ed fedpolicy report oct2010 web redo

8/2/2019 Ed Fedpolicy Report Oct2010 Web Redo

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Dut Cs:Feder resposiiit i Cds oi sds


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Dut Cs: Feder Resposiiit i Cds Oi Sds

October 2010 2010 Environmental Deence, The Pembina Institute and EquiterreISBN 1-897390-27-0

Aussi disponible en ranais

Eiroet Defece is Canadas most eective environmental actionorganization. We challenge, and inspire change in government, business andpeople to ensure a greener, healthier and prosperous lie or all. Learn more atEnvironmentalDeence.ca.

QUITERRE helps build a social movement by encouraging individuals,organizations and governments to make ecological and equitable choices, in a

spirit o solidarity. Learn more at Equiterre.org.

Te Pei Istitute advances sustainable energy solutions through innovativeresearch, education, consulting and advocacy. Learn more at Pembina.org


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To be frank on te oil sands, weve got to do a better job environmentally. We ear a lotof pressure on tat.

Prime Minister Stephen Harper

Were operating tis ting like it was te Klondike, and its not te Klondike. Were going to

be tere for a century or more. We need to be able to stand up for te oil sands and ask teoil industry to do better. Tese communities need to become environmentally sustainable,but tey also need to become socially sustainable.

Hon. Michael Ignatie, Leader o the Ocial Opposition2

We ave called for a alt to any new approvals of tar sands development until teres a planin place to address te concerns and ealt consequences for te people of not only FortCip but rigt across te nort.Oterwise wat are te next generations of Canadiansgoing to ask us? Teyre going to say wo was in carge wen tis mess was created? Wowas demonstrating so called strong leadersip wen te nort was poisoned? And I believeits time for te kind of leadersip tat says were not going to allow tat to appen.

Hon. Jack Layton, Leader o the New Democratic Party3

If tey want to produce tat kind of oil, te players ave to pay te consequences of teirown production.Wat were basically saying is tat we sould put an end to preferentialtreatment of oil companies.

Hon. Gilles Duceppe, Leader o the Bloc Qubcois4

IntroductIon

Canada has no choice other than to address the growing impacts o the oil sands industry. Pollutionrom the industry is rising, the landscape is being damaged by unettered development, and there areplans to double production over the next ew years, which will only increase the damage. Furthermore,the oil sands are preventing Canada rom transitioning to a clean energy economy and tackling globalwarming. Ottawa has so ar ailed to live up to its duties to enorce existing ederal environmental lawsin the oil sands and to chart a sustainable uture or Canada. The resulting mismanagement and growingcontroversy leaves Canada no choice other than to address the growing impacts o the oil sands.

Countries around the world are making signicant investments to retool their economies or the newindustrial revolution the shit to clean, renewable energy and the phase-out o polluting ossil uels.Dwindling global oil supply, rising oil prices, concerns about energy security and eorts to combatglobal warming are driving the international clean energy boom. In act, i the world wants to containclimate change to less than two degrees Celsius o warming to reduce the risks o catastrophic impacts,

developed countries like Canada will need to virtually eliminate emissions rom ossil uels rom theireconomies by 2050.

In this context, exploiting the oil sands bringing to market ossil uels with an even higher carbon5impact than those we are already using is a step in the wrong direction i we are to transition to cleanenergy. There is also growing awareness o the water and air pollution, habitat loss and impacts on FirstNations o oil sands production. This has led to a growing international controversy over the oil sands,


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and is hurting Canadas reputation abroad.Investors and consumers are now seeing therisk associated with oil sands, and are calling onCanada to address the environmental impacts.

Furthermore, the role o the oil sands within the

national climate and energy debate has becomea source o inter-provincial riction as concernsmount over the impact o rising oil sandsemissions on other provinces, and some regionsexperience manuacturing job loss stemmingrom the way oil exports are driving up theCanadian dollar.

While Environment Minister Jim Prentice recentlysignalled that the ederal government may re-engage in the oil sands when he appointed apanel o science experts to review water pollutionmonitoring in the Athabasca River, to date the

ederal government has been largely absent indealing with the environmental management oCanadas oil sands. Despite occasional toughtalk and vague statements about the need orimprovements, the ederal government has ailedto meets its responsibility to enorce existingederal laws and to ollow through on promisesor new ones. Instead o xing the problemsthrough eective regulations to managecumulative environmental eects, the ederalgovernment has been lobbying governments inthe U.S. and the E.U. in an attempt to shield theindustry rom environmental measures elsewhere.

Yet, by allowing the oil sands problems togrow in the absence o clear limits to protectthe environment, the ederal government isinstead setting up the industry or even greatercontroversy and risk in the uture.

CanaDa haS lOST aPPROxImaTEly 66,000 nEwjObS OvER ThE laST TwO yEaRS ThaT wOUlDhavE bEEn CREaTED IF wE wERE InvESTIng InThE REnEwablE ECOnOmy aT ThE SamE lEvEl

(PER PERSOn) aS ThE U.S.


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Federal dutIes In the oIl sands

The ederal government has both the authority to implement policies to minimize environmental harm,and a legal obligation to do so under several ederal laws. For example:

Fiseries Act: The ederal Fii a deals with the management o Canadas sheries resources and theconservation and protection o sh and sh habitat. It applies to all Canadian sheries waters, including privateproperty and provincial Crown lands. It gives the ederal government the power and authority to protect theunobstructed passage o sh, provide sucient water fow or sh, prevent sh mortality and prohibit harmulalteration, disruption or destruction o sh habitat.6

Canadian Environmental Protection Act (CEPA):CEPA aims to prevent pollution and protect the environmentand human health. It gives the ederal government the authority to prevent and manage the risks posedby harmul substances, and to assess the environmental and human health impacts o new and existingsubstances.7 The ederal government has the responsibility, thereore, to assess the toxicity o chemicalsproduced by oil sands extraction, and to develop measures to control their release.

Species at Risk Act (SARA): The purpose o SARA is to prevent Canadian species rom becoming

extirpated or extinct, to provide or the recovery o endangered or threatened species and prevent otherspecies rom becoming at risk. It provides the ederal government with the authority to identiy speciesat risk and their critical habitat, and creates a saety net provision or the ederal government to step into protect a species i a province is ailing to do so.

Canadian Environmental Assessment Act (CEAA):The need or ederal environmental assessments ornew oil sands projects is triggered by the impact o oil sands activities on sh and sh habitat. Theseenvironmental assessments have taken the orm o Joint Panel Reviews with representatives o theederal government and the Alberta government.

Migratory Birds Convention Act (MBCA): The MBCA prohibits the release o substances that can harmmigratory birds in waters used by them, and gives the ederal government the authority to developregulations to protect migratory birds. The responsibility o the ederal government or migratory birds

was recently demonstrated in the prosecution o Syncrude Canada under the MBCA by Canada or thedeath o 1,600 ducks in a tailings lake.

The ederal government is responsible or signing and implementing international treaties such as theMigratory Birds Convention, the Convention on Long Range Transboundary Air Pollution and the KyotoProtocol. Furthermore, the ederal government is responsible or monetary policy and the value o ourcurrency, which has become increasingly linked to the price o oil as oil sands exports have grown.

The ederal government also has duciary duties to respect Aboriginal and treaty rights as outlined in anupcoming section.


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4

catch up, canada:

the transItIon FroM oIl sands to clean energy

Alongside other G8 countries, Canada has endorsed the goal o staying within two degrees o global

warming relative to the pre-industrial level to avoid catastrophic climate change impacts. To have achance o achieving this goal, global greenhouse gas emissions will need to be cut by 50 per cent romthe 1990 level by 2050, and emissions rom industrialized countries will need to be cut by at least 80 percent rom 1990 levels by 2050.8 The most recent science suggests that emissions should be cut evenmore quickly to avoid serious risks o catastrophic climate change.

For Canada to achieve this level o reduction, the total carbon budget or the country would have to belimited to 118 million tonnes o carbon dioxide equivalent (CO

2e) in 20509. To put this in perspective,

this budget is about the same as national emissions rom just agriculture and residential heating in2008, which together accounted or 114 million tonnes o greenhouse gases.10 By 2050, our energy andtransportation systems will need to be virtually carbon-ree.

Other countries recognize the implications o carbon constraints and the economic growth opportunity

that they present, and are investing heavily in the transition to the clean energy economy. For example,Denmark a cold northern country like Canada is planning to eliminate ossil uel use by investingheavily in public transportation and building the inrastructure and incentives needed or electricvehicles.11 Clean energy investment in China reached US$34.6 billion in 2009, more than in any othercountry, and Chinas government is planning to increase that to US$75 billion per year in the comingyears.12

Meanwhile, Canada is alling behind other countries in clean energy investment, and Canadians riskmissing out on the job opportunities being created in what will soon be one o the largest industrialsectors worldwide. The Obama Administration plans to invest 18 times more per person this year inrenewable energy than the Government o Canada,13 and Canada has lost approximately 66,000 new

jobs over the last two years that would have been created i we were investing at the same level (perperson) as the U.S.14

Canada needs to catch up in the clean energy economy and join other countries in the transition awayrom ossil uels. In the interim, Ottawa has a legislative responsibility to mitigate the most signicantimpacts o the oil sands industry by implementing the ollowing recommendations.

Fiure 1. Oi sdsepsio psThe current production capacityin the oil sands is 1.79 millionbarrels per day. Projects thathave already been approved

will increase production tonearly 4 million barrels a day.I all projects that are currentlyseeking approval or have beenannounced by oil companiesproceed, production will morethan quadruple todays levels.59

Source: Strategy West Inc.Existing and Proposed CanadianCommercial Oil Sands Projects.September 2010.


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lIve up to the FIducIary duty to aborIgInal peoples

Section 35 o Canadas Constitution Actrecognizes and protects Aboriginal and treaty rights. The Crown has alegal duty to consult and accommodate Aboriginal peoples (in Alberta, this means First Nations and Mtis) whencontemplating activities that might adversely impact Section 35 rights as armed by the Supreme Court oCanada in the hi, t ri andMii cdecisions.15The oil sands industry impacts land, wildlie andwater, meaning that Aboriginal livelihoods and treaty rights are being aected.

Although the Crowns responsibilities are shared, the ederal government has largely relied on theProvince o Alberta to undertake the Crowns duty to consult Aboriginal peoples. Yet, the provincialgovernment is ailing to ulll these obligations,16 as Albertas policies currently:

Ensure consultation appens too late: The courts have ruled that Aboriginal peoples need to be consultedearly in the strategic decisionmaking regarding land use, at a point when the discussion is about tocarry out an activity, not how to carry out an activity that has already been decided on. In Alberta, Aboriginalpeoples are not consulted at this stage mineral licences are handed out prior to the involvement o Aboriginalpeoples, thus limiting the ability to accommodate concerns.

Delegate primary responsibility to industry:Alberta delegates signicant responsibility orconsultation with Aboriginal peoples to industry, and has established several multi-stakeholder bodiesthat provide some orm o consultation with Aboriginal peoples and the public. The province, as aresult, tries to play the role o neutral arbiter between industry and Aboriginal peoples, rather thanullling its constitutional obligation to protect Aboriginal and treaty rights. Furthermore, participation byAboriginal peoples in multi-stakeholder bodies does not substitute the need or direct consultation andaccommodation with them.

Fail to meet Aboriginal expectations: Alberta has established a Fi ni ci pi toguide the governments consultation with First Nations when they do take place. The policy, however, has beenrejected by all three treaty organizations representing Albertas First Nations because it was adopted withoutconsultation or consent o the aected First Nations.

The ailure o the province to adequately discharge their duty to consult does not diminish theresponsibility o the ederal government to maintain the honour o the Crown. Both governments areobligated to ulll the duty to consult and accommodate Aboriginal peoples regarding whether and howthey conduct activity in the oil sands. As a result o the Crowns ailure to consult, several First Nationscommunities are now legally challenging oil sands projects, and until the situation is xed, the industryremains vulnerable to urther legal challenges.

It is essential that Aboriginal peoples are involved in the design o the consultation process. Thereore,it is not appropriate or others including environmental groups to suggest what governments must todo to meet their obligations to Aboriginal peoples, because that can only be determined through directdiscussions between ederal and provincial governments and Aboriginal peoples.

In summary, there is a large gap between the Crowns constitutional obligation to respect Aboriginal

and treaty rights and the reality o how decisionmaking is proceeding in the oil sands region. Both theederal and provincial governments are legally obligated to remedy this situation.

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RECOmmEnDaTIOnS

Free, Prior d Ifored Coset:17Both the ederal and provincial governments must ensurethat development in the oil sands region is consistent with the constitutionally protected rights oAboriginal peoples and the internationally accepted doctrine o ree, prior, and inormed consent.Consultation policies need to be designed in partnership with Aboriginal peoples, instead o imposed by

governments.

het d oitori: To help address immediate concerns, the ederal government must ensurethat aected Aboriginal communities have the resources to direct their own baseline health studiesand environmental monitoring programs. Both the ederal and provincial governments are accountableto communities or the conservation and protection o the environment, community health, and theproductive capacity o their lands and resources.

F ExPanSIOn OF ThE OIl SanDS PROCEEDS aS PlannED, ThE InDUSTRy wIll OUTSPEnD ITS PROPORTIOnal ShaRE OFCanaDaS CaRbOn bUDgET by 3.5 TImES by 2020 anD by nEaRly 40 TImES In 2050.


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reconcIle oIl sands developMent wIth canadascarbon budget

Oil sands operations are a major and growing source o greenhouse gas (GHG) pollution. In 2008, oilsands plants and upgraders were already producing 37 million tonnes o emissions per year,18 which

alone accounted or ve per cent o Canadas total emissions. In act, oil sands are the astest growingsource o GHG emissions in the country.19 Projections or growth made beore the economic recessionindicate that oil sands emissions could nearly triple between 2008 and 202020 to 108 million tonnes oCO

2e per year and would account or over 40 per cent o Canadas increase in emissions.21

In January 2010, the ederal government committed to reduce Canadas GHG emissions to 17 per centbelow 2005 levels by 2020. The ederal government has also endorsed the goal to limit warming to twodegrees above pre-industrial levels through the G8 and the Copenhagen Accord. According to the bestavailable science, this will require industrialized countries like Canada to reduce their emissions by atleast 80 per cent below 1990 levels by 2050.22 This would mean that Canadas total carbon budget willbe roughly 607 million tonnes in 2020 and 118 million tonnes in 2050.23 Canadas 2020 goal is ar weakerthan what the best available science shows would be our air contribution to emissions reduction.

The most eective approach or Canada to do its share to ght global warming would be to legislatescience-based targets to reduce Canadas total GHG emissions, and to implement a comprehensiveplan to meet those targets. An economy-wide price on carbon would be the centerpiece o that plan,supported by complementary regulations and investments.

Instead o adopting this approach, the ederal government has signalled that it will regulate emissions bysector,24 and has recently proposed to implement regulations on emissions rom coal-red electricity thatwould take eect starting in 2015.

A sector-by-sector approach to regulating carbon emissions means that the ederal government needsto develop regulations that require all sectors including the oil sands industry to do their air share inreducing global warming pollution to live within our national carbon budget, the level emissions needto be at to reach the governments commitments. I the oil sands sector is not required to deliver its

proportional share o reductions, other sectors will have to shoulder a greater burden. I the oil sandsassume their proportional share o reaching the governments commitments,25 this would translate intoabsolute limits on emissions rom the oil sands by 2020 and 2050 as shown below.26

Fiure 2: Oi sds ghgs proportio to feder coitet

.


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8

Unortunately, the scope o oil sands expansion that has already been planned and approved can onlymean that other sectors o the Canadian economy must do more than their proportional share to reduceemissions. Even i carbon capture and storage (CCS) is actually able to reduce emissions substantially inthe oil sands (a claim that is still ar rom certain), current oil sands expansion plans would still exceed theoil sands emissions budget i the sector does its share to meet the governments commitments. Even themost optimistic estimates by industry experts indicate that by 2020, CCS may reduce oil sands emissions

by 1030 per cent below business as usual, and by 2050, 3050 per cent below business as usual.27

As the graph below shows, this would still mean that the oil sands industry will exceed a proportionalshare o Canadas carbon budget by 3.5 times in 2020, and by nearly 40 times in 2050 i expansionproceeds as planned. Oil sands production would thereore need to peak at or near current levels i thesector is to do its proportional share.

Fiure 3. Oi sds ghg eissios it CCS

Source: WWF UK and the Cooperative Bank, Carbon Capture and Storage in the Alberta Oil Sands: A Dangerous Myth (2009).

RECOmmEnDaTIOnS

Reute te oi sds ghg eissios: Ideally the ederal government would set an economy-wide price on carbon. I it takes a sector-by-sector regulatory approach instead, regulations need to beimplemented that require absolute emissions reductions rom the oil sands sector. These regulationsneed to put a limit on emissions that is consistent with reaching the ederal governments nationalemissions commitments or 2020 and 2050.

Set sciece-sed iit or udet for tio eissios: Legislate science-based limits toreduce Canadas total GHG emissions that are based on the best available science and a air contributionby Canada to the global eort to tackle climate change. Legislation that sets science-based limits onemissions should also establish independent, transparent oversight o government action to ensurecompliance.

Producton(millionbarrelsperday)

Emissions without CCS

Emissions with CCS (pessimisc

projecon)

Emissions with CCS (opmisc

projecon)

Allowable oil sands emissions

(proporonal share)

Oil sands producon


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Put price o cro: As the centrepiece o a plan to meet legislated GHG reductions, implementa national, economy-wide cap-and-trade system or emissions levy. The price on carbon needs to be setto reach the legislated limit or national emissions, go into eect as soon as possible and be air or allsectors and regions.

mdte CCS: Adopt regulations to require all new oil sands acilities that begin operations in 2010 or

later to implement ull-scale carbon capture and storage (CCS) by 2015.

by 2050, OUR EnERgy anD TRanSPORTaTIOn SySTEmS wIll nEED TO bE vIRTUally CaRbOn-FREE.


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0

enForce the FIShERIES ACT

Oil sands extraction processes have a number o impacts on water. Clearing orests and wetlands ormine pits, roads, well sites and pipelines destroys habitat and harms the ecosystems ability to store,recharge and lter water. In act, reshwater use has been identied as one o the top our key challengesor mining operations.28 Typical extraction and upgrading processes consume two to our barrels o water

to produce one barrel o bitumen.29

The majority o the water used or oil sands mining is drawn rom the Athabasca River30 and currentoperations are licensed to divert up to 652 million cubic metres o water each year rom the AthabascaRiver and surrounding area.31 These large volumes o water withdrawals are a signicant risk to the healtho the rivers ecosystems. Fish populations are considered to be the most vulnerable component o theaquatic ecosystem, particularly during the winter low fows, when water withdrawals could signicantlyreduce the availability o habitat or those species that overwinter in the Athabasca River.32 With the rapidpace o growth in the oil sands industry, water use will increase signicantly. According to awarded waterlicenses, the current and proposed projects could withdraw more than 15 per cent o the AthabascaRivers water fow during its lowest fow periods.33

Compounding the issue o water supply is climate change, where the Athabasca Rivers annual fows

have declined by 29.5 per cent rom 1958-2008.34

Declines in supply o reshwater combined with rapidexpansion o oil sands production pose a serious risk to water supply and environmental health.

Oil sands mining operations return almost none o the water they use to the natural cycle, and thewastewater that is not recycled is stored in tailings lakes.35 This accumulation o tailings is a largevolume o toxic36 materials that contain contaminants including naphthenic acids, polycyclic aromatichydrocarbons, phenolic compounds, ammonia, mercury and other trace metals.37 To date, there is nosae disposal plan or the tailings, which means that water quality could be negatively aected as suracewater and groundwater passes over and through the tailings lakes. Furthermore, there are over $15billion in unaccounted reclamation liabilities created by oil sands mining and tailings lakes, that are notcovered under current Alberta government reclamation security programs. This leaves taxpayers with asignicant risk o ooting the clean up bill, i a mine is unable to pay or reclamation.38

New evidence that the oil sands industry is causing pollution in the Athabasca River has come to lightrecently. A pair o independent studies by internationally-renowned water expert Dr. David Schindlerand Dr. Erin Kelly ound both elevated levels o polycyclic aromatic compounds and heavy metalsimmediately downriver o oil sands operations.39 The same studies brought into question ocialestimates o pollution levels rom the industry, and the industry-unded monitoring body that ailed todetect the pollution.

RECOmmEnDaTIOnS

Eiite ter d ir poutio discre fro tiis pods 2020:The ederalgovernment can regulate pollution discharge rom the tailings ponds through Section 36(3) o the

Fiseries Actand by identiying substances associated with tailings ponds as toxic under the CanadianEnvironmental Protection Act (CEPA). This authority can be used to develop new regulations or the oilsands under the Fiseries Actand management plans to deal with the toxic substances under CEPA.These measures should require the elimination o discharge o air and water pollution rom tailingsponds by 2020 eectively phasing out tailings ponds and include requirements to eliminate thedischarge rom existing tailings ponds (see air pollution section below). This would also help to addressthe ederal governments responsibility to protect migratory birds under the Migratory Birds ConventionAct.

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Set eforcee iits o ter poutio:Develop and implement science based, precautionarywater quality standards or substances that may enter water (on the surace and underground) as aresult o oil sands development.

Set iits o ter itdrs: Require existing holders oFiseries Actwater licenses to complywith an ecosystem base fow, which would set an absolute cuto point or water withdrawls rom the

Athabasca River when sheries are threatened due to low fows.

moitor ter quit d qutic ecosstes: Working with the governments o Alberta,Saskatchewan and the Northwest Territories, and with First Nations and Mtis communities, toimplement a comprehensive, scientically rigorous water quality monitoring program or the AthabascaRiver watershed that is independent (arms length rom industry), regularly peer-reviewed, transparentand responsible or providing public reports.

Deeop feder eerec respose p: Strengthen the Mackenzie River BasinTransboundary Waters Master Agreement to require a ederal emergency response plan in the case o aailure o a tailings lake dyke.

Copete copreesie et stud: Conduct a comprehensive health study o the impacts

o oil sands development on surrounding communities, and identiy and implement measures to reduceany health impacts identied by that study.

It is time to stop talking and

assert federal powers.Given

widening concerns about te

environmental and climate

impacts of te oil sands and

broader fossil fuels sector,continued government inaction

could also place te future of

oil sands bitumen exports at

risk.

New Democrat report of the

StaNDiNg committee review of the

impactS of oil SaNDS DevelopmeNtS

oN water reSourceS40

Te federal government

does not fully exercise its

responsibility to monitor

water quality in te oil sands

(and downstream) or enforce

te relevant provisions of teFiseries Act wit respect

to industry impacts on fis-

bearing waters. Ottawa appears

to ave de facto devolved

and diluted tis constitutional

responsibility.

liberal report from the StuDy

of the StaNDiNg committee oN

eNviroNmeNt aND SuStaiNableDevelopmeNt oN the impact of oil

SaNDS DevelopmeNt oN caNaDaS

freShwater41


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enForce the specIes at rIsk act

Oil sands development impacts and in some cases destroys wildlie habitat through theconstruction and use o open-pit mines, toxic tailings lakes, upgraders and reneries, seismic linesassociated with in situ development, roads, and pipelines. Waterowl and songbirds come rom all overthe Americas to nest in the Boreal and each year between 22 million and 170 million birds breed in

the 14 million hectares o Boreal orest that is underlain by oil sands.42

The rapidly expanding oil sandsoperations increasingly place these birds at risk.

The tailings lakes associated with oil sands mining operations have received signicant public attention,ollowing the death o over 1,600 ducks who landed in tailings in one incident in 2008.43 Data roma recently released Freedom of Information and Protection of Privacyrequest showed several otherincidences o animal deaths, including 27 black bears, 67 deer, 31 red oxes and 21 coyotes over aneight year period.44

In situ oil sands development which does not involve large open pit mines or the creation o tailingslakes poses an even greater risk to Boreal ecosystems than oil sands mining. The network o seismiclines, roads, pipelines, power lines, well pads and acilities associated with in situ oil sands developmentcontribute to direct habitat loss and the ragmentation o large expanses o land. The orest area leased

or in situ oil sands development already covers 79,000 square kilometres.45

Given the substantial areathat may be aected and the current lack o a regional landscape plan or in situ development, therecould be signicant long-term impacts to wildlie populations even i reclamation is successul.

The woodland caribou is a threatened species in Canada and Alberta. A 2008 review o the scienticliterature by Environment Canada concluded that all woodland caribou herds in Alberta are consideredto have non-sel-sustaining populations.46 Industrial development within caribou ranges is largelyresponsible or these declines. 47 To date, in situ oil sands development occurs within the ranges o anumber o herds in northern Alberta, and the plans to expand oil sands development poses a seriousthreat to an already imperiled caribou herd.48 Local First Nations (Beaver Lake Cree Nation, Enoch CreeNation, Chipewyan Prairie Dene First Nation and Athabasca Chipewyan First Nation) and environmentalorganizations have called on the ederal Environment Minister to provide emergency protection orcaribou herds threatened by oil sands development.49

RECOmmEnDaTIOnS

Protect species t ris: Eectively implement the Species at Risk Actto ensure that those speciesthreatened by oil sands development are protected, and work with Alberta and Saskatchewan to createa regional system o inter-connected protected areas.

Criou: As a rst priority, develop a recovery strategy or woodland caribou (boreal) under theSpecies at Risk Actthat identies and works with the province to immediately protect critical habitat orwoodland caribou based on the best available science.

4.


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Follow through on hard caps For aIr pollutIon

In 2006, the ederal government announced its intention to place caps on oil sands air pollution as parto its nation-wide Clean Air Act. It said:

Past governments relied on voluntary measures, satised that industry could set their

own standards. Those days are over rom now on, all industry sectors will havemandatory requirements and we will enorce those requirements. Our plan puts thehealth o Canadians and the health o our environment rst.50

Oil sands production results in the release o dangerous air pollutants, including nitrogen oxides, sulphurdioxide and volatile organic compounds like benzene, which are linked to asthma, bronchitis, nausea,premature death in people with heart disease, and cancer. Air pollution is released by large acilities likeupgraders, but also through o-gassing o the tailings lakes and machinery like trucks and shovels.

The oil sands industry reports per barrel decreases in key air pollutants. However, the overall trendsare worsening. Between 2002 and 2008, oil sands acilities reported a near doubling o volatile organiccompounds and particulate matter, a 50 per cent increase in nitrogen oxides and a 14-times increase inhydrogen sulphide emissions.51

Air quality has also worsened dramatically in the oil sands region, with air pollution levels exceeding thetargets set by the Alberta government 1,556 times in 2009, compared to 47 times in 2004.52

In terms o acid rain rom the oil sands, relative success with one acidiying emission sulphur dioxide is undermined by the steady rise in another acidiying emission nitrogen oxides. While studies on theexisting damage to regional lakes by acid rain are inconclusive,53 uture damage seems inevitable giventhe example o La Loche Lake in Saskatchewan just across rom the oil sands, where alling rain has beenmeasured as having three times the acid level as unpolluted rain, about the same acidity as coee.54

RECOmmEnDaTIOnS

Set idi cps o ir poutio:Follow through on the promise to establish a binding cap on oilsands air pollution (sulphur and nitrogen oxides, volatile organic compounds, particulates) that is strongenough to reverse acidication o surrounding areas and prevent human health impacts as part o a newClean Air Section in the Canadian Environmental Protection Act.55

Idepedet oitor ir quit: Work with First Nations and the governments o Alberta,Saskatchewan and the Northwest Territories to implement a comprehensive and scientically rigorousair quality and deposition monitoring program that is arms-length rom industry, regularly peer-reviewedand transparent.

5.


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4

socIo-econoMIc IMpacts oF oIl sands expansIon

Clean energy is projected to become the third largest industrial sector worldwide within the nextdecade. Countries that lead the clean energy revolution are already harnessing the jobs that come alongwith the design, manuacture and installation o clean energy technologies, and will be poised to eedthe growing demand.

Canada is at risk o hitching its economic ate to an industry that will become increasingly at oddswith the clean energy revolution. While the oil sands industry provides economic benets and jobs orCanadians today, Canada must adequately invest in the transition to clean energy or risk getting letbehind the emerging clean energy superpowers o the E.U., China and the U.S.

Meanwhile, the economic impacts o oil sands development are uneven across the country. Parts oCanada are now being aected by Dutch Disease a term coined in the 1970s to describe thehollowing out o manuacturing in the Netherlands ollowing the discovery o a large natural gas eldthat drove up the countrys currency, pricing its manuacturing products out o international markets.

The recent rise o the Canadian dollar cannot be entirely linked to oil prices because the weakness o theU.S. dollar has also played a role. However, a recent study rom the University o Ottawa that examines

the impact o resource exports (e.g. oil) on the dollar and manuacturing jobs nds that Dutch Diseasehas a big impact in Canada. It estimates that 42 per cent o manuacturing job loss in Canada due torising currency has been a result o Dutch Disease stemming rom growing oil exports.56

As a major oil exporting nation, Norway has taken a proactive approach to warding o Dutch Disease,including the creation o a $450 billion sovereign wealth und derived rom oil revenues, which it haschosen to invest entirely outside o the country so that it doesnt distort the national economy.57 Thispolicy represents one o many potential lessons Canada ought to learn rom the experiences o otherenergy-exporting nations.

Another risk to Canadian jobs lies with the increasing trend towards exporting raw bitumen rom the oilsands or processing elsewhere. The Communications, Energy and Papermakers Union o Canada andthe Alberta Federation o Labour have opposed the approval o three recent pipeline proposals on the

grounds that each represents the loss o processing jobs in Canada given that they will acilitate rawbitumen exports.58

The ederal government needs to invest in the transition away rom ossil uels and ensure thatCanadians are beneting rom the jobs and economic potential o this rapidly growing sector. And, whilethe transition is taking place, the ederal government needs to understand and manage the impacts ooil sands exports on other sectors o the Canadian economy.

RECOmmEnDaTIOnS

Reiest i ce eer: Federal government tax revenues rom oil sands production should

be specically accounted or and reinvested in renewable energy, energy eciency and low-impacttransportation systems.

P for orer d couit trsitio: Develop and execute a plan to diversiy the economieso aected communities and train workers to transition rom oil sands production to other sectors, and inthe interim, maximize employment opportunities or Canadians in the oil sands industry.

address ipcts of petro-currec: Convene a Parliamentary Finance Committee study on theimplications o a petro-currency or the Canadian economy and how best to mitigate the worst impactso Dutch Disease, whereby a resource boom puts upward pressure on a nations currency, therebypricing manuacturing goods out o world markets. Develop and implement measures to addressnegative impacts.

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5

the deMand sIde: u.s. oIl use

Q: wi U.S. cosuers fce fue sorte if Cd iits oi sds epsio?

a: No. The U.S. is, and will remain, the primary customer or oil sands. Canada is the largest suppliero oil to the U.S., providing 20 per cent o the oil imported each year. Yet the U.S. Energy Inormation

Administration reports a 10 per cent drop in U.S. oil demand between 2005 and 2009.59 Even withoutpolicies in place to reduce oil consumption, U.S. oil imports are projected to decline by 3.8 millionbarrels per day by 2030 or by one third.60

Furthermore, President Obama has committed to cutting oil use by 3.3 million barrels per day in 10years, and the ederal and state governments are investing in technologies to reduce oil demand.According to the Environmental Protection Agency, the existing light vehicle GHG and uel eciencystandards will save 1.8 million barrels per day, or more than double the amount o current oil sandsimports. By 2030, a combination o polices including uel eciency standards, a low carbon uelstandard, and investment in transit could cut oil use by 10 million barrels per day in the U.S.

The U.S. is taking signicant steps to transition away rom oil, and the argument that Canada needs toexpand oil sands production to eed Americas growing demand or oil does not match the reality o

what is happening south o the border.

ThE TERm DUTCh DISEaSE waS COInED In ThE 1970S, whEn ThE DISCOvERy OF a laRgE naTURalgaS FIElD DROvE UP ThE COUnTRyS CURREnCy anD PRICED ITS manUFaCTURED gOODS OUT OFInTERnaTIOnal maRkETS. CanaDa IS alSO SEEIng ThE ImPaCTS OF DUTCh DISEaSE, aS 42 PER CEnT OFmanUFaCTURIng jOb lOSS RElaTED TO ThE RISIng DOllaR IS lInkED TO ThE gROwTh In OIl ExPORTS,whICh haS DRIvEn UP ThE valUE OF ThE lOOnIE.

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(endnotes)

Renata DAliesio and Jason Fekete, Oilsands on the agenda or Obama visit: Harper, Calgary Herald.January 13, 2009. http://www.calgaryherald.com/business/Oilsands+agenda+Obama+visit+Harper/1172590/story.html

Bob Weber, Ignatie: Albertas oilsands essential to nations uture. Seeks ederal commitment on CO2problem, The Canadian Press, February 28, 2009.

Jack Layton, speech in Fort Smith ollowing oil sands visit, October 6, 2008. Available at http://www.youtube.com/watch?v=qFX3wmdgCa0

Quebec quietly promotes oil sands opportunities, Canadian Press, February 12, 2010.

In this document, the word carbon is a shorthand expression that includes all six o the greenhouse gasescovered by the Kyoto Protocol (o which carbon dioxide is the largest component). The abbreviation CO

2e

reers to carbon dioxide equivalent, a standard measure which incorporates all six o these gases.

Fisheries and Oceans Canada, Fisheries Act, August 12, 2010. http://www.do-mpo.gc.ca/habitat/role/141/1415/14151-eng.htm

Environment Canada, A Guide to Understand the Canadian Environmental Protection Act, 1999, December10, 2004. http://www.ec.gc.ca/lcpe-cepa/deault.asp?lang=En&n=E00B5BD8-1

Sujata Gupta et al., Policies, Instruments and Co-operative Arrangements, in Bert Metz et al., eds,Climate Change 2007: Mitigation. Contribution o Working group III to the Fourth Assessment Report o theIntergovernmental Panel on Climate Change (New York, NY: Cambridge University Press, 2007), 776. http://www.ipcc.ch/pd/assessment-report/ar4/wg3/ar4-wg3-chapter13.pd

The IPCCs analysis applied to stabilization o the atmospheric concentration o GHGs at 450 parts per milliono carbon dioxide equivalent. This will be necessary to have a better than 50 percent chance o limitingaverage global warming to 2 C relative to the pre-industrial level (see Bill Hare and Malte Meinshausen, HowMuch Warming are We Committed to and How Much can be Avoided?, Climatic Change 75, nos 12 (2006):111).

Carbon dioxide equivalent reers to a standard measure o the six greenhouse gases covered by the KyotoProtocol.

Environment Canada, National Inventory Report 1990-2008 Greenhouse Gas Sources and Sinks in Canada:Part 1, 2010. http://www.ec.gc.ca/Publications/deault.asp?lang=En&xml=492D914C-2EAB-47AB-A045-C62B2CDACC29

Could Denmark Be Fossil Fuel Free by 2050?reprinted in Scientiic American online, October 1, 2010.http://www.scientiicamerican.com/article.cm?id=could-denmark-be-ossil-uel-ree

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Global_warming/G-20%20Report.pd

Tim Weis, Canada alling even urther behind the U.S. in sustainable energy investments per capita, March

11, 2010. http://pubs.pembina.org/repor ts/110310-renewables-eiciency-usa-vs-canada-2010.pd

Blue Green Canada, Falling Behind: Canadas Lost Clean Energy Jobs, May 2010. http://environmentaldeence.ca/reports/Falling_Behind.html

Indian and Northern Aairs Canada, Consultation and Accommodation. http://www.ainc-inac.gc.ca/ai/arp/cnl/index-eng.asp

For a detailed analysis, see: Ross et al. Crown Consultation with Aboriginal Peoples in Oil SandsDevelopment: Is it Adequate, Is it Legal? Canadian Institute o Resource Law Occasional Paper #19, May2007. http://dspace.ucalgary.ca/bitstream/1880/47190/1/OP19AboriginalOilsands.pd

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Consent must be reely given and not coerced, and it must be obtained prior to signiicant project decisions.Communities must be ully inormed, with access to accurate and comprehensive project-related economic,social, and environmental inormation. Companies must also provide communities with time and access tothe technical expertise necessary to acquire a complete understanding o project impacts and beneits.Companies must acknowledge that communities have the right to withhold their consent. (Ethical Funds,Sustainability Perspectives: Winning the Social License to Operate, February 2008. https://www.ethicalunds.com/SiteCollectionDocuments/docs/FPIC.pd)

Environment Canada, National Inventory Report, 89, Table 2-18. Available at http://www.ec.gc.ca/Publications/deault.asp?lang=En&xml=492D914C-2EAB-47AB-A045-C62B2CDACC29

Environment Canada, Turning the Corner: Detailed Emissions and Economic Modelling - Annex 3:Provincial/Territorial Targets and Actions, March 7 2008, 40. http://www.ec.gc.ca/doc/virage-corner/2008-03/571/Annex3_eng.htm

Environment Canada, Turning the Corner: Canadas Energy and GHG Emissions Projections 2006-2020,March 2008:. http://www.ec.gc.ca/doc/virage-corner/2008-03/pd/nat_eng.pd

Environment Canada, Turning the Corner Annex 3, 42.

Gupta et al., Policies, Instruments and Co-operative Arrangements.

According to the National Inventory Report, total emissions were 731 MT in 2005. A 17% reduction by 2020would equal 607 MT. Total emissions were 592 MT in 1990. An 80% reduction below 1990 level is equal to118 MT.

Environment Canada, Government o Canada to Regulate Emissions rom Electricity Sector, news release,June 23, 2010. http://www.ec.gc.ca/deault.asp?lang=En&n=714D9AAE-1&news=E5B59675-BE60-4759-8FC3-D3513EAA841C and Jim Prentice, Minister o the Environment (speech to the University o CalgarySchool o Public Policy and the School o Business, Calgary, Alberta, February 1, 2010). http://www.ec.gc.ca/deault.asp?lang=En&n=6F2DE1CA-1&news=1E866FB5-273D-46F2-9ED8-5CFFBCE8E069

The Government o Canada has not explicitly committed to reduce Canadas emissions to 80 per cent belowthe 1990 level by 2050, but it has endorsed the two degrees global warming limit and, as noted earlier, thisemissions reduction is the minimum required o industrialized countries or the world to have a chance o

staying within the two degrees limit, according to the best available science.

The National Inventory Report shows oil sands emissions at 16.8 MT in 1990 and 29.6 MT in 2005. The graphshows what emissions would be in 2020 i the oil sands sector meets the government commitment to cutemissions by 17% below 2005 levels (17% below 29.6 = 24.57 MT). The 2050 levels shown is based on an 80%reduction rom 1990 levels (80% below 16.8 = 3.36 MT).

WWF UK and the Cooperative Bank, Carbon Capture and Storage in the Alberta Oil Sands: A DangerousMyth (2009). http://www.co-operative.coop/Corporate/PDFs/Tar%20Sands%20CCS.pd

Alberta Chamber o Resources, Oil Sands Technology Roadmap : Unlocking the Potential. Final Report (2004)21, Figure 3.3. http://www.acr-alberta.com/Projects/Oil_Sands_Technology_Roadmap/OSTR_report.pd

In 2004, the Albian Sands, Suncor and Syncrude mining operations used on average 2.62 cubic metreso water to produce one cubic metre o bitumen. When the upgrading o bitumen to synthetic crude oilis included, the overall average is 4.04 cubic metres o water (Alberta Energy Utilities Board, personalcommunication, February 8, 2006). Suncor reported using 2.29 cubic metres o water per cubic metre osynthetic crude oil in 2008 (Suncor Energy Ltd., A Closer Look: An Update on Our Progress, 4.) Note thatSuncors operations include in situ projects, which use less water per unit o bitumen produced than domining operations, so Suncors average water use or mining operations may exceed 2.29 cubic metres owater per cubic metre o synthetic crude oil. Syncrude reported using 2.26 cubic metres o water per cubicmetre o synthetic crude oil in 2008 (Syncrude Canada Ltd., 2007 Sustainability Report. http://sustainability.syncrude.ca/sustainability2007/enviro/water/). See also R. J. Mikula ,V. A. Munoz and O. Omotoso, WaterUse in Bitumen Production: Tailings Management in Surace Mined Oil Sands, presented at the World HeavyOil Congress, Edmonton, 2008, 1.

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Alberta Environment, Water Diversion by Oilsands Mining Projects in 2007, data received September 2008.

Oil sands mining water allocations are rom Alberta Environment, Water Diversion by Oilsands MiningProjects in 2008 (data received March 2010). EPCOR Water Services reported treating 92.9 million cubicmetres o water or the greater Edmonton area in 2008 (EPCOR, 2008 Perormance Based RegulationProgress Report (2009), 8).

Mary Griiths, Amy Taylor and Dan Woynillowicz, Troubled Waters, Troubling Trends: Technology and PolicyOptions to Reduce Water Use in Oil and Oil Sands Development in Alberta (Drayton Valley, AB: The PembinaInstitute, 2006), 69. http://www.oilsandswatch.org/pub/612

Imperial Oil Limited, Imperial Kearl Oil Sands Mine Application, no. 1408771 & 1414891, volume 4, (Calgary,AB: Imperial Oil Ltd., 2005), 3-31.

J.P. Bruce, Oil and Water: Will They Mix in a Changing Climate? The Athabasca River Story, in Implicationso a 2C global temperature rise or Canadas natural resources: Athabasca River and oil sands development,Great Lakes and hydropower production, Ed. Tina Tin (Winnipeg and Toronto: WWF-World Wide Fund ForNature and The Sage Center, 2006).

Griiths et al., Troubled Waters, Troubling Trends, 33.

The water ound in oil sands tailings lakes is acutely toxic to aquatic organisms and mammals. Sources: M. D.MacKinnon and H. Boerger, Description o Two Treatment Methods or Detoxiying Oil Sands Tailings PondWater, Water Pollution Research Journal o Canada 21 (1986): 496512 and U.S. Environmental ProtectionAgency, Oice o Toxic Substances, Fate and Eects o Sediment-bound Chemicals in Aquatic Systems,Proceedings o the Sixth Pellston Workshop, Florissant, CO, August 1217, 1984.

P. G. Nix and R. W. Martin, Detoxiication and Reclamation o Suncors Oil Sand Tailings Ponds,Environmental Toxicology and Water Quality 7, no. 2 (1992).

Nathan Lemphers, Simon Dyer and Jennier Grant, Toxic Liability: How Albertans Could End Up Paying orOilsands Mine Reclamation. (The Pembina Institute, 2010). http://www.pembina.org/pub/2075

See: Erin Kelly et al, Oil Sands Development Contributes Polycyclic Aromatic Compounds to the AthabascaRiver and its Tributaries, Proceedings o the National Academy o Sciences, October 2009, and Erin Kelly et

al, Oil Sands Development Contributes Elements Toxic at Low Concentrations to the Athabasca River and itsTributaries, PNAS, July 2010.

New Democratic Party, Missing in Action: the Federal Government and Protection o Water in the Oil Sands,New Democrat Report o the Standing Committee Review o the Impacts o Oil Sands Developments onWater Resources, September 2010.

The Hidden Dimension: Water and the Oil Sands, Liberal Report rom the Study o the Standing Committeeon Environment and Sustainable Development on the Impact o Oil Sands Development on CanadasFreshwater, July 2010. http://rancisscarpaleggia.liberal.ca/iles/2010/08/The-Hidden-Dimension_Water-and-the-Oil-Sands.pd

Je Wells, Susan Casey-Lekowitz, Gabriela Chavarria and Simon Dyer, Danger in the Nursery - Impacton Birds o Tar Sands Oil Development in Canada s Boreal Forest, (Pembina Institute, 2008). http://www.pembina.org/pub/1760

Terra Simieritsch, How sorry is Syncrude? Actions speak louder than words, blog March 2, 2010. http://www.oilsandswatch.org/blog/54

Jamie Komamicki, Waterowl not only deaths on oilsands: data; At least 164 other animals killed over eightyears include bears, deer, moose, wolves, Edmonton Journal, April 9, 2010.

Alberta Energy, Albertas Leased Oil Sands Area, June 24, 2009. http://www.energy.alberta.ca/OurBusiness/1071.asp

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Environment Canada, Scientiic Review or the Identiication o Critical Habitat or Woodland Caribou(Rangier tarandus caribou), Boreal Population, in Canada (Ottawa: Environment Canada, 2008), vi.

Ibid., 145.

Jeremy Moorhouse, Marc Huot and Simon Dyer, Drilling Deeper: The In Situ Oil Sands Report Card (ThePembina Institute, 2010). http://pubs.pembina.org/reports/in-situ-report-card.pd

Letter to the Hon. Jim Prentice rom Ecojustice, August 17, 2010. http://pubs.pembina.org/reports/caribou-sara-lt-minister-august-17-2010inal-br.pd

Rona Ambrose, An Announcement Concerning Canadas Clean Air Act (speech as Minister o theEnvironment, Ottawa, Ontario, October 19, 2006). http://www.ec.gc.ca/deault.asp?lang=En&n=6F2DE1CA-1&news=549643B6-B2BD-42B8-A6D8-B85B7493F7DF

Environmental Deence, Dirty Oil, Dirty Air: Ottawas Broken Pollution Promise (2010) http://environmentaldeence.ca/reports/Dirty_Oil_Dirty_Air.html

Ibid.

See, or example, Brent G. Parsons et al, A Bioassessment o Lakes in the Athabasca Oil Sands Region,

Alberta, Using Benthic Macroinvertebrates, Journal o Limnology 69, Suppl. 1 (2010): 105-117.

New Data Suggests Alberta Oilsands Causing Acid Rain in Saskatchewan, The Canadian Press, August 12,2009.

A new Clean Air Section added to the 1999 Canadian Environmental Protection Act (CEPA) would bringabout real, signiicant improvements in local and regional air quality. The new Clean Air Section wouldauthorize the government to establish binding National Ambient Air Quality Standards (NAAQ), monitorand report publicly on their attainment, and implement the standards without duplicating existing provincialsystems or implementing air emissions requirements.

Coulombe et al. Does the Canadian Economy Suer rom Dutch Disease? Tinbergen Institute DiscussionPaper (2009).

For a ull discussion o Norway and Dutch Disease, see Erling Larsen, Escaping the Natural Resource Curseand Dutch Disease? Research Department o Statistics Norway Discussion Papers no. 377 (2004).

See: Alberta Federation o Labour, Approval o second massive bitumen highway to the U.S. proves EdStelmach is misleading Albertans when he promises to keep oil sands jobs in Alberta, media releaseFebruary 22, 2008. http://69.90.195.58/index.php?option=com_customproperties&Itemid=5&lang=en&tagId=74&task=tag

U.S. Energy Inormation Administration, U.S. Product Supplied or Crude Oil and Petroleum Products,http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbblpd_a.htm

U.S. Energy Inormation Administration, How dependent are we on oreign oil? December 10, 2009. http://tonto.eia.doe.gov/energy_in_brie/oreign_oil_dependence.cm

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