‘A rounding error’: critics lambast regulator's response to Kearl tailings leak

A $50,000 fine being leveled at Imperial Oil for tailings leaks at one of its oilsands facilities is just “a tiny little drop in the bucket for these massive multinationals,” said Liberal MP Adam van Koeverden.

On Aug. 22, the Alberta Energy Regulator (AER) announced Imperial Oil must pay a $50,000 administrative penalty related to tailings water leaking from the Kearl oilsands facilities in northern Alberta, about 137 kilometres northeast of Fort McMurray.

Last year, it came to light that toxic tailings had been seeping from the Imperial Oil-owned site for nine months and downstream communities were not properly notified. It took a massive spill of 5.3 million litres in February for the long-term seepage, which Imperial Oil first noticed in May 2022, to be made public through an environmental protection order. This sparked outrage from Indigenous communities, the public and politicians.

On Thursday, Van Koeverden said he was “really disappointed to not see a stiffer penalty,” as were other MPs and environmentalists.

“A $50,000 penalty for a company that made $20 billion in profits over 2022 and 2023, to me, is a feeble slap on the wrist from an industry-captured regulator,” Liberal MP Patrick Weiler told Canada’s National Observer in a phone interview.

For a company like Imperial Oil, $50,000 is “pocket change,” said Aliénor Rougeot, program manager of climate and energy at Environmental Defence, in an interview with Canada’s National Observer. 

“I don't even know that they would notice that. It's probably a rounding error,” Rougeot said.

In the second quarter of 2024, Imperial Oil reported $1.13 billion in profit.

Lessons learned

The regulator is also requiring the company to produce a “lessons learned” report to share with other oilsands operators, and “a plan to ensure tailings seepage mitigation and monitoring processes are completed” by Nov. 1. After that, Imperial Oil must also develop a research plan to study the environmental impacts of oilsands tailings water. 

You would assume quality assurances and open and transparent communication are prerequisites to setting up a mine, Rougeot said. 

“The fact that that's the response to a super egregious situation gives, I think, a good picture of how normally the standard is no transparency and no quality assurance, and it's only when you get caught doing something egregious do you have to start justifying it,” she said.

The regulator’s investigation into the Kearl incident remains ongoing. The $50,000 administrative penalty is because industrial wastewater flowed through a shallow, sandy channel and bypassed Imperial Oil’s underground seepage interception system, resulting in the wastewater entering the environment.

The regulator emphasized that there may still be other penalties to come. 

“These findings and resulting compliance and enforcement decisions do not encompass all potential contraventions that may have occurred at Kearl and that are being managed under the terms of the [environmental protection order],” reads the regulator’s press release.

But Liberal MP Weiler isn’t convinced the regulator is taking the issue seriously. 

“I don't have any faith in this investigation taking place,” he said. 

The AER requiring Imperial Oil to “produce these reports and share these reports just shows that the regulator is relying on the industry, which is obviously going to be biased in what they're putting together,” he added. Weiler also pointed to a heavily criticized third-party report the regulator commissioned, which concluded the regulator followed all its policies and procedures but noted there are opportunities for improvement.

This kind of leakage of polluted water can have lingering effects on the environment and health downstream. Earlier this month, the federal government announced $12.5 million for a community-led study into the health impacts of the oilsands. Indigenous Nations downstream of Alberta’s oilsands pushed for cumulative health impact studies for years.

Weiler, van Koeverden and Rougeot say the polluting oilsands companies that created the conditions where a health study is necessary should be the ones paying for it.

“I am disgusted that the obligation to fund these types of studies continually falls on the taxpayer when they're reaping billions and billions of dollars in profit,” van Koeverden said, pointing out that Imperial Oil CEO Brad Corson, himself, earns tens of millions of dollars. Corson’s total compensation was $17.34 million in 2022, making him the highest paid energy CEO in Canada that year.

Conservative MP and shadow minister for environment Gerard Deltell was unavailable for comment, as was Green Party MP Mike Morrice. The NDP did not respond to a request for comment by deadline. 

Environment and Climate Change Canada enforcement officers are still investigating Imperial Oil to see if the incidents violated the federal Fisheries Act. No public updates have been provided. The Fisheries Act prohibits the deposit of a harmful substance — such as the toxic chemicals that make up oilsands tailings — into water frequented by fish or any place where the substance could feasibly enter fish-bearing waters. A violation isn’t determined by whether fish are harmed by the deposit — just whether it entered or could have entered the waters where they live.

The AER is currently facing a lawsuit from the Athabasca Chipewyan First Nation for failing to keep it informed of the tailings spill and seepage. The ACFN has not yet issued a statement about the $50,000 fine and Chief Allan Adam was not available for an interview before publication.

Though the fine is small, “this is vindication for communities who know they were wronged by Imperial Oil,” van Koeverden said. 

“This is more evidence that a strong regulatory regime, both at the provincial and federal level, are needed to hold these companies accountable for their pollution, particularly when it comes to the health and the well-being of communities.”

In response to the AER’s fine, Imperial Oil spokesperson Lisa Schmidt said the company regrets that this incident occurred and continues to monitor and provide regular updates and data to local Indigenous communities.

To date, no impacts to fish, amphibians, or other wildlife have been reported to the AER, according to the regulator’s press release.

“We are confident the actions we have taken to address the issue and the extensive measures we have put in place to refine and strengthen our seepage monitoring and collection systems are working,” reads Schmidt’s emailed statement.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer