Reclaimed oilsands site receives provincial blessing; A 'nice milestone' says Syncrude, which likely spent $114,00 per hectare

Hanneke Brooymans, March 20, 2008, The Edmonton Journal -- The Alberta government has issued its first-ever certificate for a reclaimed oilsands site.

The 104-hectare parcel of land, known as Gateway Hill, belongs to Syncrude.

It's a tiny fraction of the 40,000 hectares that have been disturbed by the oilsands industry thus far, but the government is hailing this as an important first step in restoring land to its natural state.

Gateway Hill was once a spot of wild muskeg. Now it's a rolling forested area that rears up as high as 40 metres above Highway 63 north of Fort McMurray.

Weighted with the responsibility of setting a precedent for the rest of the industry, Syncrude's small piece of land has gone through the certification process at a sluggish pace. A freedom-of-information request by The Journal showed the process started 10 years ago.

Critics have panned the process for its lack of transparency, but the company says it is pleased the process is now complete.

"It's a nice milestone," said Syncrude spokesman Alain Moore. "We're quite proud of it."

They have another 4,400 hectares that they consider reclaimed, but haven't submitted any further certificate applications yet.

"We are assessing and considering some other segments of reclaimed land that could be suitable," Moore said.

Altogether, the company has 20,000 hectares of land so far that will one day need a reclamation certificate.

Exactly when oilsands land will be reclaimed depends on the project, said Kim Capstick, an Alberta Environment spokeswoman.

"The reclamation schedule is unique to each project," she said, emphasizing that each project approval has reclamation requirements.

Typically oilsands mining requires the use of land for several decades. The reclamation process occurs throughout the life of the project, and the final reclamation certification occurs when the land is no longer in use and has been fully reclaimed.

No other reclamation certificate applications have been submitted yet.

Capstick said Syncrude's certificate took a while to process because the government didn't want to rush through it, since it was the first one.

"We had to figure it out as we went along."

In fact, the government still has a committee working on what the rules on adequate reclamation would be, said Simon Dyer, a senior policy analyst with the Pembina Institute, an environmental think-tank.

Dyer said it's good to see a spot officially reclaimed, but he notes it was a site that only involved the reclamation of an enormous pile of overburden, the soil scraped off a site before it is mined. The reclamation site had no tailings or actual mined land.

"It hasn't changed anything in terms of we haven't seen any demonstrated evidence that companies are able to deal with the tailings when they have to incorporate those into the reclaimed landscape and I think that is the real challenge for the industry," Dyer said.

But Capstick contends the relative small size and ease of this project was good for the process.

"We can refine the process, refine how we go about doing this, learn as we go so the next time we go in and we know it will have complications that may not have existed in this particular parcel of land, we're going to be ready for that and have had that experience under our belt."

Dyer thinks one of the things the government definitely needs to reconsider is the financial guarantees it's securing from oilsands companies.

The industry as a whole is bonded for $468 million, he said. "If you do a simple calculation that would suggest they have something like $10,000 or $11,000 per hectare in the bank should any of these companies default on their reclamation. We don't have access to that information, but I would argue that Syncrude probably spent an order of magnitude more than that."

Moore did not have an breakdown for the cost of Gateway Hill. However, he said that in 2006 Syncrude spent a total of $30.5 million on reclamation activities on 267 hectares.

That breaks down to about $114,000 per hectare.