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Shell accused of lowballing environmental impact of oilsands expansion

By: The Canadian Press 12/5/2011 12:41 PM

A haul truck carryong a full load drives away from a mining shovel at the Shell Albian Sands oilsands mine near Fort McMurray, Alta., Wednesday, July 9, 2008. THE CANADIAN PRESS/Jeff McIntosh

EDMONTON – Newly filed documents say Shell Canada’s environmental study of its proposed oilsands expansion should be rejected because it is woefully out of date and lowballs probable industrial development by a factor of 12.

A report to the Canadian Environmental Assessment Agency by the Oilsands Environmental Coalition points out that Shell’s (NYSE:RDS) look at the cumulative effects of development in the region doesn’t include anything proposed since 2007.

Since then, says the report, there have been 11 new projects proposed within the study area and more than a billion dollars has been spent acquiring oilsands leases.

“It strains credulity that more than $1 billion in lease sales … will result in no reasonably foreseeable development of any kind,” says the document.

The report, derived from industry and government figures, also accuses Shell of ignoring the extent of forestry as well as recent forest fires that have swept through the region.

While Shell maintains that only five per cent of the area around the Jackpine expansion is likely to be affected by development, the coalition maintains the real figure will be closer to 60 per cent.

The discrepancy between overall industry plans and what individual companies list in regulatory filings threatens the ability of the public to make good decisions about the oilsands at a time when they are under increased scrutiny around the globe, Simon Dyer of the environmental think-tank Pembina Institute said Monday.

“It’s pretty black and white that this is not a credible assessment,” said Dyer, whose group is part of the coalition that wrote the report.

Shell’s manager of regulatory approvals said the company will review the coalition’s document.

“The regulatory review process for this project has taken four years and in this intervening period oilsands development has continued to grow,” Donald Crowe said in an email.

“This assessment included all planned developments as defined by Alberta Environment at the time of filing and included the effects of forest harvest and fires.”

Crowe said Alberta Environment determined the assessment to be complete in 2010.

Companies are required to look at how much development is “reasonably foreseeable” in a region where they want to work and how their proposal would add to the overall load on the environment.

That study goes to a federal-provincial review panel, which uses it to help decide if a project should go ahead. The panel for Shell’s Jackpine project is expected to announce hearing dates early in the new year.

Shell filed its cumulative environmental effects assessment for the expansion, which would produce 100,000 barrels a day, in 2007. An assessment of socio-economic effects was updated the following year but environmental impact was not.

The coalition used government documents and public announcements to pinpoint seven projects that have begun the regulatory process since 2007 and another four that have been publicly announced. As well, regulatory papers show that 3,137 exploration wells have been drilled in the region in the last four years, none of which is considered in Shell’s assessment.

Dyer said that while governments trumpet the continuing growth in oilsands production, regulators aren’t considering the cumulative impact.

“There’s a really big disconnect within governments between those departments responsible for economic development and those required for environmental protection,” he said. “It only makes sense that the economic projections should be the same as the environmental projections to make intelligent decisions.”

Richard Dixon, director of the University of Alberta’s Centre for Applied Business Research in Energy and the Environment, said French energy giant Total was caught with a similar gap during hearings for its Joslyn project. That panel required Total to file extensive additional information on cumulative impacts.

The panel at Shell’s hearing may well do something similar, he suggested.

“They’re not going to shovel that under the carpet. If Shell has missed (something) and Pembina caught it, good for Pembina.”

Dixon said credible cumulative impact studies are closely linked to oilsands environmental monitoring Alberta is developing with the federal government. Both are needed to make good decisions, he said.

“You compare (cumulative effects) with what you’ve got for good monitoring and say, ‘OK, here’s where the threshold is and here’s where this is bumping up and…now we have to rethink this.’

“And those days are coming.”

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