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ERCB approves Shell’s Muskeg River tailings plan, gives leeway on timelines

From Lauren Krugel, The Canadian Press, September 20, 2010 – 7:28 p.m.

CALGARY – Alberta’s energy watchdog has given Shell Canada some leeway in approving the company’s plans to deal with waste from its Muskeg River oilsands mine.

The Energy Resources Conservation Board acknowledges a consolidated tailings plant Shell plans to build will not be up and running until 2012.

“Until the new tailings plant is operational, Shell will not be able to achieve the ERCB’s annual fine tailings reduction requirements,” the board said.

However, from 2013 onwards, the ERCB has directed Shell to exceed the annual fine tailings reduction requirements in order to achieve a cumulative overall fine tailings reduction that is equal to or exceeds requirements by no later than the end of 2017.

Last year, the ERCB issued Directive 74, which ordered oilsands miners to clean up their tailings ponds, and submit plans outlining how they intend to achieve that.

The ERCB approved plans from Syncrude Canada Ltd. (TSX:COS, TSX:NXY) and Imperial Oil Ltd. (TSX:IMO) with similar caveats to Shells. It also conditionally approved a plan by the Fort Hills partnership (TSX:TCK.B).

A tailings plan submitted by Suncor Energy Inc. (TSX:SU) was the only one to fully meet Directive 74.

Shell welcomed the decision and said it would review the conditions attached to the approval.

“It remains Shell’s intent to meet the requirements of D74 and company officials will be working closely with the ERCB in responding to the conditions attached to the approval,” company spokesman Ed Greenberg said.

Environmentalists have criticized the ERCB for approving plans that don’t meet its own guidelines.

The ERCB is still weighing another submission from Shell for its Jackpine mine, as well as one from Canadian Natural Resources Ltd. (TSX:CNQ) for its Horizon project.

Tailings — a mixture of sand, clay, water and residual bitumen — are a byproduct of the oilsands extraction process and have drawn a great deal of concern for their environmental impacts. Two years ago, 1,600 birds died after landing on an enormous tailings pond at Syncrude Canada Ltd.’s mining site.

Alberta’s energy regulator estimates tailings ponds today contain about 840 million cubic metres of fluid and cover about 170 square kilometres across northern Alberta.

Left to their own devices, fine clay particles in tailings ponds can take decades to settle, but companies are working on ways to drastically speed up that process.

Shell has begun a commercial demonstration of a technology called atmospheric fine drying that uses a thickening agent which is added to the tailings. After that, they are laid out to dry on a slope, and the remaining water is recycled back into its operations.

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