By Peter McKenzie-Brown
A newspaperman since 1972, Jaremko has worked for the Calgary Herald and other large papers, and also as editor of Oilweek (a sister publication of OSR) and other petroleum-related magazines. Although he has written other books (including co-authoring a history of Canada’s oil industry with David Finch and myself), the ERCB gig was his first contracted book. Steward is the product of about two years of Jaremko being embedded within the regulator's folds.
The ERCB Approach
According to Jaremko, his contract “used an ERCB approach. The organization is full of professionals. They bring you in for a project and then they leave you alone. I gave them a one-page outline when I started, and then they basically said ‘Do it!’ I got myself embedded in a small cubicle in the communications department and wrote the first draft. After I provided that draft to the communications department, they sent a copy to Board Chairman Dan McFadden, whose project this was. He gave it to a couple of board members and they went through it and had a few questions. We went back and forth, but apart from a couple of changes in detail my presentation held up.”
Jaremko says there were several advantages to his ability to stay in journalistic mode. “I went into the situation as a journalist, and I dealt with the organization by function rather than worrying about people’s place in the organization chart. If you’re ever going to do this one and if you’re going to make it readable, it’s critical that you operate like that.” In reference to Alberta’s recent announcement that it is creating an Environmental Monitoring Commission that will regulate water, air, land, habitat and biodiversity across the province, he says “I knew that there was going to be a provincial regulator [because I had interviewed former environment minister Ron Liepert]. I knew that there was no point in structuring the book around the organization chart, because the organization chart was going to change.”
With virtually no direction from the board, Jaremko wrote his draft in 11 months. Then, he says, “Process took over. You know there’s going to be a process right up front. For something like this you take the amount of time that it would require is, for example, you are still working in magazines, and you multiply it by two. There is a lot of process involved, no matter how efficient you are.”
According to Jaremko, “The only request I had from the chairman was to put more people in it, so I did a swing through the province to collect a bunch more people, [none of whom] were actually employees of the board. In the first document, I had written profiles of people who were employees of the ERCB. In the second go-around, I interviewed people whose only real connection with the project was that they had been involved in court cases with the board. These included Jim Gray, Gwyn Morgan, Peter Lougheed, a number of aboriginal folks, a lot of industry people and some who had worked” both for the board and the industry.
Out of Control
Jaremko’s knowledge of both the oilsands and Alberta politics is formidable. We talk about Lougheed’s famous complaint a decade ago, in which he said the industry was out of control and the source of environmental problems.
“Think about it,” says Jaremko. “Things were a mess. There was a huge expansion at Suncor, Syncrude was going through another big expansion, CNRL was building the Horizon Project, Shell was developing Albian Sands, and Petro Canada had received approval for Fort Hills. That was too much development in the oilsands mineable areas. Peter Lougheed” – whose government had developed a policy in 1971 that no more than two oilsands mines should ever be developed at the same time – “was just right.” But that’s only half the story, he says. “The other part of what he said is that that idea doesn’t apply to in situ development, which is very much like conventional oil development.”
Warming to the topic, Jaremko says “One of the arts of doing history is to try to walk in the shoes of people like Peter Lougheed, who didn’t have the perspective of how things would develop over the next 40 years. Nowadays, looking back on that area, we tend to do so through the lens of environmental critic. But just look at Lougheed’s speeches as opposition leader and his annual state of the province messages after he became premier. That was an era of activist, vigorous government. Today even the NDP wouldn’t do what he was proposing. [If you factor in government loan guarantees and other concessions], Syncrude was mostly funded by government, don’t forget.”
Because big volumes of oilsands production are a recent development in a hundred-year-old industry, the book devotes only modest amounts of space to the oilsands, but his coverage is nonetheless important. For example, Jaremko provides valuable information on the steps the board took to proration conventional oil production before it would enable GCOS (Suncor) and Syncrude to go ahead.
In the case of Syncrude, he writes that panic about the huge Prudhoe Bay discovery in Alaska contributed to bringing an unhappy judgment to the table. Quoting Gwyn Morgan – who became a highly successful oilman after beginning his career with the board – the ERCB decision to defer Syncrude’s 1968 application for development “was a bizarre experience…. It was the beginning of my life lessons of how overdoing regulation could totally screw things up. The problem wasn’t Syncrude’s plant. It was lack of pipeline capacity and prorationing.”
That panic dwindled as Atlantic Richfield faced one delay after another, and the Social Credit government asked the board whether it would review its decision. They did so in 1969, Jaremko writes, “after Syncrude agreed to postpone the production start date until at least 1976.” Oilsand development was “a political hot potato from the get go,” he writes, adding that “The ERCB also put GCOS through more than one hearing characterized by long, hard fights among business factions.”
The Dead Ducks Affair
Although the experience in Alberta has been toward steadily stricter regulation, for the most part these changes reflect the development of improved technology and the impact of enhanced best practices. Every once in a while, though, a disaster of some sort leads to more tightly ratcheted regulation. One example was the 1947 blowout at Atlantic Leduc #3, which wasted oil and endangered the public. The 1982 sour gas blowout at Lodgepole led to loss of life, wasted resources and the inconvenience of a rotten egg odour people could sometimes smell as far away as Winnipeg.
The highest-profile disaster for the oilsands took place in 2008, when 1,600 migrating waterfowl landed in a tailings pond and died. The board was already working on a new tailings pond regime when this event took place, but the dead ducks affair heightened public and ERCB concerns. The result was an end to “[t]he old pattern of lighter regulation [which] was a legacy from lean times when giant complexes were pioneers on the industry’s technology frontier, struggling to survive low oil prices,” Jaremko writes. “No longer content to assign conditional approvals that allowed owners to comply with regulations at their economic convenience, the ERCB took action.”
The board’s response can be found in Directive 073. Titled “Requirements for Inspection and Compliance of Oil Sands Mining and Processing Plant Operations in the Oil Sands Mining Area,” it is tough. Not surprisingly, given concern within and without the industry about the waterfowl calamity, most companies quickly endorsed the new rules. “Some have even identified potential improvements,” writes Jaremko, “and urged ERCB inspectors to recommend their ideas, bumping them up the corporate priority ladder.”
Again putting on his historian’s cap, Jaremko describes the oilsands as part of “a great Canadian theme.” Since Confederation, the country has recognized itself as an enormous geographical area, with lots of resources but not many people or companies to develop them. “Governments have always been involved in developing our resources and transportation systems. The first technical public agency the government created was the Canadian Geographical Survey.”
As the prairies struggled for ownership of their resources, part of Alberta’s strategy was to create the Alberta Research Council (then known as the Alberta Council of Scientific and Industrial Research) in 1921. Today called Alberta Innovates – Technology Futures, oilsands-related development remains a key part of its mandate.
After describing the mandate of the ERCB, Jaremko builds his book upon a structure that describes the board’s key functions – Conservation, Safety, Environment, Peacemaker and Mentor. The first four are self-explanatory, but the board’s mentorship role is less obvious. In this book, it is the most interesting.
Numerous oil patch people cut their teeth with the board and went on to become industry stalwarts. That’s part of the mentorship role. More important is that the board has an open-door approach to knowledge about the industry.
The board makes all manner of material available to the public, Jaremko writes: “core samples from wells, cuttings from drill bits, and rig tour reports.” For technical people, its Core Research Centre is huge. It “now houses 1.3 million boxes, each weighing 14 to 18 kilograms. By heft, the rock archives gathered from Alberta’s oil and gas fields dwarfed the 225-tonne Statue of Liberty. The 18,000-square-metre building also held 18.5 million vials of drill-bit cuttings and nearly 400,000 rig tour reports.” Those materials played a vital role for companies wanting productive oil sands leases as SAGD became a reality, for example.
The mentorship chapter, which illustrates how that trove has helped companies compete by using information that may actually have originated with their competitors, is a tour de force. Take the time you need to enjoy it.
The press run for this book was a modest 2,000 copies – extremely modest, actually, when you consider that 116,000 men and women now work for Alberta’s petroleum industry.