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It will cost far less to turn some oil sands into parks than to face development bans brought on by industry critics, Alberta is arguing in its attempt to defend a sweeping new land protection strategy.

The cost of inaction would be "staggering," Mel Knight, the Minister of Sustainable Resource Development, said in an interview Thursday as the provincial government worked to deflect criticism of its plan.

But he indicated that the province is prepared to look at compensating companies for the oil they're being asked to give up.

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The Alberta plan to transform 20 per cent of the oil sands region into conservation and recreation areas has stirred concern that the province could be liable for massive compensation payments to the dozens of companies whose sub-surface rights it intends to cancel.

Only a few of those companies have reported how much oil sands land they will be asked to give up, but the total tally is already well over 100,000 hectares. Much of it is unexplored and some is considered marginal, although one company, Sunshine Oilsands Ltd., has warned that its affected area contains several billion barrels.

In an interview, however, Mr. Knight said the province was compelled to act by the possibility of far more land being affected.

"We have a major issue," he said. "There are five petitions in the federal courts right now to put moratoriums on any further development, period, until we figure out what we're going to do with, number one, the caribou recovery and stabilization and secondly, the critical habitat areas for these animals."

The province and industry, he said, ran the risk of being unable to "manage and maintain a social licence" without action. If that happened, the cost "would be staggering compared to what may or may not be the cost of what we're doing," he said.

The acknowledgment that the province is sacrificing some oil sands to buy peace is an indication of how seriously Alberta is now taking actions by critics, who have targeted the oil sands industry's record on energy use, water and bio-diversity.

Many of those critics have said the plan to protect 20 per cent of the Lower Athabasca - a region that includes the oil sands but also land that contains no bitumen - is inadequate. Indeed, some have suggested the province could conserve 40 per cent of the region and still produce eight million barrels per day, more than five times its current output.

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Even the more modest Alberta plan, however, is likely to create conflict between government and industry over the issue of compensation. Mr. Knight has said the province will pay back land lease and development fees. Companies want compensation for the value of the oil they're being asked to give up.

On Thursday, Mr. Knight suggested those demands will be considered - although the province has yet to say how much that could be.

"The discussion will be on what would be or what could be the amount of revenue that you may or may not have gotten out of it in the future," he said. "That of course requires negotiation."

The province is also looking at other ways to accommodate those losing land. Mr. Knight, referring to Sunshine, said it's possible "corridors" could be used in the conserved land so that "we could use and access the resource."

But he said he believes the plan affects only a small part of the 173-billion barrels of oil sands currently considered recoverable.

"You want a wild-assed guess of how much have we locked up?" he said. "Probably somewhere in the neighbourhood of 0.02 per cent."

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