Dying Ducks - The New Symbol of the Oil Sands Spells Disaster for the Alberta Energy Sector

Good for Roger Soucy of the Petroleum Services Association for this quote in a Calgary Herald today. It is a good piece of journalism on how the energy industry feeling the heat on ecological concerns with the death of 500 ducks in oil sands toxic tailing ponds

Here is the excerpt:
Even the Petroleum Services Association's Soucy says he remains optimistic, though he concedes energy-sector players have to adjust to "new realities" if the industry wants to maintain its social licence to operate. (emphasis added)
"Things are much more positive than they were in the fall," he said. "It's just going to take some time.
"Face it, you have to be optimistic if you're going to drill a hole in the ground and hope to get something out of it.
"It's always a risk, but you still have to be positive. That's what makes this industry work."

This is the kind of industry comment that shows a recognition that the energy sector has to come to grips with. It needs public support from Albertan – not just political support – if it I going to retain it social license to operate. Jobs and economic growth are vital to the well being of the province…but it is not the only thing that contributes to our well being.

When those holes are drilled in the ground, it is not only the investor funds that are at risk. There is risk for wildlife habitat especially for suffering species like grizzly and caribou. There is risk to the biodiversity of the province. There is potential for water and air risks and the negative impacts of fragmentation of the land base. Then there is the long term responsibility of the industry to reclaim the lands back to a useful, if not original purpose. I have not even mentioned the social aspects of well being that are impacted positively and negatively by too much growth too fast.

If the energy industry want to retain its social license to operate it need to address the value drivers of Albertans that relate to their activities. Our research shows the major value drivers and concerns of Albertans are around habitat, GHG, water usage and reclamation. Those are the hot topics for the

Many energy companies are conscious of this "new reality"already and are engaged in the issues. But they have a long way to go to convince the public who have been focused activated by the death of ducks in a toxic tailing pond - and full page newspaper ads apologizing are not going to cut it to regain public respect and trust.

Why Can't the Calgary Health Authority Live Within a Budget When Edmonton's Can?

May 13 UPDATE: Don Braid of the Calgary Herald has some interesting things to say on this issues.

This attitude from the Calgary Health Authority drives me crazy. The presumption that Edmonton and Calgary are the same and somehow there is a health funding discrepancy between the two authorities is idiotic and pure politics. It always worked in Calgary’s favour under Klein. That erroneous and simplistic “logic” will not prevail under Minister Liepert.

The fact is Calgary serves a population that is more urban, educated, wealthier, younger, white collar, less distributed and perhaps more culturally homogenous than Edmonton. I accept that latter point may be disputable given the recent immigration wave that came to Calgary. These are indicator of better health conditions and outcomes. For sure they indicate a better and healthier population than exists in the Edmonton region.

The Capital Region Health Authority in Edmonton serves an older, poorer, less educated, more industrial blue collar and culturally diverse population. That industrial based economy is prone to accidents that tend to be more serious than white collar worker paper cuts. Edmonton has a more dispersed population too, serving the north where we find all the Alberta development and related danger form accidents and social breakdown. All this indicates Edmonton will be a more expensive and difficult health care system.

The Calgary Health Authority can’t ever seem to manage its budget. It has perpetual deficits and the Calgary solution is to automatically run to the province for more money – and Klein always obliged. I can remember one year when Calgary ran a $70m deficit and the Capital Region Health Authority ran a $17m surplus. There were no unusual Calgary specific higher health demand circumstances that year. Go figure!

Come on Calgary. This perpetual self-absorbed Toronto wanna-be attitude and the over the top hubris about being better than Edmonton is childish. Surely the talented private sector brains down there can do better. If they insist they are better than the Capital City of Bureaucrats who makes up Edmonton why can’t they simply do it?

Calgary, as we are constantly told by Calgarians and their media, is where all the management and financial talent exist in the province. Just look how “smarter” they ended up being about the impact of the royalty review…surely they weren’t bluffing about something so important to the entire province. Surely they can get that kind of talent to serve on the Calgary Health Authority. Maybe then the Calgary Health Authority can actually do a better job of providing quality health care for Calgarians and provide top value for taxpayer dollars too. Give the superior attitude that is always spouted down there, this ought to be a slam dunk – wouldn’t you think?

Minister Liepert has made it pretty clear that the governance of the health care system is on the table as part of his efforts to change "mind-sets." Looking at the mind set attitude and actions of the Calgary Health Authority I's say it is a damn good thing he is looking at some serious governance changes.

Tailing Ponds and the Tale of Two Leaders: Stephen Harper and Ed Stelmach

Readers of this Blog will know I am no big fan of Prime Minister Harper. However, when he gets things right, I have to take my hat off and give credit where credit is due.

Harper Gets It:

The Prime Minister sure got it right in Edmonton the other day when he commented on the death of 500 ducks in the Syncrude oil sands tailing pond. He said the obvious when he commented "There were supposed to be systems in place to prevent this particular kind of event and obviously we're greatly disappointed, and troubled that we've seen what has occurred here." So what happened?

He shows he gets it with this comment, "I'm not here to make any excuses for the particular event that occurred in the last few days. It's a terrible event. It's not going to do anybody's image any good." So are we just going to spend money on PR to “improve” our image?

Then Harper put the incident in the larger context when he said, "Part of our responsibility as an emerging energy superpower is to be good stewards of our environment and also to become world leading on the environmental side of the business." Stewardship is the key issue here, not just growth at any cost.

Alberta - Not So Much:

The Alberta government response so far has not been as clear, consistent or as correct as it should be. Ed Stelmach is one of my favourite politicians but he seems to be vacillating and not showing that he “gets it” about the significance of this event. The GOA seems to be focused more on parsing the "facts. " Albertans are all about the greater symbolic significance of the demise of these ducks in these man-made toxic tailing ponds. The facts can be dealt with, but are they really all that critical determining how our political leaders need to respond to this "tragic" event.

Insuring and Assuring are Insufficient Responses:

The focus on the facts falls into the “insurance” level of pubic accountability. It is the lowest level of meeting the public's expectations for good governance. Screw ups happen and with the insurance approach to consequences the guilty are simply slapped with a fine - in this case of up to a million dollars. This fact of a fine has also been noted. Will a fine, of even a million dollars, change a corporate culture where the potential offender made a net profit approaching $300m in the last quarter?

The next public expectation level is for an “assurance” that public policy, industry practices and actual performance aims to prevent the repeat of such events. The failure to perform, the failure to monitor, the failure of timely notice to government, the potential failure to account and be transparent are some of facts that can and will be dealt with. This usually creates a governance culture of increased government regulation, monitoring, auditing reporting and enforcement. That increases government accountability and enforcement is obviously needed but is it enough to fix the stewardship problem?

It is an approach that too often results in industry merely complying with the new regulations as the stewardship standard. There is no incentive for project developers to raise the stewardship bar or to invest in new and better approaches. It is more about creating a corporate and political culture that worships the status quo.

Albertan's Know We Must Be More Responsible Stewards:

Albertans know we have a special responsibility to be global leaders in responsible sustainable development and also ensuring environmental stewardship - especially around oil sands development. A $25m PR campaign is not the way to prove this to the world. The indications are that the GOA has shelved its PR campaign aimed at countering ENGO messages about dirty oil ands. That image has already become the world-wide normative consciousness about Alberta's ecological values.

You can’t change values, earn respect or prove integrity with PR and paid advertising campaigns. We have to be more worthy and substantive than that if Albertans are going to regain the respect and trust of others in this interdependent globalized reality.

Why I Believe in Ed Stelmach:

Ed Stelmach made two very important and telling value statements during the PC leadership contest. He said “The environment trumps the economy” and “Leadership trumps issues.” Those two comments did a whole bunch to cement my conviction that his values were just what we needed for Alberta’s next leader.

Now, as the elected Premier of Alberta with an overwhelming mandate, Ed Stelmach knows he has to show us that he is serious about walking that talk. Good farmers are also good stewards of the environment. Ed Stelmach is well known as a good farmer. He has proven himself to be a capable leader. He can also be a good steward. It is time for Ed Stelmach focus on using his life experiences, his leadership skills and his stewardship values to ensure Alberta's economic, environment and social future.

Imagine No New Tailing Ponds for Oil Sands

Look at what is happening at the University of Alberta to eliminate tailing ponds, reduce water usage and apply CO2 to the extraction of oil from bitumen. And the water that is needed for pipeline transportation looks like it can be reclaimed from the existing tailing ponds. That means eliminating the need for new freshwater sources.

Lets get this research fast tracked! This is exciting and newsworthy stuff - and on a global basis - especially given how the toxic tailing pond duck deaths went viral around the world.

This is what a quality knowledge economy will do for Alberta.

It is Time Alberta Ramped Up Tailing Pond Reclamation Requirements

Back in the day Syncrude was one of the top rated corporate citizens in the country and for sure in Alberta. In the days when Eric Newell and Jim Carter were at the helm, Syncrude’s community involvement, imaginative philanthropy and social responsibility performance was exemplary.

Their fostering and nurturing of aboriginal people in hiring and contracting was ground breaking. They have recently received the first reclamation certificate for any oil sands operator. Their environmental leadership was also well known and respected.

Then things seemed to change when Exxon took over the corporate leadership. The focus became more about maximizing profits and pushing growth over an integrated sustainable an responsible approach to development.

Now it seems to many observers that this project is being run mostly out of Houston more than from Fort McMurray. Syncrude is a complex corporate entity with an interesting mix of other corporate owners. I am sure they are all starting to think about what exactly the impact of the recent death of ducks in their toxic tailing ponds means for them as owners and their social license to operate now too.

There were some players in the oil industry who overplayed their hands using intimidation tactics on Ed Stelmach during the public debate on the royalty review. I can’t think of a single threat those players made then that had any real substance or could be tied to the royalty rate increases…which do not even start until January 1, 2009.

The Government of Alberta is the proxy for the citizens of Alberta to ensure our natural resources are developed in a sustainable and responsible manner. The days of the energy industry self-regulation, self-monitoring and voluntary reporting of their environmental performance obligations should be over. Our government needs to step up to the plate and take over inspections and reassert its responsibility to the citizens of Alberta.

The need to ensure high environmental standards and enforced for air, land and water protection is squarely on the Stelmach government’s shoulders. They also need to take steps to ensure biodiversity and wildlife habitat protection has to be added to the GOA’s active engagement in ecological integrity.

Syncrude was required at one time to set aside $100m for reassurance around their reclamation obligations. That was reduced to a line of credit only. Then the annual $1m fee for keeping the $100m line of credit was eliminated along with the line of credit - with a promise that Syncrude’s reclamation efforts would start sooner. Syncrude has done some reclamation and it takes time but one site in 40 years is nothing to brag about in the bigger scheme of things.

Clearly the Alberta government has to demand that tailing pond reclamation for all producers start immediately and that it be done right – not just rapidly. Suncor, for example, has committed to reclaim its first tailing pond by 2010. That is a 136 hectare site that Suncor says will include rebuilding wetlands to encourage the return of wildlife. We need to see more examples like that coming from industry. Perhaps more huge profits being realized from $100 oil need to be invested in reclamation now and not wait for other generations to carry the can.

Government spending $25m on a PR campaign to “protect Alberta’s integrity” will do nothing of the sort and will actually do more harm than good if that is the key message. You can’t buy integrity and respect with advertising and brochures…you have to earn it. Substance over style and performance over posturing will have to be the new standards of behaviour that must become embed in our provincial culture.

Albertans will expect nothing less from their government and the energy corporations who we license to develop our natural resources. The energy industry is only a tenant. They are not the owner of the resource. Albertans own these resources and we have the obligation to insist our government and our tenants act responsibly and not just expediently in how they are developed.

The ecological tipping point has arrived and the citizens of Alberta are coming out of their cynicism and are mad as hell. I think they will become much more informed, aware, engaged and insistent about environmental performance concerns in all aspects of our provincial progress as an energy supplier.

Anyone who want to get re-elected or requires a natural resource lease and a social license to operate those resources had better take this new Alberta attitude to heart. The public is watching and they are not impressed.