Alberta bound : the interface between Alberta's environmental policies and the environmental management of three Albertan oil sands companies

Abstract

The Athabasca Oil Sands, located in northeastern Alberta, Canada, were for many years anomalous. Two oil sands operators developed their extraction techniques for 30 years, refining their technology before production became economically profitable. In the last 15 years as oil prices climbed, a tremendous amount of growth has occurred in the oil sands. Dozens of new projects are under construction or awaiting approval, creating one of the largest and most capital intensive mining operations in the world. Curiously there is a significant difference in environmental performance among three companies involved in open pit mining of the oil sands, Syncrude, Suncor Energy and Shell Canada's Muskeg River Mine. Suncor Energy is known for their reputation in stakeholder collaboration and reporting initiatives but has one of the most problematic environmental legacies. Meanwhile, Syncrude is seen as a relative leader in land reclamation but has taken the least action with regard to climate change. Shell Canada's Muskeg River Mine, draws from the resources of their parent company, Royal Dutch Shell, to proactively frame climate change management but has no public indicators of their land reclamation progress. What is the cause of this variation in environmental performance? Is it a result of difference corporate environmental governance strategies or of government policies? I suggest the variation of environmental performance is an organic response to the innate discretionary nature of environmental policymaking in Alberta, the lack of government leadership and the degree of initiative demonstrated by each company.

(cont.) From my research it is clear that the inconsistent and at times vague government policy and regulations, opaque government agencies, poor monitoring and enforcement, inadequate incentives and penalties does not effectively encourage stronger environmental performance among oil sands developers. At the same time, internal corporate strategy, often in response to the recent pressure from environmental groups, First Nations communities and international media compels some companies to innovate and others to simply follow the regulations. Maintaining their social license, reducing costs, and anticipating future regulations have all been cited as motivation for innovation. Those advocating the status quo cite the exemplary regulatory framework already in place and the adequacy of existing stakeholder engagement processes; whereas corporate environmental leaders are frustrated by the uncertainty around environmental policies created by the provincial government. Ultimately the responsibility for the environmental management of the oil sands lies with the province. Companies can strive to innovate and compete with other developers, but they are not accountable for the management of cumulative effects in the region. If Alberta is going to improve the environmental performance of oil sands developers then a more transparent, credible and strategic environmental planning process must be created.

(cont.) I conclude with three areas of policy improvements the Province can make to not only improve the environmental performance of the oil sands but also regain public trust in their role as manager of Alberta's natural resources: transparency, monitoring and enforcement, and responsible leadership.