AER, Imperial ignored ‘early warning system’ for years before Kearl 2022 leak, say experts

“We have no confidence in the AER or the Government of Alberta to investigate this incident or prevent another one from happening.” – Athabasca Chipewyan First Nation

Regulatory failure, not poor communications, is the real issue behind two recent incidents at Imperial Oil’s Kearl oil sands plant, say Indigenous leaders. They are calling for the Alberta Energy Regulator (AER) to be scrapped. A new federal/provincial/Indigenous-led agency would be created to oversee the oil sands, Canada’s largest industrial operation.

A Deloitte report commissioned by the AER found that it followed policies and procedures when responding to a Kearl tailings pond leak discovered in May, 2022 that was not publicly disclosed until nine months later. Experts, however, say the report ignores the most important aspect of the incident: that the company and the AER had data in years prior that showed something was wrong and dismissed Indigenous community concerns.

“The AER has had data showing seepage from ponds for years and confirming seepage moving beyond the seepage interception systems, but has taken no action,” Chief Billy-Joe Tuccaro of the Mikisew Cree First Nation told the House of Commons Standing Committee on Environment and Sustainable Development on April 17, 2023.

The presence of chemicals in the seepage and changes in the volume of seepage are not, of themselves, the cause of the 2022 leak. But they are a sign that something was wrong, says independent environmental scientist Dr. William Donahue, who has held several executive positions with oil sands monitoring agencies. 

“The point of paying attention to chemical data from groundwater monitoring wells is that it’s supposed to be an early-warning system of significant problems rather than just a box-checking exercise that industry has done the monitoring and filed the required reports,” he said.

“The simple existence of the exceedances (of government guidelines) and their worsening over time are themselves signs of a significant problem and an indication that there is a major groundwater plume of escaping tailings that is contaminating the shallow groundwater and moving out from the tailings pond at significant rates.”

Had the AER or Imperial investigated more closely, Donahue believes, they might have spotted the problem that caused the 2022 leak.

Former AER senior toxicologist Mandy Olsgard says the company and the regulator knew there were issues with higher chemical concentrations being found in greater volumes of seepage in more monitoring wells. A regional well outside the Kearl site also detected exceedances of toxic tailings pond chemicals.

“The quality of groundwater below tailings ponds has deteriorated over time. Concentrations of chemicals are increasing,” she said on the Energi Talks podcast. “We know this because it’s self-reported by industry to the AER in annual groundwater monitoring reports. I looked at the groundwater below Kearl’s tailings ponds, and I saw some alarming trends with incidents and regulatory non-compliance. We’re not seeing that communicated externally.”

Kearl is located 70 kilometres north of Fort McMurray.

Untangling the issues

Understanding the importance of what happened with the Kearl tailings pond is complicated by the AER including two incidents – the 2022 seepage leak and a February, 2023 5.3 million litre spill of industrial wastewater from a holding pond – in a single environmental protection order.

That seepage leak needs to be separated into two further issues: last year’s release to surface caused by a system failure near the tailings pond and the long-term problems with growing chemical concentrations in ever higher volumes of seepage detected at more and more monitoring wells over time. The latter includes seepage that migrated off the Kearl site. The issues are related, but distinct.

Experts interviewed by Energi Media say that if the regulator had investigated earlier, when Imperial’s annual ground monitoring reports showed “exceedances” of toxic chemical guidelines, the cause of the 2022 leak might have been discovered in time to prevent it.

The Deloitte report

Much of the reporting about the incident has focused on community outrage that for nine months neither the company nor the regulator informed the communities downstream of the Kearl oil sands operation about the leak. Imperial says notice was provided one time to the environmental committees of the Indigenous governments, but not leadership. Both the AER and the company have publicly apologized for poor communications.

“I am deeply apologetic for what has happened at Kearl,” Imperial CEO Brad Corson told the Standing Committee on April 21. “We are committed to correcting this situation and ensuring it does not happen again.”

“[T]he first communication should come from the producer. It should come from, in this case, Imperial,” AER CEO Laurie Pushor told the Standing Committee on April 24. “Not withstanding what the rules are, what the procedures are, it is clear that we did not meet community expectations in this case.”

The AER commissioned Deloitte to review its performance after the leak was discovered. The consultancy found that the AER followed its policies and procedures, though some were outdated and not consistent with industry best practices. The AER board has accepted Deloitte’s recommendations for updating those policies and procedures.

Critics say the Deloitte report was little more than a PR exercise, with its terms of reference carefully crafted to avoid substantive fault.

“We could have written the report for them,” Chief Tuccaro told the Canadian Press. “It’s all stuff that’s simple and should have been fixed long ago.”

“The report was framed and scoped in such a way as to avoid answering the really important stuff,” says Martin Olyszinski, environmental law professor at the University of Calgary. The “really important stuff” happened prior to the 2022 incident, he added.

Dr. Monique Dube was the AER’s Chief Environmental Scientist from 2014 to 2017. She says that key concerns, like tailings pond leaks and groundwater monitoring, were identified as early as 2007 during Kearl’s joint review panel process. 

“Were those concerns then transitioned into approvals for Imperial Kearl? Were they transitioned into heightened expectations of performance in approvals to align with policy objectives of the government of Alberta?” she asks. “No, they were not. Who holds the responsibility for the follow up?

The Deloitte report does not directly address this issue, but Indigenous leaders are clear about who is responsible: the AER. Protecting the public interest – their traditional territories and the ecosystems that supply water and food while supporting their culture – has been subverted, they say, by a far too cozy relationship with the oil companies.

“The AER is not a serious or internationally recognized environmental regulator,” said Allan Adam, chief of the Athabasca Chipewyan First Nation, in a press release. “It is captured by industry and overseen by a political class that doesn’t care about the consequences to northern and Indigenous residents…”

“Alberta is very transactional, very transactional,” says Dube. “As a regulatory body, you have to be more than than transactional.”

The final straw

Was Kearl an accident, unfortunate but a one-off and unlikely to be repeated? Or was it another sign of regulatory failure on the part of the AER? Indigenous leaders say unequivocally that it is the latter.

Indigenous leaders are demanding a radically different approach to oil sands regulation. In addition to a new regulator, also on their agenda is a full geotechnical audit of all oil sands tailings facilities and a longitudinal health study of Peace-Athabasca Delta residents.

“We don’t believe that the Kearl leak was an isolated incident and we do not believe the AER would inform the public if another incident occurred,” the Athabasca Chipewyan First Nation said in a September 27 release.

“Kearl is the straw that broke the camel’s back,” says Dan Stuckless, director of the Mackay Metis Sustainability Centre.

In subsequent columns, Energi Media will investigate Indigenous allegations about the AER and operations at the Kearl plant.

Neither the AER nor Imperial responded to Energi Media requests for interviews and comment.

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