of 2013, land disturbance in the form of tailings ponds accounted for 22,000 ha of the disturbed land and housed a volume of 975.6 Mm3 (Oil Sands Information Portal, 2015b).


Grant and Flanagan have identified a number of potential risks associated with the presence of tailings ponds (Grant & Flanagan, 2013). Firstly, tailings contain a number of hazardous compounds including napthenic acid, cyanide, and a variety of metals. Seepage from tailings ponds may result in the contamination of both groundwater and surface water and the presence of these hazardous compounds increases the potential harm if seepage does occur. Secondly, despite operator prevention efforts, tailings ponds are sometimes mistaken for open water by wildlife (Grant & Flanagan, 2013). Birds that mistake tailings ponds as open water and land in them often perish as a result of their feathers becoming saturated with residual bitumen, preventing flight. Lastly, tailings ponds emit gases such as carbon dioxide and methane, which are known to contribute to climate change (Grant & Flanagan, 2013).

By the end of 2014, mines in Alberta had an estimated $20.8 billion in reclamation liabilities while only $1.57 billion of security was being held for these liabilities (Saher, 2015).



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