Documents filed by Imperial Oil show the company and Alberta’s energy regulator knew the Kearl oil sands mine was seeping tailings into groundwater years before a pool of contaminated fluid was reported on the surface, alarming area First Nations and triggering three investigations, the Canadian Press reports.
“They knew there was seepage to groundwater,” said Mandy Olsgard, an environmental toxicologist who has consulted for area First Nations. However, the Alberta Energy Regulator (AER) and Imperial “decided not to notify the public and just manage it internally.”
The revelations add to a timeline of events that had already made headlines, after a report by management consultants at Deloitte showed big shortcomings in the regulator’s protocols:
• 2015: Imperial introduced a “seepage interception system.”
• 2019: According to Olsgard, the AER was already aware of seepage by this year.
• 2020 & 2021: Reports from Imperial sent to the AER during these years confirmed tailings residues were detected at monitoring wells 70 kilometres north of Fort McMurray.
• 2022: In May, reports of discoloured water around the Kearl lease boundary prompted an AER inspector’s visit to observe the seep areas. These seepages were classified as an “incident,” not an “emergency.” Subsequently, only one email was sent to a single point of contact for nearby First Nations communities, without any follow-up.
• 2023: Another leak reported in February spilled roughly 5.3 million litres of industrial wastewater from a storage pond, prompting the AER to issue an environmental protection order against Imperial to address the contamination. At this time, the earlier leak detected in May, 2022 became more widely known, resulting in a backlash of criticism from affected communities.
AER Notified of Seepage in 2020, 2021 Reports
Imperial said in a statement that seepage was anticipated in Kearl’s original design, writes CP. Spokesperson Lisa Schmidt said the company has kept both the regulator and area communities informed.
“We have been working to address the areas of shallow seepage from our operating lease area,” she said. “We recognize there are concerns regarding water quality, and we take this very seriously.”
AER spokesperson Lauren Stewart said the agency is committed to strong oversight of the site.
“It is of upmost priority that downstream water continues to remain safe, and any potential impacts to the public are both mitigated and communicated transparently,” she said in an email.
“During this period, there were no signs that indicated the system was not functioning according to its intended design.”
Olsgard points to groundwater monitoring reports filed by Imperial to the regulator. The 2020 and 2021 documents acknowledge tailings were seeping from the ponds that were supposed to contain them. The tailings were detected at monitoring wells within the mine’s lease area, about 70 kilometres north of Fort McMurray.
Earlier studies suggest those results could have been influenced by natural variation or chemical processes in the soil. The 2021 document says little room for doubt remained.
“(Process affected water) seepage, or potential early arrival of (such water), was reported at 11 monitoring locations in 2021, indicated by trends and/or (control objective) exceedances in multiple (key indicator parameters),” it says.
Substances found at concentrations above desired limits included naphthenic acids, dissolved solids, and sulphates—a common proxy for hydrocarbon residue. Oil sands tailings are considered toxic to fish and other wildlife.
In May 2022, the seepage was reported to First Nations and communities as discoloured water pooling on the surface. They received little information after that until February 2023, when the regulator issued environmental protection orders against Imperial—and then only after 5.3 million litres of contaminated wastewater escaped from a holding pond.
Olsgard said the regulator had reports of seepage as early as 2019. Imperial had instituted a “seepage interception system” in 2015.
AER’s Stewart acknowledged seepage had been confirmed.
“Imperial initiated, and (the regulator) confirmed, mitigation activities that included activation of the (seepage interception system) and adding more pumping wells,” she said.
Four pumping wells activated in 2021 to contain the seepage “diverted” more than a billion litres of groundwater, says the report. After that, key parameters dropped or stabilized at “most” locations.
“These original interception pumping wells were first activated in early 2021 in response to the detection of process affected water above control objectives, in accordance with approved operating procedures,” Schmidt said.
“Imperial shared this information with the (regulator) and communities in early 2021 and has provided annual updates.”
Groundwater in the area moves at between three and 27 metres a year. Some evidence suggests tailings have seeped off the lease.
Data filed to the provincial Oil Sands Monitoring Program shows sulphates at a sampling station in the Muskeg River began climbing drastically in March 2022. Within a year, they were 18 times higher than the 2021 average.
That sampling station is south of the Kearl lease. The releases that triggered the protection order were on the north side. Schmidt said those readings were unrelated to tailings.
Stewart said Imperial has increased its monitoring frequency and is working to understand the extent of the release.
The seepage at Kearl continues. Data posted on the regulator’s website shows several test wells continue to show hydrocarbon levels in surface water that exceed provincial environmental guidelines.
“There is no indication of adverse impacts to wildlife or fish populations in nearby river systems or risks to drinking water for local communities,” Schmidt said.
Over the summer, Imperial expanded Kearl’s seepage interception with additional pumps and drainage structures. Monitoring continues.
“The (regulator) did not stop the seepage in 2022 and they didn’t acknowledge it since 2019,” Mikisew Cree First Nation Chief Billy-Joe Tuccaro said in a statement.
“They say they have contained the seepage. They have not. The fact that they did not tell us about the seepage for nine months is the tip of the iceberg.”
Both the Mikisew and the Athabasca Chipewyan First Nation use the area outside the mine lease for traditional activities such as hunting and gathering. Both nations are downstream of the mine and say they fear for their water quality.
Deficiencies in the AER Protocols
Last Wednesday, the regulator’s board released a third-party report by Deloitte, assessing how it handled communications after the two large releases of wastewater. Although it found the AER followed its established protocols, Deloitte concluded those rules were outdated, vague, and had significant gaps.
“It’s not surprising when someone says that you complied with this stuff because it is lacking in so much important detail and in so many formalized protocols,” said University of Calgary associate law professor Martin Olszynski, in an interview with energy journalist Markham Hislop.
Deloitte’s report points to some critical shortcomings, like a failure to define essential terms like “emergency,” that contributed to inaction. The 2022 leak, for example, was reported as an “incident” rather than an emergency, and thus did not prompt a more proactive response through the protocols. The report also criticizes the insufficient communication with First Nations.
The communities were notified but not given further updates until the following year, when the release was disclosed as tailings seepage along with news of the second release of 5.3 million litres of contaminated wastewater.
Area First Nations were angry, reports CBC News, after their members harvested in the area for nine months without being told of possible contamination. So were the Regional Municipality of Fort McMurray and water users as far downstream as the Northwest Territories.
“If you actually read the fine print [of Deloitte’s report] and you read what they see as missing, it’s a pretty damning report,” Olszynski said.
A Regulator’s Double Standard
Damning as it may be, Olsgard notes that Deloitte’s investigation was limited to events occurring after May 2022, CP writes.
“They were not being given the authority to go back to 2019, when I think the groundwater was being contaminated.”
Imperial’s actions are also being probed by regulator staff and federal investigators, but Mikisew Cree Chief Tuccaro said the regulator has denied the First Nation’s request for a stop-work order at Kearl. He called that a double standard.
“The Alberta Utilities Commission and the Alberta government had no problem instituting a moratorium on renewable energy projects, but they won’t take simple regulatory measures in the face of a known human and environmental health problem.”
The Athabasca Chipewyan First Nation has called for Ottawa to step in.
“We do not believe that the Kearl leak was an isolated incident, and we do not believe the regulator would inform the public if another incident occurred,” the band said in a statement.
The First Nation also has called for a full technical audit of oil sands tailings facilities as well as a long-term study of health impacts.
Schmidt said Imperial acknowledges its shortcomings.
“We recognize that our communication in the past has not met communities’ expectations and we are working with communities to improve our communications.”
‘Unfortunate But Not Surprising’: Deranger
While the AER has tried to spin the Deloitte report as being critical of procedures and not the regulator itself, Indigenous and civil advocacy groups disagree.
“The findings from the AER are unfortunately not surprising,” said Eriel Deranger, a member of the Athabasca Chipewyan First Nation and executive director of Indigenous Climate Action. “It only affirms that spills, leaks, and overflows are considered acceptable and normal within the Canadian colonial system.”
“Standard ‘business as usual’ holds no consequences for industry,” Deranger added. “It’s the land, waterways ,and the people that are expected to shoulder the consequences for them.”
But the AER’s priority is meant to be to protect people, property, and the environment, Jan Gorski, director of the Pembina Institute’s oil and gas team, said in a statement.
“The AER’s months-long inaction in communicating this incident to Indigenous communities failed to meet that obligation,” Gorski added. “This raises a serious question about the sufficiency of the AER’s existing policies, standards. and procedures.”
The Deloitte report has damaged the AER’s already questionable reputation, leaving it in “tatters of tatters,” Olszynski told Hislop. “I don’t think anybody thinks that [the AER] is a credible regulator anymore.”
First Nation to AER: Time to ‘Lawyer Up’
Athabasca Chipewyan First Nation Chief Allan Adam flatly refused to accept Deloitte’s report, telling APTN News the regulator should “lawyer up and expect a [legal] package by Christmas.”
In a previous lawsuit, oil patch environmental consultant Jessica Ernst sued the Alberta government, petroleum company Encana, and the AER for negligence related to local aquifer contamination near her home. The Supreme Court upheld an immunity clause passed by the provincial legislature that shields the AER from Charter claims or lawsuits.
However, the limitation on liability is not absolute, as it hinges on the regulator’s good faith actions, Olszynski told The Energy Mix in an email.
“I don’t think there is anything in the Deloitte report that absolves [the AER] in this respect,” he wrote. “The AER’s refusal to make that information public certainly lends credibility to concerns that it wasn’t acting in good faith.”
The main body of this report was first published by The Canadian Press on October 2, 2023.