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Oil Sands Have Limited Local Impact on Health, Ecology, RSC Says

By Eduard Gismatullin – Dec 16, 2010 11:37 AM GMT+0000

Canadian oil sand production has limited impact on the local environment and population, while the government needs to increase regulation of the industry to keep up with expansion, an academy of scientists said.

The Royal Society of Canada’s panel of experts couldn’t find “credible evidence” of increasing cancer rates in people living near the oil sands operations in northern Alberta, it said in a statement posted on its website. The industry doesn’t “threaten” the Athabasca River system and the impact on air quality is “minimal,” the RSC said.

At the same time, environmental regulations don’t “appear to have kept pace with the rapid expansion of the oil sands industry over the past decade,” the RSC said in its 414-page study. Improvements in technology haven’t dealt with increasing tailing ponds and greenhouse gas emissions, it said.

Royal Dutch Shell Plc, BP Plc, and Husky Energy Inc. are among companies investing in Alberta oil sands, which contain the biggest crude reserves outside of Saudi Arabia, according to Canadian government estimates. Crude extracted from local bitumen will be the largest single source of U.S. oil imports this year, according to industry consulting group, IHS CERA.

Shell plans to raise its production of heavy crude in the Americas by 60 percent through 2020, the Anglo-Dutch company said in a presentation on Sept. 28. PTT Exploration & Production Pcl, Thailand’s biggest energy explorer, became the latest company to secure an oil sand project in Alberta when it teamed up with Statoil ASA last month.

Statoil, Shell and BP have faced opposition from shareholders because of environmental concerns about the energy- intensive projects to extract oil from the tar-like sands. Dwindling reserves in easier-to-access areas and rising prices are making oil sands developments more attractive to producers.

Total SA, Suncor Energy Inc., Imperial Oil Ltd. and other explorers this month have agreed to “work together in a unified effort to advance tailings management,” Shell said in a statement. The partners plan to complete research next year.

To contact the reporter on this story: Eduard Gismatullin in London at [email protected]

To contact the editor responsible for this story: Will Kennedy at [email protected]

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