Suncor, Syncrude face new regulations
CARRIE TAIT
CALGARY— Globe and Mail Update
Published Tuesday, Mar. 01, 2011
The Alberta government is on the verge of rewriting rules governing oil sands reclamation, changes that target the two largest players in northern Alberta as well as any new mines.
According to a leaked presentation made to various groups, Alberta Environment wants to end the favourable treatment Suncor Energy Inc. (SU-T45.40-0.62-1.35%) and Syncrude Canada Ltd. receive on the security deposit they provide the province to cover reclamation costs. The change would increase their rates to the same level as other oil sands miners. Further, the government wants to lower the rate of security for all new mines, allowing them to provide less security in the mines’ early stages, but more over the long term.
Oil sands miners provide security, in the form of letters of credit, so taxpayers will not be on the hook for future reclamation costs. The proposed changes, which have yet to go to Cabinet but could be unveiled in two to three weeks, would mean the province will eventually hold more in reclamation security, despite a temporary drop in the size of security deposits.
The letters of credit are discarded once an area has been reclaimed.
Security deposits for Suncor and Syncrude’s original two mines is currently a flat rate of three cents per barrel of bitumen, while all the other mines must post security covering the total estimated cost of reclamation, said Trevor Gemmell, a spokesperson for Alberta Environment. The two companies, which were involved in the discussions, agree with the change, he said.
The new rules will also force all mining companies to put up security to the tune of $30-million on plant sites, and $60-million if the site has an upgrader. Alberta currently holds $946-million in security from oil sands mines. Only 104 hectares of land has received a reclamation certificate.
Coal mines will also be affected by the proposed reclamation changes. New coal mines designed for domestic consumption will provide a security deposit of $2-million, while those mining in order to export their products will promise $5-million. The province currently holds $213-million in security deposits from coal producers.
http://www.theglobeandmail.com/report-on-business/suncor-syncrude-face-n...
