Opinion

Fighting Crime in the Oil Sands

ENERGY & EQUITY: Alberta catches water thief red-handed! Punishment is, um, 'creative.'

By Andrew Nikiforuk, 28 Nov 2011, TheTyee.ca

I will follow the rules blackboard

All water-sucking petro giants, please step to the blackboard.

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Petro states do the wackiest things and Alberta, a hydrocarbon kingdom ruled by one party for 40 years, has produced another creative whopper.

Where else could a big oil company commit a crime and then hand over the fine to its monied lobby group in order to fund an online course on how to not break the law?

In a petro state, keeping it all in the family passes (like flatulence at the dinner table) as subject of both comedy and tragedy.

Now here's the unbelievable tale. Last month, the courts fined Statoil, a petroleum firm owned by the people of Norway (67 per cent), a miserly $190,000 for breaking the law on its controversial oil sands lease, a patch of muskeg and forest bigger than Oslo.

Originally charged with 19 violations of the Water Act by Alberta Environment, the company bargained with the affable petro state and illegalities were whittled down to four prominent misdeeds.

For the record, Statoil publicly admitted to taking more water than it was permitted, stole from ponds and lakes without permission, didn't protect fish and other aquatic life with proper screen intakes, and failed to monitor how much surface water it took. (Good thing water isn't money.)

In total, the company stole more than 3,000 cubic metres of water than actually permitted by law.

In any case, Statoil swears it used the water for legal purposes: drilling and building ice platforms for an operation that now steams bitumen out of the ground. And that's a relief.

Promises, promises

But ironies abound in the case. For starters, Statoil was one of the first companies to point out that Alberta didn't really have a good plan on water availability in the region for steam plants.

The company also promised it would bring a whole new set of ethical standards to the world's messiest energy project when it plunked down $2 billion for an oil sands lease in 2007.

Yet a year later the company was caught breaking the law, and two years later (justice is slow in a petro state) the company pleaded guilty to violating the province's Water Act.

In fact, Statoil now seems intent on abandoning its social democratic reputation in the oil patch altogether. It's championed shale gas plays in the U.S., and last year it sold 40 per cent of its oil sands investment (for $2.2 billion) to the Thai oil giant (PTTEP).

PTTEP is not a model corporate citizen. In 2009, the state-owned company's bad behavior led to Australia's worst offshore oil blowout and spill. The Montara inquiry concluded that company's performance "did not come within a 'bulls roar' of sensible oilfield practice." But no one will probably notice in the oil sands.

Drained of impact

Now you'd think the Alberta government might use corporate fines to fund a scientific groundwater assessment and monitoring program (there isn't one for in situ or steam plant operators), or help build a world class water monitoring program on the Athabasca River. (Even the province and the federal government now agree that the industry-run affair on the Athabasca was, well, full of "inadequacies and limitations.")

But a petro state isn't a rational entity. The Alberta government, which is running a deficit and not terribly fond of environmental science, simply handed the $190,000 fine over to the Canadian Association of Petroleum Producers (CAPP), the aggressive lobbying voice for the nation's $110 billion energy industry.

CAPP, which has spent millions on advertisements to convince the world that bitumen is as healthy as peanut butter, says it will use the money responsibly to teach workers (online, no less) how not to break the law when diverting water from ponds, muskeg and rivers for bitumen production. The secret, says CAPP, is to employ "best practices."

Now that's innovation.

Statoil, of course, is a proud member of CAPP, an organization that once employed Bruce Carson, a convicted fraudster, to organize its national oil sands dialogues. (In an unrelated capacity Carson, a former top policy aide to Prime Minister Stephen Harper, is now under investigation for breaking a whole bunch of lobbying and ethics laws.)

My, how creative

Giving the money to CAPP, of course, takes some balls. It also introduces a new approach to corporate crime-fighting which Alberta calls "creative sentencing."

Imagine, for example, the Alberta model applied to the world's corrupt banking industry. After the U.S. National Credit Union Administration sues Goldman Sachs for risky mortgages, it hands back the money to the association of derivative traders to fund an online ethics course for investment bankers.

Or how about asking an Edmonton crack addict convicted of breaking and entering to take a online course, delivered by the Hell's Angels no less, on how to divert other people's belongings using only "best practices."

But it gets wackier.

As part of the deal, CAPP will host a "learning presentation" with Statoil that "will educate participants on the root causes" of Statoil's illegal water diversions. "Attendance at this presentation may be restricted to members of the oil and gas industry, however representatives from Alberta Environment and Alberta Justice will be permitted to attend."

Well, thank goodness for that.

[Tags: Energy, Environment.] [Tyee]

This is the latest of Andrew Nikiforuk's weekly Energy and Equity column for The Tyee. Nikiforuk is an award-winning author and journalist, and a contributing editor to The Tyee. Read his previous Tyee pieces here.

16 Comments:

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  • Bucketbrigade

    25 weeks ago

    This article is hilarious..

    Canada with the help of Alberta dinosaurs have made Canada a world embarrassment.

    This from the above story says it all.

    "But a petro state isn't a rational entity. The Alberta government, which is running a deficit and not terribly fond of environmental science, simply handed the $190,000 fine over to the Canadian Association of Petroleum Producers (CAPP), the aggressive lobbying voice for the nation's $110 billion energy industry."

    A $110 billion dollar industry and Alberta(and Canada) is running deficits!

    The world in its present form with rising public taxes, austerity measures(slash n burn)can`t survive economically if oil surges back up to $120..to $160 dollars a barrel..

    Africa is starving from skyrocketing fuel costs and food shortages, food inflation in Canada and here in BC have forced shoppers into Shoplifters, seniors and single parents stealing food.

    So if Alberta can only make money, because Corporate tax write offs are too high and the royalty rate is way too low...If Alberta is waiting for $200 dollar per barrel...

    Good luck with that, the world, yes Canada too..

    There is an economic rubic`s cube being played out..

    Markets the way they are structured need ongoing economic growth, but with taxes rises and austerity measures being put in place economic growth won`t happen.

    The TARSANDS are nothing but a money wurlitzer, money in, money out, Alberta finances are going backwards!

    An environmental disaster on a grand scale and when all is said and done Alberta and Canada will be poorer.

    What a sick joke.

    Over to you Stephen madman Harper

  • Fiat lux

    25 weeks ago

    Subject: Tar sands From: To:

    Subject: Tar sands
    From:
    To:
    Cc:

    The tar sands exploitation is itself is one of the biggest crimes on earth today. It really takes good "conservatives" to invent such rackets to "create wealth", while selling the country from under people's feet.

    And so we slide to Hell...

    http://www.guardian.co.uk/environment/2011/nov/27/canada-oil-sands-uk-backing

    Ed Deak.

  • reallife

    25 weeks ago

    A story for Victor Hugo?

    "In total, the company stole more than 3,000 cubic metres..."

    A government of Canada report states that the average charge for clean water delivered to a Canadian residence is "between $0.50-$0.60 per cubic metre". So Statoil was fined $190,000 for stealing between $1500 and $1800 worth of water. Take that you nasty Norwegians!

  • Van Isle

    25 weeks ago

    But but but, I thot we had

    But but but, I thot we had ethical oil here in Canada. What yer saying Andrew is almost too hard to believe.

  • John Z

    25 weeks ago

    Oilsands - Nikiforuk

    3000 cubic meters of water. Without permission. 200 hundred truckloads. Or 100 truckloads ( bigger trucks). Two trucks per week. A lot of water. Deserves a fine. But not much water compared to how much they actually use per year. Water they probably could have gotten permission for, if they had filled the right paperwork.

    They deserve a fine for this, but you are making mountains out of molehills.

  • edward01ca

    25 weeks ago

    We're Becoming a Third World Country

    We're becoming a third world company like Nigeria with all of its pollution from the oil industry. Norway, through its ownership of StatOil, sees nothing wrong with polluting and damagine our country yet would never do it to their own country. The article quoted by Fiat Lux says Britain also feels the same way: destroy another country's envrionment all the while not polluting their own. If that is not colonialism, I don't know what it is. It als seems the the Netherlands and Spain are looking at suppoorting the UK. Old colonial countries as well. We are doomed!!!

  • Fiat lux

    25 weeks ago

    The free movement of

    The free movement of imaginary capital, created from the air, is used as weapons of colonialization, not fought, but supported by the colonial governments.

    The biggest and best criminal racket in human history.

    The difference is that in the past it was the aristocracies of different countries that colonialized other countries, now it is the international corporate mafia conspiring to colonialize and enslave the whole world.

    Called and taught in our universities as "wealth creation".

    Basically the same racket as when the popes of the time "gave" Central and South America to the Portuguese and the Spaniards.

    Ed Deak.

  • tom.boushel

    25 weeks ago

    As we build more prisons for young offenders

    the oil companies are raping and pillaging our environment, killing First Nation's Peoples with unheard of rates of cancer. Yet, they go free. But let some kid scare some middle aged woman in Calgary and see where he ends up. Justice is an illusion. Especially when the lobbyists control our politicians.

  • igbymac

    25 weeks ago

    When will we learn?

    Hate your governance, but don't forget to go vote? You have a choice of capitalist A, B, or C. The irony is bemusing.

    Voting is simply a tool of democracy, and it only works when democracy is present. But we don't have democracy going on. So,at best, voting is the least we can do to effect change and advance democracy. Yet we talk like it's the most important.

    Similarly, our economy exists to serve the fundamental needs of our society: prosperity, security, and stability. But instead of the economy serving us, we have been brought up to serve economic interests. Capitalism 101 - competition. And like every competition, there is only one winner in the end. Have we figured it out yet? (HINT: It isn't ever going to be us.)

    We always seem to have our thinking upside down.

    An aside on the prison comment, above. As our totalitarian government becomes increasingly unglued, the prisons are being constructed to house those posing a threat to its rule. Historically this has been the dissident leaders and intellectuals, to start.

    I think at this juncture the warnings are being fired in a hopeless attempt to quell all speech. We saw it at the G-20 in Toronto where laws were falsified, broken and ignored by the state; while 1100+ people were kettled and then falsely arrested and caged, sending a message to all Canadians to watch their step. Now it's OWS.

    We all have rights in Canada provided we comply with the State and its demands, and we do not want to invoke them.

  • OwlRol

    25 weeks ago

    Corruption & farce

    Sounds like a Shakespearean comedy if it wasn't such a tragedy.

    Where did Elizabethan treasure come from? The Spanish, who had taken it from? Need say no more.

    Yet Spain declined through poor investment, including vast military expenditures. The joy of empire, as the British also eventually learned.

    Norway must see the tar sands as a black gold rush, likewise China, America and the trans nationals. Tough rules and regulations are still to come.

    But unlike Conservative P.M. MacDonald, who sent out the NWMP to set and enforce rules of order (despite later CP corruption), Ottawa now has problems seeing the similarities between Fort McMurray and Fort Whoop Up. Rotgut alcohol or crack & crystal, so long as the furs/bitumen keep coming.

    As 19th. century traders to the Orient lobbied to lift the ban on opium to China (bibles on the other side of the ship), so now the lobbyists spend big bucks to keep that raw, (unethical, source of thinners, amongst other things) toxic bitumen goo flowing.

    Oil politics have long been corrupt (think 1950s Iran or 1980s 90s Nigeria, amongst many others), but this one must be in the top 5.

    Hugo Chavez's, Venezualan oil nationalization has problems, but little compared to this fiasco.

    Perhaps we should add to the comedy (given the shortage of "skilled labour" that these companies will not really help to train) by taking leaders of the drug gangs, making them exchange guns & T shirts for blackberries & suits, take lessons from Mr. Carson and so get Mr. Harper's blessings to improve the pilferring of Canada's ugliest natural resources so as to improve the facade of Canada's "energy superpower" image.

    But "out of sight, out of mind". How many 905 suburban types pay much attention, so long as many can regularly drive their SUVs to work or recreate for little cost, let alone those holiday flights?

  • OwlRol

    25 weeks ago

    Farce & corruption

    Sounds like a Shakespearean comedy if it wasn't such a tragedy.

    Where did Elizabethan treasure come from? The Spanish, who had taken it from? Need say no more.

    Yet Spain declined through poor investment, including vast military expenditures. The joy of empire, as the British also eventually learned.

    Norway must see the tar sands as a black gold rush, likewise China, America and the trans nationals. Tough rules and regulations are still to come.

    But unlike Conservative P.M. MacDonald, who sent out the NWMP to set and enforce rules of order (despite later CP corruption), Ottawa now has problems seeing the similarities between Fort McMurray and Fort Whoop Up. Rotgut alcohol or crack & crystal, so long as the furs/bitumen keep coming.

    As 19th. century traders to the Orient lobbied to lift the ban on opium to China (bibles on the other side of the ship), so now the lobbyists spend big bucks to keep that raw, (unethical, source of thinners, amongst other things) toxic bitumen goo flowing.

    Oil politics have long been corrupt (think 1950s Iran or 1980s 90s Nigeria, amongst many others), but this one must be in the top 5.

  • OwlRol

    25 weeks ago

    Farce cont.

    Hugo Chavez's, Venezuelan oil nationalization has problems, but little compared to this fiasco.

    Perhaps we should add to the comedy (given the shortage of "skilled labour" that these companies will not really help to train) by taking leaders of the drug gangs, making them exchange guns & T shirts for blackberries & suits, take lessons from Mr. Carson and so get Mr. Harper's blessings to improve the pilferring of Canada's ugliest natural resources so as to improve the facade of Canada's "energy superpower" image.

    But "out of sight, out of mind". How many 905 suburban types pay much attention, so long as many can regularly drive their SUVs to work or recreate for little cost, let alone those holiday flights?

  • Granville

    25 weeks ago

    "They aren't so much laws as... guidelines". Haarrrr!

    Thus spake Captain Jack Sparrow as he swashbuckled his way across the screen. Alberta oil companies can do no wrong because they chase the Almighty dollar. Get used to it.

    And we used to wish that power in Ottawa would come to rest on an Albertan's shoulders, just once....

  • pwlg

    24 weeks ago

    Cenovas ad

    Cenovas likes to show the TV audience and movie theatre patrons how little impacts its SAGD development has on the boreal forest habitat in the Fort McMurray area. However, the view they provide in their propaganda advertisement barely shows the plant or the size of the impact on the boreal forest nor the amount of water used nor its emission outputs to the atmosphere.

    SAGD (Steam Assisted Gravity Drainage) uses a lot of water to generate steam to extract the bitumen from the in situ tar sand. In order to produce the steam from the water these plants require large natural gas fired boilers which of course require large quantities of natural gas.

  • Marysue52

    24 weeks ago

    Once again, The Tyee kowtows

    Once again, The Tyee kowtows to Big Oil euphemisms by continuing to call the TAR Sands mere Oil Sands. David Beers should actually go there on a sunny day. I have pictures of what a sunny day looks like around Syncrude. It looks like a tarry night.

  • Marysue52

    24 weeks ago

    It's TAR Sands

    Don't let Big Oil dictate nomenclature. It's TAR Sands. No cowardly euphemisms, please.