Suncor Gets Approval For Oil Sands Tailings Management Plan
June 17 2010 - 8:48PM
Dow Jones News
Suncor Energy Inc. (SU) said it will spend more than C$1 billion
on an oil sands tailings pond-management plan approved by the
Alberta government Thursday.
It's the third plan to deal with the oil sands industry's
growing tailings ponds, which already cover more than 50 square
miles of land in Alberta. Tailings ponds pose one of the most
significant challenges to oil sands mining operations, as a portion
of the hot water they use to separate oil from sand is afterwards
contaminated with heavy metals and other toxins that make it an
environmental hazard. The tailings ponds can take decades or even
hundreds of years to dry on their own.
Companies in Alberta have been storing the tailings in large
containment ponds, but the problem keeps growing along with the oil
sands industry's production, which is expected to double over the
course of this decade.
In an effort to deal with the problem, the Alberta government
issued a directive requiring oil sands companies to submit plans to
begin to cut their annual generation of tailings by 20% starting in
July, ramping up to a 50% annual reduction by 2012.
Suncor's plan involves a drying process in which the tailings
are mixed with a wastewater treatment chemical and layered over a
sloping sand beach, where the water dries over a period of weeks,
and the silt left over after evaporation can be reclaimed. Kirk
Bailey, executive vice president of Suncor's oil sands division,
said the plan will cut tailings reclamation time by decades, and
that Suncor planned to complete the transformation of its first
tailings pond into a solid surface later this year.
The Alberta government said it believes Suncor's plan will cut
the size of its existing tailings ponds by 33 million cubic meters,
or about 30%, and allow it to avoid building more ponds. The
government approved Suncor's plan after adding conditions related
to coke conservation and sand disposal.
Alberta has so far approved plans by Suncor, the Syncrude
project and the Fort Hills oil sands project, which is also partly
owned by Suncor. Plans submitted by Canadian Natural Resources Ltd.
(CNQ), Imperial Oil Ltd. (IMO) and Royal Dutch Shell Plc (RDSA) are
still being reviewed, but don't meet the timeline set out by the
government.
However, Syncrude's tailings management plan also didn't meet
the timeline, but it was approved after the government said
additional conditions would allow it to meet the reduction schedule
by 2014.
Syncrude is a joint venture owned by Canadian Oil Sands Trust
(COS.UN.T), ConocoPhillips (COP), Imperial Oil, Suncor, Nexen Inc.
(NXY), Murphy Oil Corp. (MUR) and Mocal Energy Ltd. ConocoPhillips
has agreed to sell its stake to Chinese state-owned oil company
Sinopec (SNP).
-By Edward Welsch, Dow Jones Newswires; 613-237-0669;
edward.welsch@dowjones.com
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