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Are Alberta's controversial oilsands finished? Syncrude Canada, operator of the world's largest oilsands mine, says its recent conviction in the so-called duck trial will unleash a deluge of criminal charges from NGOs that could cripple the industry. This concern stems from confusion about how Canadian law treats tailings ponds, but bears little relevance to the real world.
Heard during March and April this year, the trial in St. Albert, Alta., hinged on whether Syncrude took sufficient precautions to prevent birds from landing on its tailings ponds. On April 28, 2008, hordes of ducks and geese touched down on the company's Aurora Settling Basin, about 70 kilometers north of Fort McMurray. Thick mats of bitumen float on its surface, and death awaits any waterfowl becoming trapped in it. An estimated 1,600 birds perished that day.
Alberta charged the company under its Environmental Protection and Enhancement Act, which demands that companies storing hazardous substances must ensure wildlife do not come into contact with them. Environment Canada charged Syncrude for depositing “a substance harmful to migratory birds in waters or an area frequented by birds,” in violation of its Migratory Birds Act.
Each spring oilsands operators deploy a host of scarecrows and propane-powered sound cannons, and by most accounts these manage to dissuade most birds from landing. But Syncrude had few countermeasures in place, which it attributed to a fierce snowstorm a week earlier. “We take a lot of pride in having systems in place,” declared CEO Tom Katinas after the incident.
At trial, Syncrude's snowstorm defence began to resemble a snow job. Evidence revealed the team was ill-staffed and under-equipped. Other Syncrude employees warned the team about bird landings in the weeks before the incident. And competitors deployed their own deterrents before Syncrude's team even showed up for work. Judge Ken Tjosvold found Syncrude guilty on both counts. “Syncrude did not deploy the deterrents early enough and quickly enough,” he wrote.
Given its feeble defence, why didn't Syncrude plead guilty? Spokeswoman Cheryl Robb notes that the company had provincial approvals to operate the Aurora pond. Syncrude would have pleaded guilty to violating the terms of those permits, she says, but not these charges. Robert White, Syncrude's lawyer, called the charges “ruinous to our society.” His reasoning: tailings ponds are crucial to an oilsands mine. Even with deterrents in place, some birds will land and die — so if the provincial and federal laws apply, oilsands operators are guilty every moment of every day. “If these two sections are found to be applicable,” White argued, “either this industry has to break the law hourly or stop.”
Some saw this argument as a red herring. Lawyer Barry Robinson, who launched a private prosecution against Syncrude one month before the Crown laid its charges, deems due diligence a full defence. “If your bird deterrent systems are working, then your tailings ponds aren't frequented by migratory birds,” he says. But others shared Syncrude's interpretation. Shawn Denstedt, a litigation partner for Osler, Hoskin & Harcourt LLP, with considerable oilsands experience, has difficulty understanding why Syncrude needs a due diligence defence for something it has already obtained approval to do. He argues prosecutors should instead have charged Syncrude with violating the terms of its permit. “The reasoning the judge uses is pretty confusing,” he said. “I expect Syncrude will appeal on that basis.”
The Natural Resources Defence Council, and NGO, says the federal conviction makes all tailings ponds illegal and expects no further mining projects will be approved. White fears worse: he said a conviction would enable NGOs to bombard the industry with private prosecutions. But lawyers contacted by Canadian Business doubted that. Denstedt noted that while any citizen can launch a private prosecution, they're difficult to mount and rarely successful. Robinson, whose own private prosecution was supplanted by the Crown's, agreed. “It takes a lot of work just to get to the stage we did,” he says.
But all this ignores a crucial point: Any legal uncertainty will likely be eliminated well before it threatens the industry. Policy-makers in Edmonton and Ottawa remain well disposed to the oilsands; Alberta spent tens of millions of dollars promoting the industry. Infrastructure Minister Ray Danyluk went so far as to contradict Tjosvold's ruling, declaring that the avian mortality “wasn't [Syncrude's] fault, you know, per se.” Energy Minister Ron Liepert accused media and NGOs of overpublicizing the trial.
Other aspects of tailings pond regulation reveal Alberta's warm sentiments toward the industry. The ponds have grown larger than anyone intended: Aurora's surface alone spans 640 football fields, and volumes continue growing as the industry expands. “The industry avoided regulation of tailings for 40 years,” says Simon Dyer, director of oilsands for the Pembina Institute.
Last year, Alberta's Energy and Resources Conservation Board released Directive 074, a set of rules intended to spur their rapid decommissioning. Operators were to submit plans meeting its requirements by last September. But the ERCB recently approved Syncrude's plan, which did not meet Directive 074's targets for the capture of fine particles and trafficability — that is, the ability to walk on reclaimed tailings.
“There are solutions out there, but they involve investing billions of dollars to clean up these tailings more rapidly,” Dyer says. “Unfortunately, the regulator has signalled that regulations are negotiable.” With or without dead ducks floating on them, tailings ponds remain a menace to the industry's reputation — but not its survival.
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