API

BLOGGER CONFERENCE CALL

MODERATOR:
Jane Van Ryan, API

SPEAKER:
Robert Renner, Alberta Minister of the Environment

Thursday, August 13, 2009

Transcript by
Federal News Service
Washington, D.C.
Bloggers on the call included Byron King of Whiskey & Gunpowder, Gail Tverberg of The Oil
Drum and Brian Westenhaus of New Energy and Fuel.

00:12 JANE VAN RYAN: Hello, it’s Jane Van Ryan here. May I ask who just joined us?

00:16 ROBERT RENNER: Hi, it’s Minister Renner here calling from Alberta.

00:20 MS. VAN RYAN: Hi, Minister Renner. Thank you so much for joining us. We’re
waiting for the bloggers to call in now – in fact someone else may be on the line now.

00:28 BRIAN WESTENHAUS: Hi Jane, it’s Brian.

00:30 MS. VAN RYAN: Hi, Brian. Thanks so much.

00:31 MR. WESTENHAUS: You’re welcome.

00:33 MS. VAN RYAN: No problem. Hello there, may I ask who just joined us?

00:36 GAIL TVERBERG: This is Gail.

00:37 MS. VAN RYAN: Hi, Gail. Thanks so much for calling in. I think Byron is the
only person who hasn’t joined us yet and I’m sure he’ll be on the line in a moment.

00:48 MS. TVERBERG: I wanted to thank you for setting it up – the phone call.

00:49 MS. VAN RYAN: Oh, our pleasure! Kate Shirley deserves all the credit for that
as a matter of fact.

00:55 MS. TVERBERG: Okay.

00:56 MS. VAN RYAN: We thought it would be very helpful to all of you to hear
directly from the Albertan government about the regulations and standards and their expectations
for the oil sands development. And we’re delighted of course that Minister Renner could join us.

We’ll wait just another moment and perhaps the next blogger will just join us in progress,
because I know the time is of the essence here.

01:25 MR. WESTENHAUS: Hi Gail, it’s Brian.

01:27 MS. TVERBERG: Hello, Brian.

01: 28 MR. WESTENHAUS: Do you want to start?

01:30 MS. TVERBERG: Okay. I guess the question I was going to ask first is what do
you see as the three biggest challenges from an environmental point of view facing the oil sands
and what do you see are being done about these challenges?
 01:48 MR. RENNER: Well, I guess I’d like to categorize the challenges in two areas.
The technical challenges that we’re dealing with and ensuring that we are developing oil sands
responsibly and the other is the perceptions that we have that there are – I think there is a lot of
misunderstanding, misconceptions about what is going on in the oil sands so despite the fact that
we’ve made significant progress and we will continue to make progress, in fact are insisting that
industry continue to make progress. I think that there is a misrepresentation of exactly where we
are at. And so I don’t know if I could say there are three challenges but those are sort of the two
general categories.

One is a challenge from a communications perspective – getting people to see what it is

that we’re doing, and then of course recognizing that there are some technical challenges but
we’ve seen a great deal of progress.

So we may want to explore both of those areas – that’s the reality. What is this, the
current situation and what are we doing to improve that current situation?

03:20 MS. TVERBERG: So do you see a particular area where there are problems at
this point in time?

03:30 MR. RENNER: I don’t necessarily characterize the issues as problems as much as
I do characterize them as concerns and challenges that we have to face. One is that as we
continue to see growth in the region the current consumption of water that is part of the industry
process is not sustainable.

That has led to wild accusations that the oil sands will cause the elimination of the
Athabasca River and the entire watershed as it expands. That’s not true – when we say it’s not
sustainable, that’s based upon a significant proportionment (ph) to environmental reserve.

And so if we’re going to ensure that we have environmental – a healthy, aquatic

ecosystem there has to be a significant portion of that watershed that’s allocated and reserved for
conservation purposes for environmental reserves.

So the challenge is how can we continue to see the dramatic reduction in water on a per
barrel basis that will allow for an increase in production of oil, bitumen from oil sands, but do so
on a per barrel basis with significantly less water because the reality is there’s only so much
water to go around. We’ve put in a regulatory regime that will limit the amount of water that
will require significantly more recycling and in some cases will require some operators to share
their process water – their water that’s available for recycling with their neighbors.

All of that is designed to remember that the number-one priority is to ensure that we
continue to have a healthy ecosystem, a healthy aquatic ecosystem, in that region.

05:52 MS. VAN RYAN: If I can interrupt–

 05:53 MR. RENNER: There’s one example. We also have similar kinds of challenges
with respect to air emissions. We have similar kinds of challenges with respect to some of the
reclamation issues.

I’ll give you an interesting example on reclamation. We’re doing a tremendous amount
of reclamation in that area right now – when you reclaim a former mine site, there are a couple of
things that have to happen. First of all, keep in mind that what they’re doing is mining sand that
is coated in oil. So basically what you do is you create a hole in the ground, you mine the sand,
put in oil-coated sand, you process that oil-coated sand and the final product is sand that doesn’t
have oil on it. And you take that sand and you put it back in the same hole where you got it
from. Eventually, you’ll fill that hole back up again because the vast majority of the volume is
not oil – it’s sand.

What we don’t want is a pool-table-like atmosphere in Northern Alberta that has nothing
to resemble what was there before – there were hills and valleys and water drainage facilities in
those areas. So once the mine has been fully worked – the bitumen has been removed – then the
next step is to put the overburden back in place – the top soil that was removed – and you have to
do that in a manner that allows for that natural drainage to take place. And it’s done in a way that
allows for rainfall – and there’s a significant amount of rain fall in that area – to drain
appropriately.

Where you need to have a significant amount of coordination and where there is a
challenge is if you have two different operators that are working on adjoining pieces of land and
are at different stages in their life cycle. If one person, one operator, has a mine that is nearing
end of life and is into land forming, they need to sometimes provide for drainage from their land
onto the neighboring land. And if that neighboring land is at a different stage, that may not
work.

That’s a bit of a challenge that we didn’t really contemplate in the early years when there
were very few players in the region. That’s something now that we’re working very intently with
industry to allow for that kind of coordinating approach so that neighboring landholders are able
to have an overall reclamations plan in place that recognizes that there may be various stages.
And we may have to stage both the mining operations on one hand or the reclamation on the
other hand so that they coordinate. And at the end of the day, we have an area that is - where the
land reforming has been done; that we’ve got proper drainage facilities and reforestation that’s in
place.

So that’s another challenge that we have. I wouldn’t say it’s a problem, but clearly it’s a
challenge and it’s something that we’re going to have to be more vigilant as we continue to have
further investments and new players operating in that region.

09:56 MS. VAN RYAN: Minister Renner, before you proceed – this is Jane Van Ryan,
again – I just want to mention a couple of things that we did not mention at the beginning of the
call. First of all, that this is being recorded. It’s important that I tell all of you that – and that we
intend to put the audio file and the transcript up on the Energy Tomorrow Web site for everyone
to use. Also, Byron, have you joined us?
 10:20 BYRON KING: Yes, I’m here.

10:21 MS. VAN RYAN: Good. I thought perhaps that was you that called in a moment
ago. Sorry to interrupt the conversation, but it was important that I mention those things. Who
would like to ask another question?

10:31 MR. WESTENHAUS: I have one.

10:32 MS. VAN RYAN: All right, Brian, please.

10:35 MR. WESTENHAUS: I guess there is a permitting process that requires the
secretary of state to sign off for NBAR to get the oil-sand oil into the U.S. Do you know where
that’s at today, and what’s the issue that’s got the thing stalled?

10:52 MR. RENNER: I’m not familiar with that particular issue at all.

10:56 MR. WESTENHAUS: Oh, okay.

10:57 MR. RENNER: I think what you may be referring to is some legislation that was
contemplated – and I’m not sure exactly what the status of that is – that was dealing with a form
of clean fuel standard CO2 intensity. And I can’t comment on U.S. legislation because, frankly,
I’m just not that familiar with it.

What I do know on the whole issue of clean fuel standards is that we have commissioned,
by U.S.-based consultants, by the way, independent analysis of the life cycle analysis of the CO2
emissions that are created by a number of different sources of hydrocarbons and oil, in particular.
Considering not only the amount of CO2 that is produced during the actual mining or extraction
or oil well activity, but also the amount of CO2 that is involved with the refining of the product,
with the transportation of the product – be it through pipeline; be it by ship – and of course, also
keeping in mind that no matter what source of fuel you use, 80 percent or more of the final
emissions are coming out of the tailpipe of the end user.

Using that total well-to-wheels full lifecycle analysis, there is very little difference
between oil-sands oil; Venezuelan oil, as a matter of fact, comes in slightly higher; heavy oil
coming out of California is very comparable; and even the traditional sweet crude oil that’s
coming out of the Middle East, by the time you factor in the amount of emissions related to
transportation, all of those products come in relatively close.

So we’re certainly cognizant of the fact that we have to continually address the issue of
CO2. We’ve done so, and I’d love to talk a little bit about that if someone would like me to – the
CO2 emissions management program that we have here in Alberta. But the fact of the matter is
that we believe that we have to do our part in reducing CO2 emissions, but we’re not in a position
where we need to do significantly more than anyone else. It’s a worldwide issue; everyone has
to reduce their CO2 emissions. The oil sands are no exception, but they’re no villian either.
 14:10 MS. VAN RYAN: Did someone just join us? (Pause.) We may have lost
someone, rather. Minister Renner, thank you so much. Do we have other questions? Byron, do
you -
14:23 MS. TVERBERG: I was just going to ask a clarification: so when is the CO2
report due out? And I was just going to ask more generally, do you put out any reports in general
about what progress you’re making against the goals that you have with respect to environmental
standards?

14:41 MR. RENNER: Well, we have the only legislation in North America that’s up and
operating right now that has mandatory reductions, requirements, for large final emitters of CO2.
In Alberta, we have about a hundred such large final emitters. We define a large final emitter as
an operation that emits in excess of 100,000 tons of CO2 a year.

Interestingly enough, the largest source of CO2 in Alberta, and similarly in much of the
United States, is not in fact oil sands production, but it’s coal-fired electric production. About 50
percent of our CO2 emissions are coming out of our coal-fired electric facilities.

But we have legislation in Alberta that has been in place for a number of years. But in
about 2003, I think, we started to have mandatory reporting of CO2 emissions by all of these
large final emitters. And then in 2007, we amended the passed legislation that put in place a
regime that requires reduction in CO2. So we annually report on the results of that legislation;
we talk about what our emissions are, and whether they have the compliance mechanisms that
have been put in place.

Under our legislation, there are three ways that industry can comply. One is by putting in
place the necessary infrastructure and plant improvements that will allow them to reduce their
intensity of CO2. Keep in mind, these are operations that are operating at full capacity. So when
they reduce their intensity, they are, in fact, reducing the amount of CO2 that they produce.

The other is by buying offsets with an Alberta-based offset system. We’ve pioneered the
development of third-party verifiable offsets in the province of Alberta, and companies have
been able to acquire several million tons of CO2 reductions to offsets in the unregulated market.

By far, the largest compliance mechanism that is chosen by industry – because they
recognize that it is in the long term the best alternative – is by paying into an emissions
management fund – a technology fund – that is geared towards commercializing, developing, the
technology that will allow for wide scale, large scale reductions in CO2.

CO2 capture and storage is one obvious example, but there are a number of very
promising new ways that are being explored to manage CO2 at source; whether that be through
changing the techniques that are used – converting from steam-assisted for in situ operations, for
example, to a solvent applied to deep oil sands that do not require heat and therefore dramatically
reduce CO2, to a frustration of CO2 in tailings ponds by adjusting the way the tailings ponds are
managed. There are ways that CO2 can play an important role in increasing the rate at which
water can be recycled, and also sequestering CO2.
 So the bottom line is that we now have $120 million that we have collected over the first
year-and-a-half of operation of our legislation. We have had real reductions of about 10 million
tons of CO2. And we have $120 million that are now in the process of the first round of RFPs
have been put out and we should see some tangible evidence of how that technology fund is
going to be investing in projects that have real absolute reductions in CO2 in the very near future.

19:29 MS. TVERBERG: Thank you.

19:31 MS. VAN RYAN: Byron, you haven’t asked a question yet.

19:34 MR. KING: No, I have a couple of questions. On that last point, Minister – this is
Byron King, by the way – on the last point: does the province of Alberta find itself, you know,
leading the nation of Canada, or do you find yourself in synch with what comes out of Ottawa or
are there certain frictions or whatever between what you’re trying to do and what the Ottawa
people are trying to do at the federal level? How does that all work together in perspective?

20:06 MR. RENNER: Byron, I’d have to say that it’s sort of all of the above. Alberta
clearly set the tone when we jumped ahead and leading all others with bringing forward
legislation. And to that extent, we certainly are leaders. We are also undeniably leading the
nation and I’d like to think we’re leading North America when it comes to public investment in
carbon capture and storage [CCS]. CCS is helping that. We believe it has very real and tangible
benefits to Alberta not only in oil sands production, but certainly in clean-coal technology to
continue to generate electricity from our plentiful coal resource and do so in a sustainable way.

We have made a commitment to carbon capture and storage and are at the point now
where three significant projects have been chosen to be the pilot projects to show that there can
be carbon capture and storage employed at a commercial scale. And the geology in Alberta that
allows us to do that, to be that by deep saline aquifers where – and, more practically, through
enhanced oil recovery. We’ve got a number of depleted oil fields that have dramatically seen
drop offs in production of conventional oil. And we know because we have had experience and
we’ve been working – industry has been working in that field for some years now that injecting
CO2 accomplishes two things: It permanently secures the CO2 deep underground, but it also re-
pressurizes the oil field and allows a second life, so to speak, for that oil field.

And we can increase that total production of oil from any given reserve from the industry
standard of about 15 percent to as high as 45 percent through the injection of CO2. So we
definitely are leading the way.

Specifically to your question of are there areas where we may or may not be in sync with
the federal government, we believe that the technology fund that we have in place in our
legislation that requires companies to invest in technology that will result, over the medium to
longer term, in significant CO2 reductions is critical if we’re going to be successful in
significantly reducing our CO2 footprint in Alberta.

There has been widespread discussion over whether cap and trade is – free-wheeling cap-
and-trade market is the best way to go. And from Alberta’s perspective, we recognize that, that
cap and trade has significant benefits. And they are certainly not opposed to putting in place a
cap on CO2 emissions and establishing a cost for CO2 emissions. But we believe that there needs
to be, within any kind of a system, recognition that investment in technology funds, investment
in technology that will result in real and dramatic reductions in CO2 needs to be part and needs to
be recognized by any kind of cap-and-trade system.

And so we’re engaged in some rather intense discussions with the federal government.
And I think that, at the end of the day, when the federal government sits down and comes out
with a Canadian position, there will be a couple things in there that we can live with. One is that
there will be opportunity to employ technology funds. And, secondly, there will be a
commitment, I think, for Canada to work very closely with the United States on ensuring that –
just as we in Alberta don’t want to step too far out in front of everyone else, Canada cannot step
too far in front of the North American United States.

And so, whatever we do, we have to ensure that it’s complementary to the programs that
we believe are going to be instituted in the U.S.

25:03 MR. KING: Does Alberta control its technology fund entirely or does –
(inaudible, background noise) – try to show you how you how to spend your money?

25:10 MR. RENNER: Well, the technology funding that exists right now exists under
Alberta legislation. The federal government does not have a program in place. And so, at this
point in time, Alberta controls its technology fund. But, interestingly enough, it’s managed by an
independent board. It is managed by a board of industry. The government of Alberta does not
have direct control over that fund. It is a fund, a board that is created under Alberta legislation
and the chairman of the board reports to a minister. But the decisions of that board are
independent and are done under terms of reference and a memorandum of understanding that we
have to clearly define what their expectations are. Those decisions are independent decisions.

In the future, once we see a Canadian-wide system, I suspect that there will be a similar
kind of governance structures put in place. And so what we’re clearly moving towards is having
a federal policy, federal regime, that recognizes the equivalency of provincial legislation and also
recognizes that the development of resources in Canada, the ownership of the resources resides
with the provinces, not with the federal government. And so it’s clearly provincial jurisdiction.

We are required and are proud to be part of a Canadian system, but we are the regulator;
we are the owner of the resource and we feel very strongly that we need to maintain the control
over any kind of regulatory system that is put in place.

27:12 MR. KING: That kind of segues into another point I wanted to ask that is a
slightly different thing. Could you discuss or describe the origin of the royalty system that you
have out there? How did you arrive at the system that you have compared to what we do in the
U.S. with federal offshore lands or onshore lands or state lands or things like that?

27:35 MR. RENNER: You’re kind of getting into an area of expertise that’s not mine.
I’m the environment minister; that’s the responsibility of the energy minister and sort of more
indirectly the revenue minister. But as an Albertan, I can give you some sort of general history.
The ownership of resources in Canada, not just Alberta, has always been part of the crown. And,
in fact, there are very few landowners in Canada and in Alberta that own the mineral rights that
are attached to the land.

So the vast majority of land is public land, particularly in Northern Alberta there is very
little privately owned land. And so there is no question who owns the mineral rights there. And
in Southern Alberta where the majority of the land is privately owned, the owners of the land
years ago for whatever reason relinquished their mineral rights.

As I understand it, back in the ’30s, there were taxes that had to be paid on the land and
additional taxes that had to be paid on the mineral rights. And a lot of people didn’t see a whole
lot of value in paying taxes on the mineral rights that they saw no – at that point, they hadn’t seen
any future in owning those mineral rights. And so, in many cases, they were relinquished after
nonpayment of taxes. So the crown ended up having most of the mineral rights in Southern
Alberta as well.

There are some private mineral-right holders and they operate under a similar kind of a
royalty regime to what the crown does. But, for the most part, it’s a recognition that the
resources are owned by the crown, by the government of Alberta. The government of Alberta
does not wish to engage in bring in the oil business. And so what we do is we sell the rights to
oil companies to developers who - (inaudible, background noise) – for recognition of the – we
being the owners of the resources, the – (inaudible, background noise) – royalties, in some ways
could be considered rent that they pay to develop the resources that we own.

So that’s kind of a short history on where the royalty regime came from. And the
royalties, over the years, just like income taxes, probably started out very simple and have got
exceedingly complex: of incentives and disincentives and different rates for different production
of wells.

Different rates of royalty are paid depending upon the depth of the well, the complexity
of the well. And I wouldn’t even want to begin to get into that; you’d have to talk to someone in
energy that has hundreds of very well-informed people that work with that every day.

31:02 MS. VAN RYAN: Minister Brenner, thank you so much for answering that
particular question. We are getting some interference on the line. If you are not asking a
question, I would ask that you put your phone on mute, if possible. Brian, I know that you’re
probably on location right now where it’s pretty difficult for you to get enough bars on your cell
phone to hear this, but I think it’s possible we may be getting a lot of wind noise from your
phone.

31: 31 MR. WESTENHAUS: Okay.

MS. VAN RYAN: So if there is a way to find a sheltered area, that would be very
helpful. Do we have other questions? If not, I have one I’d like to ask.
 MR. WESTENHAUS: I’m trying to do mute.

MS. VAN RYAN: I’m not sure how you mute the cell phone. That’s tough.

MS. TVERBERG: It’s *6 to mute and #6 to unmute.

MS. VAN RYAN: That’s a good – do that for the rest of the conference call.

Minister Renner, we have seen plenty of tweets, if you will, on Twitter that allege that a
very, very tiny proportion of land in Alberta has actually been reclaimed. The number that I saw
last night was .2 percent. I’m thinking – and this is complete speculation on my part – but does
that .2 percent refer to the land that has been certified as being fully reclaimed, or how would
you define that statistic and how do you answer questions about that issue?

MR. RENNER: Your presumption is correct. There is only one reclamation certificate to
date that has been issued for oil sands. What is misleading about stating that that is the only land
that has been reclaimed is that the recognition that the reclamation process is a very long process
and it’s a relatively young industry. And so once a mine has been – mining operations have
ceased – we talked about that earlier when I was talking about land reforming and those kinds of
things – it takes upwards of 20 to 30 years before the reforestation reaches the point where we
can issue a reclamation certificate.

So the one area that has been fully certified as being reclaimed is one of the very old,
original sites where overburdened with storage, when the original mine was opened, they created
a mound of overburden and they began the reclamation of that mound almost immediately and
that’s how they were able to get this reclamation certificate this soon while the mine is still
operating.

There are significant – literally thousands of acres of land, hundreds of square miles of
land that are in one form or another in the process of being reclaimed. One of the things that
we’re discussing with the industry right now, and it’s how we’re going to be addressing some of
the challenges I talked about earlier, about how we can coordinate activity from one leaseholder
to another, is something that I like to call “progressive reclamation.”

And under progressive reclamation, we would establish specific benchmarks. And so we

would say, all right, along with the approval that you have to develop in this particular area, here
are some benchmarks that you need to meet. After 5 years, this is where we expect your
reclamation plan to be; after 10 years, this is where we expect it to be; after 20 years and 25
years. I think that, that will do two things: It will incent industry to get this work done faster
because they know that they will not get the deposits back that we hold – and they’re substantial
– until they meet these various benchmarks.

But also, it will incent them to get started on various projects sooner because we may be
able to work some additional financial incentives into some of the early stages of reclamation.
But more importantly, I think it will bring a lot more transparency into the equation so that when
people talk about the amount of land that has been reclaimed, we will very clearly be able to
identify the reclamation, the various stages of reclamation and the amount of area that is in those
various stages.

So people will very clearly be able to see that, while any particular parcel of land may not
be fully reclaimed at a point in time, they’ll know that it is three-quarters, 50 percent along that
route. And I think it will give a much fairer and clearer picture on how much land is in fact
being reclaimed in that area.

36:31 MS. VAN RYAN: Thank you very much, and a follow-up question – not really
related, however: “Is it fair to say that there are plenty of countries around the world right now
that are vying for oil derived from oil sands? Do you have plenty of customers at this moment?”

36:49 MR. RENNER: Well, at this point in time, we certainly have a loss of interest
from various countries in the world to invest in the oil sands. And I’m presuming that they’re
looking at this from an investment perspective but also from a long-term supply perspective.
The issue that we’ll obviously have to deal with is transportation. We are landlocked – the oil
sands are landlocked – and so it will require the construction of pipelines to various seaports so
that they can be transported offshore.

There are – there is at least – (audio break) – pipeline that is now in place and there is
contemplation of others being developed over time. But the reality at this point in time is that
we’re constrained somewhat by our geography, and until the capacity is in place to have – that
are capable of moving the product offshore, our markets are primarily domestic and North
America.

38:10 MS. VAN RYAN: Okay, thank you very much. Brian, I’m hearing noise on your
end again; do you have a question you’d like to ask? Oh, you must have muted again. Anyone
have another question? We only have –

38:25 MR. WESTENHAUS: I think – am I back on now?

38:27 MS. VAN RYAN: Yes, you are.

38:20 MR. WESTENHAUS: Well, he’s answered all of my questions. Of course, I

didn’t come prepped; I was more interested in the technology side. My alarm – I just want to
apologize on behalf of a lot of Americans for sticking our nose in your business.

38:40 MR. RENNER: (Laughter.) You know what, when you get appointed to be the
minister of environment in Alberta, the one thing that comes along with it is a target painted on
your forehead. And the fact of the matter is that I’ve – I relish the challenge. Clearly, we have a
challenge ahead of us. We don’t deny that there is room for improvement. But what I get really
excited about is talking about the regulatory regime that we have, how it’s constantly improving,
changing with the times and how technology is changing.

And I almost have to remind people that so many of the dire predictions that are made
around oil sands are based upon old technology, some of which is not even in use today, much of
which is being dramatically changed. Revolutionary change is coming into this business and the
world of oil sands extraction 10, 15, 20 years from now will look nothing like what you see in
that area today. That’s partly because – (inaudible) – is recognizing the need for them to get
more efficient and more innovative, but it’s also largely because the government of Alberta is
constantly driving industry to do better and to find better and more environmentally responsible
ways of developing this industry.

40:20 MS. TVERBERG: I was going to ask a question about tailing ponds and leaking
from tailing ponds. That’s one issue that I see written about, but I’m just wondering if it’s just
sort of, you know, general hysteria or if it’s any kind of a real issue that you see.

40:41 MR. RENNER: Well, there’s no doubt that there is a degree of seepage that occurs
around tailing ponds. Again, we’ve got old technology and new technology here. The one
tailing pond that people like to talk about is the old, original one that was built 40 years ago that
is all but retired. It will – I think next year, 2010, will see the retirement of that pond. There’s
some seepage from that pond that has been identified.

Keep in mind that, that seepage is going straight down into a system that is relatively
static. And there are monitoring stations that are surrounding that tailing pond and the area of the
tailing pond that ensure that there is groundwater trans-ventilation – (inaudible, background
noise) – that there is processed water that is being returned into the surface water in the
Athabasca River.

The newer technology for tailing ponds is constructed in a way that there are a series of
wells that are drilled around the tailing pond that constantly bring the water that is seeping out of
the bottom of the well – pumping it back into the top. And so while there is water that is
certainly, undoubtedly seeping into the ground itself, most of that water is recaptured by these
siphoning wells and pumped back into the pond itself.

I think the exciting thing about tailing pond technology, though, is not the safety factor
that is built into tailing ponds, but that I don’t see a long-term future for tailing ponds at all. The
new technology that industry is moving towards is one in which we’ll see dry tailings employed,
which means that the water that is being recycled is pulled out of the tailings at an earlier stage.
So instead of returning, essentially, water with a little bit of sand back into a tailing pond and
allowing all of that to settle out, pumping the water off the top for recycling, they’ll actually
introduce a centrifuge and treatment of that water prior to it going into a tailing pond. And so
what goes back into the tailing pond is very thick mud instead of runny water.

Then the water is immediately put back into the system – reused on-site or the exciting
part, I think, is that they may even be an opportunity for some of that water to find its way into
some of the in situ operations that are now using saline water for steam generation. So the
overall impact in it will be that dramatically reducing the size of tailing ponds, and in some
cases, perhaps even eliminating the need for tailing ponds, even on mining operations.

Also, it’s important to note that a lot of the attraction of oil sands is focused on mining
operations. Mineable oil sands constitutes only about 20 percent of the total reserve. The vast
majority of the reserve is far too deep for mining. And that’s where the in situ operations are
focused. The future of oil sands is not mining; the future of oil sands is in situ. And the in situ
environmental footprint is significantly smaller than that of mining. And that’s where a lot of the
exciting new progress is being made.

You don’t need tailing ponds if you’re running an in situ operation. In some cases, some
of the advanced technology, you don’t even need water to extract in situ. So there’s some really
exciting things going on in that area on the oil sands.

45:22 MARK COOPER: Mark Cooper here at Alberta Environment. We’re close to the
minister’s time being up, but I did just want to point out one thing, because there was some wind
noise that came across just as the minister was stating the fact that there’s absolutely no
indication that there’s any tailings seepage or leakage into the Athabasca River. And that’s an
important point to stress.

45: 46 MS. VAN RYAN: Wonderful. Thank you for clarifying that, Mark. That is
indeed an important point. We have indeed, I think, exhausted our time with Minister Renner. I
want to thank both of you for allowing the bloggers and me personally to ask you a couple of
questions. You’ve helped us a great deal. Speaking strictly for myself and those of us here at
API, we’re very grateful for your time and we thoroughly enjoyed seeing the oil sands
operations. It was quite an eye-opening experience.

46:15 MR. RENNER: Great, well, thanks very much.

46:17 MS. VAN RYAN: Thank you, sir.

46:18 MS. (Inaudible): Thank you, too.

46:20 MR. (Inaudible): Thank you very much – appreciate it.

46:21 MR. (Inaudible): Thank you.

46:24 MS. VAN RYAN: All right, take care now. Bye, everybody.

(END)