Canada's largest oil sands companies are banding together to tackle one of the industry's most vexing challenges - the cleanup of their giant ponds of toxic mine effluent.
Companies with oil sands mining operations have struck a deal that will see them collaborate on ways to clean up tailings, a problem that has drawn billions of dollars of industry research spending.
The deal is a remarkable step for companies that are throwing aside competitive concerns in favour of a co-operative approach to both fix a problem and present a better image.
The oil sands industry - labelled "dirty oil " by detractors - is under increasing pressure to convince the world that it is working to clean up its mess. Joining forces, companies hope, will allow for a more rapid adoption of technological solutions that both lighten their environmental footprint and possibly boost future profits. Rather than attempt to sell or license their intellectual property, oil sands companies will exchange know-how.
"We're all working together, and I think that's a real plus," Steve Laut, the president of Canadian Natural Resources Ltd., said in an interview.
Tailings are a byproduct of bitumen extraction that accumulate in huge unsightly bodies of water laced with oil and heavy metals. For an industry that is awash in image issues - from its substantial carbon footprint to claims that it is hurting the health of people and animals - tailings are arguably its worst problem.
Ponds containing the effluent now cover 170 square kilometres of the northeastern Alberta landscape, an area 50 per cent larger than the city of Vancouver. Their presence is both an eyesore and a serious environmental issue. The thousands of ducks that died in the Fort McMurray area in recent years perished in tailings ponds, creating both fines for companies like Syncrude Canada Ltd. and major public relations issues for the industry as a whole.
The Alberta government has set in place new rules that order tailings cleaned up faster, but companies have struggled to do so. Only Suncor Energy Inc. has put forward a plan that complied with the specific timelines in the new rules. Collaboration may allow the rest of industry to more rapidly adopt proven new techniques.
The industry is expected to announce the co-operative approach later this month, though the legal framework for the deal may still need to be finalized. The strategy shift is a dramatic change for companies that are loath to give up the secrets to their hard-won successes.
Suncor chief executive officer Rick George, for example, had made it clear he saw marketable value in "Tailings Reduction Operations," the technology his company developed to speed effluent cleanup.
"We want to help recoup our R&D costs. That's a reasonable request," he said in September. Royal Dutch Shell PLC, on the other hand, has offered to freely distribute its tailings research.
The collaboration deal may, however, see companies get back at least some of their research dollars. It is structured so that "you contribute all your information that you have," Mr. Laut said. "That information is valued, and then we just equalize out based on that."
Some, however, say the industry needs to do far more than collaborate if it is to decrease the volume of its tailings. With Imperial Oil Ltd.'s Kearl mine under construction, and other mines contemplated by Total SA and Suncor, tailings will likely grow unless the technology can be sorted out first, Sierra Club director John Bennett said.
"Maybe they should stop building new ones until they're perfected the tailings technology, and until Canada and the U.S. have a plan to control greenhouse gas emissions," he said.
The most difficult issue for the industry has been the cleanup of so-called "mature fine tailings," which are a thick muddy slurry that contains water mixed with fine clays and silts. Left alone, those clays and silts could take hundreds of years to fall out of the water - and until recently, companies' inability to clean them up has been one reason for the growth in tailings ponds. Suncor's new technology, however, uses polymers and large sloping drying beds to separate the water from the particles in weeks rather than centuries. Other companies have pursued similar techniques, with varying levels of success. A Suncor spokesman confirmed Monday that the company is involved in the talks, and sharing of its system could be an important component of the deal.
Other companies declined to discuss the deal in detail before it is officially made public.
"There are discussions going on with a view to concluding an agreement to collaborate on tailings research," Imperial spokesman Pius Rolheiser said. The discussions include Imperial, he confirmed.
A spokeswoman for Syncrude would only say the industry has worked collaboratively on oil sands issues in the past.
According to Shell spokesman Ed Greenberg, "the tailings challenge is a serious issue that the industry has identified as one that needs close attention. Shell has been very open on the fact that collaboration is needed."
Despite the hurdles, Sierra Club's Mr. Bennett called the deal "a very positive development," and others praised the direction the industry is taking.
"The sharing of knowledge is required by industry to address the urgent environmental issues in the oil sands," said Jennifer Grant, oil sands program director for the Pembina Institute, a frequent industry critic.Report Typo/Error