Legislature(2009 - 2010)Anch LIO Rm 220

09/27/2010 03:30 PM Senate ENERGY


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03:38:46 PM Start
03:40:58 PM Presentation - "alberta's Clean Energy Future" by Members of the Alberta Legislative Assembly
04:32:49 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Presentation on "Alberta's Clean Energy Future"
by Members of the Alberta Legislative Assembly
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
               SENATE SPECIAL COMMITTEE ON ENERGY                                                                             
                       September 27, 2010                                                                                       
                           3:38 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Chair                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
Senator Albert Kookesh                                                                                                          
Senator Bert Stedman                                                                                                            
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Linda Menard                                                                                                            
Senator Coghill                                                                                                                 
Representative Chris Tuck                                                                                                       
Representative Johnson                                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Presentation - "Alberta's Clean Energy Future" by Members of the                                                                
Alberta Legislative Assembly                                                                                                    
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JEFF JOHNSON, MLA for Athabasca-Red Water                                                                                       
Alberta, Canada                                                                                                                 
POSITION STATEMENT: Participated in presentation of "Alberta's                                                                
clean energy future."                                                                                                           
                                                                                                                                
EVAN BERGER, MLA for Livingstone-McLeod                                                                                         
Parliamentary Assistant to the Minister of Sustainable Resource                                                                 
Development                                                                                                                     
Alberta, Canada                                                                                                                 
POSITION STATEMENT: Participated in presentation of "Alberta's                                                                
clean energy future."                                                                                                           
CAL DALLAS, MLA for Red Deer South                                                                                              
Parliamentary Assistant to the Minister of Environment                                                                          
Alberta, Canada                                                                                                                 
POSITION  STATEMENT: Participated  in presentation  of "Alberta's                                                             
clean energy future."                                                                                                           
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:38:46 PM                                                                                                                    
CHAIR  LESIL  MCGUIRE  called the  Senate  Special  Committee  on                                                             
Energy meeting to order at  3:36 p.m. Senator McGuire was present                                                               
at the call to order.                                                                                                           
                                                                                                                                
                                                                                                                                
 ^Presentation - "Alberta's Clean Energy Future" by members of                                                              
                the Alberta Legislative Assembly                                                                            
                                                                                                                              
3:40:58 PM                                                                                                                    
CO-CHAIR  MCGUIRE  welcomed  the delegation  from  Alberta:  Jeff                                                               
Johnson,  MLA  for  Athabasca-Red  Water; Evan  Berger,  MLA  for                                                               
Livingston McCloud; and  Cal Davis, MLA for Red  Deer South. They                                                               
would present on Alberta's clean  energy future. She said many of                                                               
the Pacific  Northwest Economic Region  (PNWR) members  were able                                                               
to visit the Alberta oil sands in July.                                                                                         
                                                                                                                                
JEFF  JOHNSON, MLA  for Athabasca-Red  Water, Alberta,  said they                                                               
are in town to  take part in the oil and  gas congress with their                                                               
minister of  energy. He  said they spent  the morning  looking at                                                               
the  Fairbanks  cold climate  housing  research  project and  the                                                               
pipeline training center.                                                                                                       
                                                                                                                                
MR. JOHNSON said he knows of  a number of vocal detractors around                                                               
the world  who would  prefer they  shut down  the oil  sands, and                                                               
even shut  down fossil fuels.  Some think they simply  don't care                                                               
about the  environment, but  they do. Canadians  back it  up with                                                               
laws and regulations that they  believe are some of the strictest                                                               
in the world.                                                                                                                   
                                                                                                                                
He  said his  role  as parliamentary  assistant  to the  Treasury                                                               
Board  is  not   just  to  assist  the  minister,   but  to  work                                                               
specifically  on their  oil sands  secretariat, which  is a  body                                                               
within government  that is doing some  coordinating and planning,                                                               
especially  community and  infrastructure  around the  incredible                                                               
growth the oil sands are seeing.                                                                                                
                                                                                                                                
MR.  JOHNSON  said  that  Alberta is  a  secure  and  responsible                                                               
supplier  of energy.  It has  an  abundance of  resources and  is                                                               
committed  to  developing them  as  responsibly  as possible.  No                                                               
other   oil-producing    jurisdiction   in   the    world   takes                                                               
environmental management more seriously than Alberta.                                                                           
                                                                                                                                
He said they are being challenged  to look at the development and                                                               
extraction of  oil in a  more comprehensive manner as  opposed to                                                               
just  the  very  important  economic  rewards  and  environmental                                                               
considerations;  they are  being  pushed to  look  at this  "more                                                               
ethically  and more  comprehensively" along  with adding  a third                                                               
pillar, which  is the socio-political  aspect (ethical  oil), and                                                               
where we  get our oil  across the world.  He would argue  that in                                                               
Alberta no soldiers  are losing their lives over  that oil field,                                                               
and no  money is being invested  there that ends up  in the hands                                                               
of terrorism.  The US and Canada  stack up very well  in terms of                                                               
human rights,  but this  is not  to say  they shouldn't  shift to                                                               
cleaner energy.                                                                                                                 
                                                                                                                                
MR. JOHNSON said  Alberta produces oil because  the world demands                                                               
it;  people will  continue to  rely  on oil  to meet  day to  day                                                               
needs.   But  they   also  recognize   the   importance  of   new                                                               
technologies  and they  are investing  in them.  New technologies                                                               
are  key to  reducing  the environmental  impacts of  production,                                                               
mitigating risk, reducing energy  consumption, advancing the role                                                               
of   renewable  and   alternative   energy,   and  speeding   the                                                               
reclamation  in Alberta's  oil sands  and disturbed  lands across                                                               
their province.  Something that  is not  widely reported  is that                                                               
Alberta is  the number-one supplier  of non-domestic oil  for the                                                               
US, at  17 percent  of the  country's total  imports -  more than                                                               
from Saudi Arabia and Iraq combined.                                                                                            
                                                                                                                                
MR.  JOHNSON said  Alberta is  the only  jurisdiction in  his pie                                                               
chart that is  not a country. Like Alaska, as  an energy producer                                                               
provider,  their  energy  policies will  be  increasingly  coming                                                               
under more  and more scrutiny. This  scrutiny is not a  bad thing                                                               
even  though  it will  not  always  be  balanced and  fair;  it's                                                               
healthy and  they welcome the  challenge. The irony is  that they                                                               
will be under  the microscope because they embrace  the debate as                                                               
a western  democracy. Very few  of the world's top  producers and                                                               
reserves owners permit this debate.                                                                                             
                                                                                                                                
In terms of  energy security, he said they need  to remember that                                                               
each barrel of  oil purchased from Alberta  means less dependence                                                               
on oil  from sometimes unfriendly countries  overseas. But that's                                                               
not the only benefit the oil  sands provides. They are a powerful                                                               
economic driver, not only in Alberta  but in all of Canada and in                                                               
the US,  and this  is at  a time  when North  America desperately                                                               
needs strong economic drivers.                                                                                                  
                                                                                                                                
3:48:36 PM                                                                                                                    
MR.  JOHNSON said  based on  infrastructure development  going on                                                               
north of  Alberta, its oil  and gas sector looks  very promising.                                                               
In  2009 alone,  capital investment  in Alberta's  oil sands  was                                                               
nearly $10 billion and currently  about $140 billion worth of oil                                                               
sands construction  is in  progress or  being proposed  for 2012.                                                               
Alberta is getting  the world's attention with the  oil sands and                                                               
they  are seeing  a dramatic  increase not  only in  the scrutiny                                                               
they are  getting but in terms  of the interest they  are getting                                                               
from  foreign nationals  - like  state owned  oil companies  from                                                               
China, India, Korea, Japan, Middle East, and others.                                                                            
                                                                                                                                
3:49:24 PM                                                                                                                    
Their research  has shown that  every dollar invested in  the oil                                                               
sands creates about  $9 worth of economic  activity and one-third                                                               
of that is  generated outside of Alberta in Canada,  the U.S. and                                                               
around the  world. From 2011-2015  it's estimated that  oil sands                                                               
development  will  create  343,000  person  years  of  employment                                                               
across  the US  alone. Due  to  the job  creation, the  increased                                                               
demand  for American  made  goods  will increase  its  GDP by  an                                                               
average  of $31  billion  annually. He  said  many Americans  are                                                               
already  employed through  existing  contracts  to Alberta's  oil                                                               
sands and that  will only grow. Mr. Johnson said  the question is                                                               
whether security and  the financial benefits come at  the cost of                                                               
the environment, and the answer is, "Absolutely not!                                                                            
                                                                                                                                
3:50:22 PM                                                                                                                    
EVAN  BERGER,   MLA  for  Livingstone-McLeod   and  Parliamentary                                                               
Assistant to  the Minister  of Sustainable  Resource Development,                                                               
continued the  presentation. He  said oil  sands are  a naturally                                                               
occurring mix  of sand, clay,  water and bitumen. The  bitumen is                                                               
separated  from the  sand top  grade  into refinery-ready  crude.                                                               
Each grain of sand is actually  encased in water and then the oil                                                               
wraps around that. So, when you hear  the oil sands are on top of                                                               
the  ground that  means they  are on  top of  the ground  in many                                                               
places. In  other places the oil  flows out of the  sand into the                                                               
Steep Bank  River in one  area where  the river cuts  through the                                                               
sands naturally.                                                                                                                
                                                                                                                                
He  said the  oil sands  are in  northern Alberta,  and currently                                                               
they contain  more than  170 billion  barrels of  recoverable oil                                                               
with  today's technology  (potentially 315  billion barrels  or 3                                                               
million barrels a day for  150 years). This is the second-largest                                                               
proven oil deposit in the world after Saudi Arabia.                                                                             
                                                                                                                                
MR.  BERGER said  they keep  hearing that  the size  of the  land                                                               
disturbed by the oil sands activity  is the size of Florida, some                                                               
have said it  is twice the size  of England, but the  fact is the                                                               
oil sands underlie  over 54,000 square miles of  land in northern                                                               
Alberta and  that is about  the size  of Florida. But  the entire                                                               
minable area  in the oil  sands covers about 1,800  square miles,                                                               
which is  less than  1 percent of  Alberta's forested  area. Only                                                               
232 square  miles have  been disturbed by  oil sands  activity to                                                               
date.                                                                                                                           
                                                                                                                                
MR.  BERGER said  that using  the word  "disturbed" doesn't  mean                                                               
open pit  mines. He  explained that  only 20  percent of  the oil                                                               
sands  are close  enough to  the  surface they  can be  extracted                                                               
through open pit  mining. The other 80 percent will  be "in situ"                                                               
(meaning  in  place) developments,  which  uses  steam to  access                                                               
deposits that are  too deep with a very minimal  footprint to the                                                               
surface. In situ mining, and the  steam brings the bitumen to the                                                               
surface  but leaves  the  sand  in place  under  the ground.  The                                                               
environmental  footprint is  quite  small making  them much  more                                                               
efficient operations.                                                                                                           
                                                                                                                                
3:54:19 PM                                                                                                                    
MR. BERGER  said the  Alberta oil sands  are built  on innovation                                                               
and  that,   in  turn,  fuels   work  and   responsible  resource                                                               
development. However,  there is no oil  sands development without                                                               
emitting CObut   the common  misconception is that developing oil                                                               
           2,                                                                                                                   
from oil sands  results in a much higher  carbon dioxide emission                                                               
than  conventional oil.  However,  when taking  into account  the                                                               
entire  lifecycle  of  a  barrel  of  oil  including  production,                                                               
refining, transportation,  and end use, greenhouse  gas emissions                                                               
from oil sands crude averages 5  percent higher than a variety of                                                               
conventional crudes in  the North American market  place. He said                                                               
his graph  of "well to  wheels" indicated a  competitive position                                                               
among other regions of the world.                                                                                               
                                                                                                                                
Green house  gases from the oil  sands account for 15  percent of                                                               
Alberta's annual emissions;  that is about 5  percent of Canada's                                                               
total emissions.  Canada is 2  percent of the  world's emissions.                                                               
This  means  the oil  sands  produce  less  than one-tenth  of  1                                                               
percent  of global  emissions, but  they are  always looking  for                                                               
better technology.                                                                                                              
                                                                                                                                
3:57:32 PM                                                                                                                    
CAL DALLAS,  MLA for Red  Deer South and  Parliamentary Assistant                                                               
to  the Minister  of Environment,  said Alberta's  climate change                                                               
strategy aims to  reduce their project green  house gas emissions                                                               
by 200 megatons  by 2050. Their carbon capture  and storage (CCS)                                                               
initiative plays a  key role in this strategy and  they expect it                                                               
will help achieve 70 percent  of their target. That is equivalent                                                               
to taking approximately 1 million  vehicles or about one-third of                                                               
all the registered vehicles in Alberta off the road.                                                                            
                                                                                                                                
Alberta has  invested $2 billion  into CCS, a technology  that is                                                               
seen  as  a major  component  for  large  scale green  house  gas                                                               
reductions   by  organizations   such  as   the  United   Nations                                                               
Intergovernmental  Panel  on  Climate  Change.  Outside  of  CCS,                                                               
Alberta is  the first  jurisdiction in  North America  to require                                                               
large industry  such as at  the oil  sands to reduce  green house                                                               
gases. Through options that include  reducing their emissions and                                                               
paying into  a technology  fund, industry  has reduced  more than                                                               
1,700 million tons  of green house gases. They  paid $187 million                                                               
into  a clean  energy fund  and  invested $71  into clean  energy                                                               
projects.                                                                                                                       
                                                                                                                                
MR.  DALLAS also  said  that Alberta  has  strict legislation  in                                                               
place to  protect its air,  water and  land. For those  living in                                                               
the oil sands region  air quality is a big concern  and it is the                                                               
most heavily monitored region for  air quality. There are 15 real                                                               
time stations that  are at work 24/365.  Alberta's air monitoring                                                               
tells them  that the  air quality in  Fort McMurray  rates better                                                               
than major  Canadian cities  like Toronto  or Vancouver.  Using a                                                               
more  specific measurement,  air quality  is rated  as good  more                                                               
than  95 percent  of  the  time based  on  Alberta's air  quality                                                               
index.                                                                                                                          
                                                                                                                                
MR. DALLAS said  that water use is strictly regulated  in the oil                                                               
sands  and it  is  constantly monitored.  Some  believe that  oil                                                               
sands projects  are using  nothing but  fresh drinkable  water to                                                               
extract  bitumen,   but  in  fact,  oil   sands  developers  have                                                               
drastically reduced their need to  draw fresh water. He explained                                                               
that water users have permission  to withdraw a combined total of                                                               
3 percent  of the  water flow of  the Athabasca  River, Alberta's                                                               
longest river;  2 percent of  that is  allocated to the  oil sand                                                               
operations and  most water users  don't withdraw their  limit. In                                                               
fact, less than 1 percent of the water is used.                                                                                 
                                                                                                                                
4:01:05 PM                                                                                                                    
Restricting  industrial  water  withdrawals might  sound  like  a                                                               
major obstacle  to oil sand  operators, but most have  found ways                                                               
to reuse and recycle water  and some projects are recycling 80-95                                                               
percent  of  the  water  they use.  Tailings  ponds  are  another                                                               
challenge.  Tailings  are  a by-product  from  oil  sands  mining                                                               
operations where water  is used to extract bitumen  from the rest                                                               
of the  ore. Tailings are a  mix of sand, clay,  small amounts of                                                               
bitumen and  naphtha. The ponds serve  as a place for  the solids                                                               
and the  water to settle  out of mix.  This is a  common industry                                                               
practice in various  mining operations. While a  large portion of                                                               
the tailings  can be settled  out quickly, some  smaller portions                                                               
such as those  containing fine clays in solution can  take a very                                                               
long time.                                                                                                                      
                                                                                                                                
New  tailings  management  technologies  and  polices  are  being                                                               
developed that  will shorten  the lifespan of  ponds to  10 years                                                               
and maybe less.  The potential to eliminate wet  tailings is also                                                               
backed   by  a   directive   from   Alberta's  Energy   Resources                                                               
Conservation Board.  It provides  performance criteria  that will                                                               
result in faster  reclamation and reduced fluid  tailings. So far                                                               
oil  sands operators  have committed  more than  $1.5 billion  in                                                               
upgrades  to comply  with this  directive. In  the meantime,  Mr.                                                               
Dallas said,  Alberta has multiple  checks and balances  in place                                                               
to manage  tailings pond. They  must have extensive  ground water                                                               
monitoring systems and effective seepage capture facilities.                                                                    
                                                                                                                                
MR. DALLAS  said that  reclamation is the  law in  Alberta. Every                                                               
square  inch  of  disturbed  land  must  become  as  ecologically                                                               
productive as  it was  before development.  It can  take decades,                                                               
but they  are working to speed  things up by encouraging  the use                                                               
of   progressive  reclamation   process  where   industry  begins                                                               
reclamation work on a site  before operations are complete. As of                                                               
December 2008, industry  has reclaimed almost 42  square miles of                                                               
land.   Government  has   issued  its   first  pond   reclamation                                                               
certificate to  Syncrude in  2008 for the  reclamation of  a 256-                                                               
acre site  called Gateway  Hill where  buffaloes now  graze. Last                                                               
year  Suncor  [Energy] announced  it  was  the first  company  in                                                               
Alberta to successfully reclaim a 1.3 square-mile tailings pond.                                                                
                                                                                                                                
MR.   DALLAS  said   their  challenge   is   to  balance   energy                                                               
development,   the  resulting   environmental  impacts   and  the                                                               
economy;  and they  will achieve  this by  establishing realistic                                                               
targets  and  policies   that  continually  reduce  environmental                                                               
impacts of development while investing in clean energy research.                                                                
                                                                                                                                
CHAIR MCGUIRE thanked him for his presentation.                                                                                 
                                                                                                                                
4:05:55 PM                                                                                                                    
REPRESENTATIVE  CRAIG  JOHNSON  asked  where the  $2  billion  in                                                               
carbon capture funds came from.                                                                                                 
                                                                                                                                
MR.  DALLAS  answered that  the  entire  fund came  from  general                                                               
revenues that he presumed resulted  from royalty payments related                                                               
to  resource extraction.  It was  provincial allocation  only and                                                               
the expenditures were restricted by  legislation to engage in CCS                                                               
technologies.                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON  asked what he thought  the response would                                                               
have been if the money came from gas taxes.                                                                                     
                                                                                                                                
MR.  DALLAS replied  that he  could  only speculate,  but as  the                                                               
owners of world's second largest  proven reserve of hydrocarbons,                                                               
it  was  necessary  to  make   a  very  serious  statement  about                                                               
environmental stewardship and the  impact the extraction of those                                                               
resources  would   have  on  green   house  gas   potential.  The                                                               
investment  has been  well received  so far  and even  though the                                                               
benefits will  take a long  time to reap, the  opportunities they                                                               
have  been  exploring with  that  fund  are significant  in  many                                                               
respects  -  for  instance,  capturing  COin    their  electrical                                                               
                                          2                                                                                     
generation facilities  and opportunities to  enhance conventional                                                               
oil  and gas  recovery  through the  use  of CO   back down  hole                                                               
                                               2                                                                                
development. It's not just about the mitigation of CO,  but about                                                               
                                                     2                                                                          
other  real  business  opportunities   outside  of  the  resource                                                               
extraction.                                                                                                                     
                                                                                                                                
4:09:53 PM                                                                                                                    
SENATOR MENARD asked how long  the Athabasca River is as compared                                                               
to the  Kenai River.  She also  wanted to know  what some  of the                                                               
more important  questions were  at the  climate change  summit in                                                               
Copenhagen on  oil sands. She  heard that  it was a  failure, but                                                               
she wanted  to know if he  thought it was successful  in terms of                                                               
sharing his innovations.                                                                                                        
                                                                                                                                
4:11:20 PM                                                                                                                    
MR. BERGER  answered that one-third  of the Athabasca  River runs                                                               
through Alberta before it goes  through the Northwest Territories                                                               
and out  to the ocean.  Regarding the climate change  summit, Mr.                                                               
Berger  said that  the Minister  of Environment,  who represented                                                               
them at  Copenhagen, was able to  put the facts on  the table and                                                               
rebut  some  of the  misinformation  that  was there.  Two  other                                                               
provinces  made  comments  on  the   oil  sands,  but  they  both                                                               
retracted them  after the meeting  and getting  more information.                                                               
In general,  it was an opportunity  for Alberta to clear  the air                                                               
on the oil sands situation.                                                                                                     
                                                                                                                                
4:14:18 PM                                                                                                                    
REPRESENTATIVE  JOHNSON mentioned  he  was  anticipating a  $140-                                                               
billion investment through  2012, and asked if the  oil sands had                                                               
been in development for eight years.                                                                                            
                                                                                                                                
MR. BERGER replied no; it's more  like 40 years. The $140 billion                                                               
is for some of the new  projects coming on going forward; in 2009                                                               
those investments added up to $10 billion.                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON asked what they  did as a legislative body                                                               
to incent that investment.                                                                                                      
                                                                                                                                
MR. BERGER  replied that a  big part of  the change is  that they                                                               
are  undergoing  a  regulatory  review  of  sustainable  resource                                                               
development, energy  and environment  - putting  them all  on the                                                               
table  and saying  they want  the process  to be  environmentally                                                               
sound,  but they  want  it  with no  huge  delays.  They want  to                                                               
streamline  the application  process  by  having applications  go                                                               
through a  "one window  shopping type  thing" where  an applicant                                                               
comes into the Energy Resources  Conservation Board (ERCB) as the                                                               
regulator and that application is  transferred through all of the                                                               
other regulatory departments that have  to see it. Another reason                                                               
for  the increase  is that  bitumen has  moved up  closer in  the                                                               
spread  to West  Texas intermediate.  And a  significant pipeline                                                               
network is  getting better all  the time -  to connect it  to the                                                               
market.  The combination  of all  those things  has brought  more                                                               
investment forward for the oil sands.                                                                                           
                                                                                                                                
REPRESENTATIVE JOHNSON asked if their tax regime was changed.                                                                   
                                                                                                                                
CHAIR MCGUIRE said that Senator  Thomas joined the committee some                                                               
time ago, as did Senator Coghill.                                                                                               
                                                                                                                                
4:19:28 PM                                                                                                                    
MR.  JOHNSON answered  that the  $10 billion  is what  would have                                                               
been invested  roughly in 2009,  but they have to  recognize that                                                               
the oil  sands projects are  massive and  take a lot  of capital.                                                               
It's not uncommon  for one project to take $5-$10  billion and 10                                                               
years  to construct.  To put  that  in perspective,  in 2008  1.3                                                               
million  barrels per  year were  being  produced out  of the  oil                                                               
sands and  now they are  at 1.5 million/day. The  projections are                                                               
to  move  to 6  million  barrels  per  day  over the  next  three                                                               
decades.                                                                                                                        
                                                                                                                                
He added that  another incentive for investment in  the oil sands                                                               
is Canada's  royalty structure  that allows  some of  the capital                                                               
costs to  be recovered  before royalties are  paid. He  said last                                                               
year  was the  first  year  that the  oil  sands royalty  revenue                                                               
surpassed royalty  from natural gas  (which was always  their big                                                               
money ticket) and conventional gas  combined. He said that Canada                                                               
is  fortunate in  that  they  are a  western  democracy that  has                                                               
investable  oil reserves;  most private  companies don't  want to                                                               
invest  in   some  other  countries   with  different   types  of                                                               
governments.                                                                                                                    
                                                                                                                                
SENATOR THOMAS asked him to  clarify how the settling ponds would                                                               
affect the river.                                                                                                               
                                                                                                                                
4:21:14 PM                                                                                                                    
MR.  DALLAS said  the Athabasca  River  is just  under 800  miles                                                               
long. He  said that  none of  the tailing  ponds from  the mining                                                               
operations have  a discharge or  seepage back into  the Athabasca                                                               
River. One  tailing pond  he is  familiar with  has more  than 70                                                               
monitoring wells  around the circumference. Any  migration of any                                                               
material is closely  monitored. The ponds are  engineered to seep                                                               
and then  the recovery  component gets  pumped back  in. Vertical                                                               
migration  is measured  as a  function of  millimeters per  year.                                                               
Because  the Athabasca  River runs  through this  bitumen-bearing                                                               
geology  deposit,   those  same  hydrocarbon  materials   can  be                                                               
detected in the  water; and run off - not  from mining operations                                                               
-  but  all  along  the   river  through  the  oil  sands  region                                                               
potentially contribute to some of  the measurable components that                                                               
are in those  water tests. In the last few  days, the Minister of                                                               
Environment announced  an independent  panel of  scientists would                                                               
peer review  both the measuring  capacity of  government measured                                                               
water quality and some of  the independent measurements that have                                                               
taken place.  Quality of  that river is  taken very  seriously by                                                               
Albertans,  especially by  inhabitants that  are downstream  from                                                               
the mining operations.                                                                                                          
                                                                                                                                
4:25:31 PM                                                                                                                    
SENATOR  THOMAS  asked  if  all taxes  are  suspended  until  the                                                               
investment is recovered or just the royalty taxes.                                                                              
                                                                                                                                
MR.  DALLAS  replied  the  there  were  no  changes  to  the  tax                                                               
structure either  in 2008  or the  recent restructuring  that was                                                               
made just  a number  of months  ago, and  they are  talking about                                                               
royalty  payments  based  on  the  extraction  and  sale  of  the                                                               
resource as  opposed to  what they  would think  of as  an income                                                               
tax.  The tax  regime  is the  same  both from  a  federal and  a                                                               
provincial jurisdiction.                                                                                                        
                                                                                                                                
He elaborated that  commitments have been made  to Albertans that                                                               
without compromising  environmental or social outcome,  they will                                                               
review policy  assurance and improve  on the time  performance of                                                               
the  approval  process.  This review  is  called  the  Regulatory                                                               
Enhancement Project  and is  being done  by Emily  Berger, Dianna                                                               
McQueen and himself.                                                                                                            
                                                                                                                                
4:27:45 PM                                                                                                                    
SENATOR THOMAS  asked if  the regulatory  changes they  made were                                                               
more  like streamlining  the system  and  he asked  how that  was                                                               
done. Did they get input from industry?                                                                                         
                                                                                                                                
MR.  DALLAS  replied that  there  were  two different  pieces  of                                                               
business. The  initial one was  around refinement of  the royalty                                                               
regime.  Their  government  engaged  industry  in  a  very  frank                                                               
dialogue  about  each  of  the   different  types  of  geological                                                               
formations and the different  conventional and unconventional oil                                                               
and  gas   plays  that  are   available.  They  had   "very  good                                                               
disclosure" by industry in terms  of the economics of production,                                                               
and the government  of Alberta had a "good  discussion" about the                                                               
interests of Albertans in terms  of fairness because the resource                                                               
belongs to  all Albertans.  Considerable trust  was built  in the                                                               
initial  discussions.  This  very   frank  dialogue  resulted  in                                                               
changes that not only satisfied  industry but Albertans, as well,                                                               
with the industry's willingness to invest.                                                                                      
                                                                                                                                
For  the  second  piece  of   work  involved  in  the  regulatory                                                               
enhancement  project, he  said not  only have  they been  working                                                               
with  industry through  their  major  associations including  the                                                               
Canadian   Association   of   Petroleum  Producers,   but   other                                                               
stakeholders  -   landowners,  First   Nation  Groups,   and  the                                                               
government of Alberta.                                                                                                          
                                                                                                                                
CHAIR  MCGUIRE  recognized  Jennifer  Lowden  with  the  Canadian                                                               
Council. She then  asked if he had updates on  the McKenzie Delta                                                               
pipeline and from the AGIA-led pipeline - from his perspective.                                                                 
                                                                                                                                
MR. BERGER said  he didn't have a specific answer  right now, but                                                               
as partners in  the energy industry, it's in  their best interest                                                               
to work collaboratively  with Alaska and their  other partners to                                                               
facilitate what they  can for movement of  product. That benefits                                                               
everyone in the end.                                                                                                            
                                                                                                                                
4:32:49 PM                                                                                                                    
CHAIR MCGUIRE  said "keep  us posted,"  and thanked  everyone for                                                               
being there; she adjourned the meeting at 4:32 p.m.                                                                             

Document Name Date/Time Subjects
Alberta MLA Presentation.pdf SENE 9/27/2010 3:30:00 PM