"The reality is that the best oilsands rights have already been secured, promises to investors have been made, plans have been drafted, money is being spent and the areas proposed for the time out have marginal potential."
Therefore, the need to shut down the tar sands and *cancel* the existing leases....no more industry-friendly greenwash courtesy of Pew/Sunoco and other multi-billion dollar US foundations.
- Tarpit Pete
Oilsands lease issue tempest in a teapot
It's hardly a call to slow development in the Athabasca region
Claudia Cattaneo, Financial Post
Published: Wednesday, February 27, 2008
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On an ordinary day, a letter from a non-profit group of oilsands companies, environmental organizations and aboriginal communities calling for a three-year time out before selling any more oilsands leases in low-potential oilsands areas covered by boreal forest would barely register as a nice idea.
Yet a mix of sensational headlines, a vitriolic Alberta election campaign and increasing pressure on oilsands developers to clean up their act have combined to transform the draft letter -- made public on Monday but mailed on Jan. 11, long before the election was even called -- into a new flashpoint, supposedly pitting Premier Ed Stelmach against oil companies, dividing the oil sector, stirring outrage among opposition leaders that the Premier is allowing a free-for-all in the oilpatch.
Well, this one doesn't have legs.
While it is true Mr. Stelmach does not have a lot of friends in the oil community as a result of the controversial royalty increases he announced last fall, to chastise him for not supporting a moratorium on oilsands development that oil companies are not calling for is a bit much.
So is the suggestion that the proposal is turning the oilpatch into splitsville, with some companies calling for the break because they want to keep competitors out, while scoring points for painting themselves green.
What happened is this: A group called the Cumulative Environmental Management Association, charged by the government to come up with proposals to temper the environmental impact of oilsands development in northeast Alberta, has recommended the province suspend the granting of oilsands rights until Jan. 1, 2011, to keep lands available for three new conservation areas.
It's a great idea worth exploring, and one of many that the sector should pursue to show it can manage its environmental impact as development expands.
But it's hardly a call to slow development in the Athabasca region. Indeed, no oilsands CEO in his right mind would agree to a three-year moratorium on development, which makes the controversy a tempest in a teapot.
The reality is that the best oilsands rights have already been secured, promises to investors have been made, plans have been drafted, money is being spent and the areas proposed for the time out have marginal potential.
"The conservation groups have recognized that these areas of the boreal forest aren't in high demand for oilsands," acknowledges Corey Hobbs, communications advisor to CEMA.
In fact, the sale of oilsands rights has already slowed substantially. The province collected a puny $24.4-million from two Crown sales of oilsands rights so far this year in the Athabasca, Cold Lake and Peace River area, according to statistics published on its Web site. During all of last year, it received $649.7-million, down from a high of $1.96-billion in 2006.
It's no surprise there is division among oil companies about the proposal. Royal Dutch Shell PLC, ConocoPhillips, Devon Energy Corp., Imperial Oil Ltd., Total SA, Petro-Canada, Suncor Energy Inc., Husky Energy Inc. are supportive. Canadian Natural Resources Ltd., EnCana Corp., Nexen Inc. and UTS Energy Corp. are against. In its own letter explaining its opposition, Canadian Natural says one of the areas proposed contains an aquifer, which is a preferable source of industrial water than fresh water. UTS notes northeastern Alberta already has more protected areas than any jurisdiction in Canada, if not North America, and that some of the proposed areas could have oilsands resources.
This hardly means battle lines are being drawn. Oilsands companies disagree about a lot of things, particularly initiatives that could limit future options. If they didn't, the greater worry would be collusion.
Given the divergence in stakeholder views and uncertainty about all the proposal's implications, Mr. Stelmach's plan to wait until June to provide a response, so the proposal can be debated at a roundtable including all stakeholders, sounds reasonable. In oilsands years, which usually span generations, that's barely a flash.
