Boondoggles in the Boreal

Abandoned mines, oil and gas wells pollute our boreal forest
May 1, 2011

A mid-March report -- A Forest of Blue: Canada’s Boreal Forest, the World’s Waterkeeper -- focuses on the health of our vast northern forest ecosystem, which covers 60% of Canada’s land mass. Issued by the Pew Environment Group (a U.S. organization not without controversy in Canada), the study has nonetheless been endorsed by the International Boreal Conservation Science Panel, whose 14 academics include eight of Canada’s most highly respected scientists, such as Dr. David Schindler of the University of Alberta.

The Science Panel has called the boreal a “global treasure” that stabilizes climate, stores carbon, and supports ocean health, among other valuable contributions that amount to about $700 billion per year in services provided (see box). But, as the scientists wrote in their March 16 Open Letter, “Unfortunately, Canada’s boreal forest wetlands and waterways are increasingly affected by a growing footprint of industrial natural resource extraction activities that could degrade the ability of the boreal to provide clean water and its many other ecological values.”

The focus here will be on two little-known threats to the boreal briefly mentioned in the report: 1) abandoned mines, and 2) abandoned oil and gas wells. Think of them as the toxic bootprint left behind in the boreal.


Abandoned Mines

There are more than 10,000 abandoned mines across Canada -- some 7,000 of them in the boreal. Even decades later, they continue to leak toxic byproducts (generally referred to as acid mine drainage) into the surrounding area. According to A Forest of Blue, “More than 3,000 of the abandoned mines [in the boreal] are within one kilometre (0.62 miles) of a lake, river, or stream.”

As an example, the report cites “the recently closed Giant Mine near Yellowknife, Northwest Territories, [which] has more than 200,000 tonnes of arsenic dust in its underground chambers and will require hundreds of millions of dollars to remove or stabilize it to prevent contamination of nearby Great Slave Lake.”

The Mining Association of Canada (MAC) has taken issue with A Forest of Blue. According to MAC’s press release of March 23, “The errors and omissions in the report are of great concern to MAC in that they may lead readers to incorrect conclusions, said Gordon Peeling, President and CEO of MAC.”

Referring to abandoned mines, MAC’s press release continues: “It is true that orphaned and abandoned mines exist across Canada. For this reason, the mining industry, through MAC and the Prospectors and Developers of Canada, joined with MiningWatch Canada and other non-government organizations, several government departments, and Aboriginal Canadians to form the multi-stakeholder National Orphaned and Abandoned Mines Initiative (NOAMI). Created in 2002, NOAMI reports to the mines ministers of Canada, and makes recommendations for collaborative implementation of remedial programs for orphaned and abandoned mines across Canada.”

But what the Mining Association of Canada doesn’t say is that most of the cost of the remediation for abandoned mines is paid for by Canadian taxpayers.


Subsidies to Mining

The 1998-2008 federal Mining Sector Performance Report states: “Abandoned mines represent a liability to the Crown. Three provincial and federal Auditor-General reports highlighted the liability of contaminated sites: $180 million in British Columbia, $555 million in the three territories, and $70 million in Manitoba.”

Between 1999 and 2008, Ontario spent $88 million on rehabilitating the highest priority mine sites. Quebec is cleaning up 45 contaminated mining sites at a cost of $320 million. Newfoundland and Labrador has spent $34 million on mine rehabilitation since 2000.

“While the exact number of orphaned or abandoned mines reclaimed during the last decade is not known,” says the federal report, “Canada’s federal, provincial, and territorial governments spent close to $1 billion since 2002 to manage these sites and prevent new ones.”

That’s an extremely generous subsidy to a mining sector that takes in billions per year in profits, leaving the rest of us to pay for cleaning up their historic mess. And that $1 billion doesn’t include the other generous federal subsidies – estimated at well over $380 million per year – that Canadian taxpayers give to the hard-rock mining industry.

The taxpayer largesse, however, doesn’t end there. According to Probe International’s Patricia Adams (Financial Post, Jan. 27, 2011), Export Development Canada “annually provides the mining industry with more than $20 billion in subsidized finance and insurance.”


Abandoned Oil and Gas Wells

A Forest of Blue states: “Over 155,000 active and 117,000 abandoned oil and gas wells exist in Canada’s boreal forest, with 87% of them falling within five km (3.1 miles) of a river or lake.” Abandoned wells leak oil, brine, wastewater, and greenhouse gases into the environment on a continual basis. The minimum cost to remediate one natural-gas well site is about $100,000.

Although industry talks about “permanently capping” a well, there is no known technology for securely doing so. As Terry Tamminen, author of Lives Per Gallon: The True Cost of Our Oil Addiction, puts it, “We’ve gotten really sophisticated at drilling deep wells, but the same attention has not been placed on plugging wells. Look at what happened when we tried to plug Deepwater Horizon. Nothing was working. The very best minds in the oil world were on this problem and they were making it up as they went along.”

Even in so-called “properly-capped” oil and gas wells on land, the cement plugs can fail over decades – cracking, shrinking, shifting - and metal casing that lines the wells can rust. These failures allow a variety of toxins to continually leak into the environment.

This is not just a problem in Canada. During the Deepwater Horizon oil spill crisis last summer, an Associated Press investigation found that there are 27,000 abandoned oil wells in the Gulf of Mexico – each a potential source of leaking toxins. A subsequent investigation by found that, across the U.S. landmass, there are “at minimum 2.5 million abandoned oil and gas wells, none permanently capped” and “more than 20 million” abandoned oil and gas wells worldwide, each one “an environmental disaster waiting to happen.”

Canada’s 117,000 abandoned oil and gas wells are slowly poisoning the boreal, and in many cases there is no clear responsibility for them. Indeed, on March 2, PostMedia News’ Mike De Souza reported that the Harper government (if elected) intends to cut $1.6 billion from its environmental initiatives, including $19.5 million from an action plan to deal with contaminated sites.


Oil and Gas Subsidies

In March 2011, the Climate Action Network, representing more than 100 NGOs, stepped up its campaign against subsidies to Canada’s oil and gas industries, which amount to at least $1.4 billion per year – with $840 million of this coming in the form of special tax breaks. At the same time, with oil prices in the triple digits, these companies are making bumper profits.

The Climate Action Network report, Fuelling the Problem, states: “Companies with tar sands investments have combined annual revenues over $1.2 trillion. Of these revenues, more than $1.1 trillion belong to foreign-owned companies. For example, U.S.-owned ExxonMobil, with investments in the Syncrude development, brings in almost $320 billion” per year. Our tax dollars are subsidizing some of the richest corporations on the planet.

The Climate Action Network website features a tax subsidy clock showing how much Ottawa has shovelled out to the sector since Harper pledged to phase out subsidies to the oil and gas industry at the October 2009 G-20 conference in Pittsburgh. The last time I looked, the figure was over $2.4 billion.

But the real figures are even higher than that, according to a Nov. 9, 2010 article in The Tyee in which Mitchell Anderson wrote about the “vast yet little-known subsidy” by which taxpayers pick up the tab for half the natural gas used to heat bitumen for tar sands extraction. “Bitumen recovery and upgrading will eat up more than 15 billion cubic metres of natural gas this year, according to data from the Alberta government. At current prices, this will cost $3.4 billion, of which $1.7 billion will be paid for by the public.”

Even more alarming, using industry figures, Anderson reveals that, with increased tar sands production, “the taxpayer portion of this fuel cost liability” will grow to “a staggering $10-$15 billion per year.”

So, while the mining industry and the oil and gas industry take in billions of dollars in annual profit, we’re paying to clean up abandoned mines, we’re paying for abandoned oil and gas wells that have to be remediated, and we’re paying billions to subsidize the mining, oil and gas, and tar sands industries – all of which are ruining our boreal forest ecosystem that provides some $700 billion per year in non-market services.

The Tyee’s Mitchell Anderson puts it well: “If oil sands operators had to cover the full cost of their natural gas expenses, is it possible that many of these billion-dollar ventures might instead by revealed as boondoggles? Since the taxpayer is denied access to basic cost data, even though they are paying half the bill, there is no way of knowing. As they say in business, there’s no such thing as a free lunch. That is, unless you can get the government to pick up the tab.”

Just how many boondoggles in the boreal are there? That’s a research study I’d like to read.


(Joyce Nelson is a freelance writer/researcher and the author of five books.)