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Energy industry set to cut funding for oil sands environmental watchdog

Roderick Hazewinkel, a limnologist with Alberta Environment, wades into the Athabasca River, down stream from many oilsands projects, to take samples and measure water quality near Fort McMurray, Alta., Monday, Sept. 19, 2011.THE CANADIAN PRESS/Jeff McIntosh


The oil sands industry is embroiled in a dispute over its plans to trim funding to an environmental advisory and monitoring group, at a time when companies are moving aggressively to persuade the public they care about being green.

For more than a decade, the Cumulative Environmental Management Association, or CEMA, has funded research to draft recommendations on improving the impact of the oil sands on air, land, water and biodiversity. It draws the bulk of its funding from industry, which has funnelled its dollars through the Oil Sands Developers Group.

On the strength of recommendations made in part by industry members, the association submitted a $9-million budget request for next year. Several weeks ago, the developers group said it was prepared to fund just over $5-million. The group's executive director said he plans to meet with CEMA Monday.

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CEMA's budget is made up of work plans that come, in part, from industry representatives, who co-chair each of the association's working groups. This year, they recommended new work on how much groundwater industry can reasonably extract, an important issue given that water is such a critical ingredient for the oil sands. CEMA also wants to do more on health issues, such as assessing how the pungent odour of crude extraction affects humans.

But some of that work is now in question, given the uncertainty of CEMA's funding for next year, at a time when several federal and provincial reports have called for better, more extensive monitoring, rather than less.

Ruth Kleinbub, a Fort McMurray environmentalist on the CEMA board, questioned how industry couldn't afford more, given the strength in crude prices. The threatened cutback is frustrating because "some of this work is really, really important, and I think it's best done in a forum like this," she said.

Yet in some parts of industry, there is a belief that CEMA may no longer be needed. The group was set up in part to examine different environmental impacts, and recommend so-called "threshold" rules that set out, for example, how much water industry can remove from the Athabasca River, or how toxic effluent "tailings ponds" should be reclaimed. It has also sketched out how environmental impacts should be monitored.

After a decade, many of those recommendations have been made, and formalized by the province into rules. With that work over, why keep funding CEMA, some ask.

At the same time, reports critical of the way monitoring is now conducted among disparate agencies have prompted a bid to create a single, effective monitoring organization. That has created real questions about what to do with the existing group.

"It's a much larger question than just the CEMA funding," said Ken Chapman, executive director of the Oil Sands Developers Group. The industry is looking to figure out "how do we design intelligent, effective, science-based monitoring going forward?" he said.

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For its part, CEMA says its work has grown in importance amid a fast-paced expansion of the oil sands that has created numerous new environmental concerns. The monitoring of "cumulative effects" – which examines the impacts of an entire industry on a region's ecology, rather than a project-by-project assessment of environmental degradation – has emerged as an increasingly important issue confronting the oil sands.

And the possibility of a reduced CEMA budget – $5-million is not only far under its 2012 budget request, but also well below its funding for 2011 – comes after a series of changes designed to mitigate corporate influence on the association. Rather than have decisions made by an industry-dominated board – which, critics say, gave companies an effective veto – the voting structure was changed. Four groups: companies, environmental organizations, government and first nations, each have equal representation. Industry no longer has a veto.

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About the Author
Asia Bureau Chief

Nathan VanderKlippe is the Asia correspondent for The Globe and Mail. He was previously a print and television correspondent in Western Canada based in Calgary, Vancouver and Yellowknife, where he covered the energy industry, aboriginal issues and Canada’s north.He is the recipient of a National Magazine Award and a Best in Business award from the Society of American Business Editors and Writers. More

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