News Release 2010-09-20

 

News Release 2010-09-20

News Release 2010-09-20 (NR2010-13)

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ERCB conditionally approves tailings plans for Shell Muskeg river project

For immediate release

Calgary, Alberta (Sep 20, 2010)… Following a rigorous technical review, the Energy Resources Conservation Board (ERCB) has conditionally approved the tailings management plan for Shell Canada’s Muskeg River project submitted under Directive 074: Tailings Performance Criteria and Requirements for Oil Sands Mining Schemes. Over the life of the plan, the company will have cumulatively exceeded Directive 074 total fines capture requirements.

The ERCB has approved the Muskeg River tailings plan with eight conditions (see attached backgrounder). The Muskeg River tailings plan includes the construction of a Consolidated Tailings plant which will begin operating in 2012. Until the new Tailings Plant is operational, Shell will not be able to achieve the ERCB’s annual fine tailings reduction requirements. From the year 2013 onwards, the ERCB has directed Shell to exceed the Directive 074 annual fine tailings reduction requirements in order to achieve a cumulative overall fine tailings reduction that is equal to or exceeds Directive 074 requirements by no later than year-end 2017.

The Muskeg River project, located 70 km north of Fort McMurray, involves five fluid tailings ponds, which are scheduled to be decommissioned in 2015, 2018, 2019, 2038, and 2049.

The ERCB is currently reviewing two remaining tailings plan submitted by Shell for its Jackpine project and Canadian Natural Resources Limited for its Horizon project.

Thus far, oil sands operators have committed more than $2 billion in upgrades to comply with the Directive.

The ERCB conducts thorough technical reviews of each tailings plan and works with the operators to ensure every operator is taking all possible actions to meet the requirements of Directive 74 while considering each project’s specific geological and technical requirements.

Directive 074: Tailings Performance Criteria and Requirements for Oil Sands Mining Schemes requires operators to prepare tailings plans and report on tailings ponds annually, reduce fluid tailings through fines captured in dedicated disposal areas, and convert fines into trafficable deposits which are ready for reclamation five years after deposits have ceased.

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For more information, please contact:

Bob Curran, ERCB Communications
Phone: 403-297-3392
E-mail: Bob.Curran@ercb.ca
Media line: 1-855-474-6356

NR2010-13

Backgrounder

Conditions on Shell Muskeg River Approval
  1. Shell shall:
    1. adhere to the following milestones for the development of the Atmospheric Fines Drying (AFD) or other alternative technologies unless otherwise approved by the Board and must notify the Board immediately of any anticipated milestone delays of two months or greater:
      1. September 30, 2010 – Start up of phase 1 of trial AFD area
      2. June 30, 2011 – Start up of phase 2 of trial AFD area.
      3. June 30, 2013 – Start up of commercial operation of alternative fines treatment technology.
      4. submit as part of the annual Directive 074 Tailings Plan submission to the ERCB, annual AFD updates that include
        1. progress reports of construction and commissioning
        2. a chronological description of all activities and operations conducted to date,
        3. detailed process flow diagrams and material balances, and
        4. any other information formally requested by the Board.
    2. Shell shall:
      1. construct and operate the Consolidated Tailings (CT) Facility by May 31, 2012 unless otherwise approved by the Board and must notify the Board immediately of any schedule delays of two months or greater.
      2. submit as part of the annual Directive 074 Tailings Plan submission to the ERCB, annual CT updates that include
        1. progress reports of construction and commissioning
        2. a chronological description of all activities and operations conducted to date,
        3. detailed process flow diagrams and material balances, and
        4. any other information formally requested by the Board.
    3. Fines capture as defined in Directive 074 at the Muskeg River Mine site shall, on a calendar year basis, meet or exceed 4% for 2010, 13% for 2011, 34% for 2012 and 50% annually thereafter unless otherwise approved by the Board.
    4. Shell shall achieve a cumulative fines capture equivalent to the Directive 074 requirements by no later than December 31, 2017 unless otherwise approved by the Board.
    5. Shell shall:
      1. Submit for Board approval the Non-Segregating Tailings facility construction milestones by June 30, 2011 and shall immediately thereafter notify the Board of any milestone delays of two months or greater.
      2. Submit the detailed engineering design for the commercial scale Non-Segregating Tailings Facility to the ERCB by September 30, 2017 or such other date approved by the Board.
    6. Shell shall submit updated measurement plans for Board approval by November 30, 2010 unless otherwise approved by the Board.
    7. Shell shall submit, with the annual Directive 074 Tailings Plan submission to the ERCB, annual updates on the commercial scale Non-Segregating Tailings technology developments including information on testing (compilation and analysis of any test data) and construction schedule.
    8. Shell shall formally notify the ERCB of pilot plants, field pilot tests and/or demonstration plants for all tailings technology development at least 6 months prior to construction and provide the test reports to the satisfaction of the ERCB annually by February 28 or as specified by the ERCB.
    Directive 074: Tailings Performance Criteria and Requirements for Oil Sands Mining Schemes
    • Directive 074 requires operators to:
      • Prepare tailings plans and report on tailings ponds annually,
      • Reduce the accumulation of tailings by capturing fine particles, that would otherwise remain suspended in tailings ponds ,and placing them in a deposit that can be walked on and,
      • Specify dates for construction, use and closure of tailings ponds and file these dates with the ERCB by September 30, 2009.
    • The submission of the tailings plan is an annual requirement of Directive 074, which will allow the ERCB to continuously monitor tailings operations and provide a means to take enforcement action when necessary. Compliance with the two main Directive 074 criteria (fines capture and DDA strength) is to be measured by companies annually starting in 2011. Additional reporting is required on the fluid tailings content of each pond annually and is scheduled to be submitted along with the annual tailings plan to the ERCB by September 30 of each year.
    • The ERCB is attempting to allow oil sands operators sufficient time to design and construct necessary industrial facilities (some costing hundreds of millions of dollars) which take into account each project’s specific geological and technical requirements in order for them to comply with Directive 074 requirements.
    • All of the plans are available on the ERCB website at www.ercb.ca
    General Information
    • “Tailings” is a term used to describe waste from oil sands extraction processes. This waste is generally composed of water, sands, silt, clay and residual bitumen.
    • Tailings are discharged into large tailings ponds. The larger sand particles in the tailings settle to form a stable deposit very quickly, while the finer clay particles take years to settle and are known as fluid fine tailings. Research on ways to treat fluid fine tailings continues, with the goal of developing technology that will help the fine clays settle quicker or eliminate the need for storage ponds altogether.
    • In past applications, mineable oils sands operators proposed the conversion of fluid tailings into deposits that could be walked on and ready for reclamation. While operators have applied technologies to try and make this happen, they have not met the targets set out in their applications.
    • Alberta’s inventory of fluid fine tailings that require long term containment is now 840 million cubic metres. The ERCB estimates tailings ponds today are approximately 170 sq km.