June 20, 2008

Pembina Institute report recommends halting construction of oilsands upgraders

Alberta refuses to delay construction, despite fears over water consumption and pollution

EDMONTON

Alberta should not approve as many as six more oilsands upgraders near Edmonton until the province has a solid plan to limit the huge amount of fresh water they will use and to better manage the pollution they will produce, a new study says.

The Pembina Institute’s Oilsands Fever report, released on Monday. June 16, 2008, says nine bitumen upgraders are expected to begin operating just northeast of the capital between 2015 and 2020.

However, Alberta Energy spokesman Jason Chance said Pembina’s call for a delay on expanding “Upgrader Alley” is not feasible and will not be considered.

Chance said Pembina’s call for a delay on expanding “Upgrader Alley” is not feasible and will not be considered.

Such a move would drive investment away and lead to more bitumen being shipped out of the province for processing, which would cost thousands of jobs, he said.

The study claims that, together, the upgraders would consume 10 times as much water as the City of Edmonton each year and spew 45 megatonnes of greenhouses gases — the equivalent to an amount produced by 10 million vehicles, the report says.

“Many people do not yet realize the scale and pace of development that will transform agricultural land and natural areas into an industrial complex about three-quarters the size of Edmonton,” said Mary Griffiths, the report’s lead author.

“The Alberta government has the opportunity to avoid environmental and social problems now being experienced in the Fort McMurray area. Through proactive planning those mistakes can be avoided.”

Companies are choosing to locate the upgraders, which transform gooey bitumen into synthetic oil, near Edmonton to avoid competition for workers and the high cost of doing business in northeastern Alberta, the report says.

The Edmonton-area upgraders would process up to two million barrels per day and would require railway lines, roads, pipelines and electrical transmission lines.

The Scotford upgrader operated by Shell Canada is already expanding, the report says.

BA Energy-Value Creation’s Heartland plant and North West Upgrading Inc.’s North West upgrader are under construction. Applications for five other upgraders have been submitted to the province and one firm has land holdings for another.

Such a move would drive investment away and lead to more bitumen being shipped out of the province for processing, which would cost thousands of jobs, he said.

Canadian Press

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