Tuesday, August 30, 2011

The Advisor: John Gulley

This article appears in the September issue of Oilsands Review
By Peter McKenzie-Brown
John Gulley speaks with the voice of authority developed over 35 years; few people can match his longevity of oilsands experience. He is a senior oilsands advisor with Golder Associates, an engineering and environmental company operating under the banner “Engineering Earth’s development, preserving Earth’s integrity.” Now a global company, Golder has more than 7,300 employees – 3,000 in Canada, where the company began.

“I started working with what was then Great Canadian Oil Sands (now Suncor) in 1976 on a project that was about deterring birds from landing on tailings ponds,” Gulley says. “I’ve seen significant changes in the way companies produce oilsands, the way regulators work, and of course major changes in the way oil companies deal with the environment.”

Today, his specialty is to work with companies as they prepare their environmental impact statements. Given that background, he has a clear view of the way oilsands regulation functions. Top of his list is the idea that regulation doesn’t improve industry performance. As an example, he cites ERCB Directive 074, which was issued in 2009.

“Many people believe it will actually change the way companies operate,” he says. “In fact, it reflects work the industry has been doing for many, many years. The companies have been searching and researching ways to deal with (environmental) problems for many years. The directive put in words the industry’s achievements. I’m not convinced that regulators and stakeholders play a large role in identifying problems.”

Science and technology
In Gulley’s view, advances in scientific technology have led to the biggest changes in environmental protection. Monitoring systems began tracking oilsands data about 1970, and “their existence and the way we use them hasn’t really changed in recent years. What has changed in the last 35 years is the volume of data we can record and the level of accuracy that’s now possible. The information we use to prepare an Environmental Impact Assessment, for example, is staggering. (Data on wildlife and habitat) has lagged, but we’re developing that now.”

According to Gulley, the increasing analytical capability of the lab has created a whole new world of environmental science. One result is that data from the industry’s early years has become irrelevant. “The detection limit of a chemical or an element – mercury, say – may have been 1.0 in those days. (Today we measure the same element at 1/1000th of a unit, instead of one.) You may have hundreds of data points from (the early) years, but you don’t really have any data. Thirty-five years ago when you talked about polycyclic aromatic hydrocarbon compounds you didn’t have a list of 150 compounds (as you do today). You had a single PAH number (for all of them).”

Better labs, better techniques and more data have helped create better environmental management. “The amount of data that we have and our knowledge of the environment enable us to predict the potential effects of (oilsands) projects as we move forward. When we look at cumulative effects we have a lot more certainty now. We now have a great deal more confidence.”

Progress in the oilsands industry has created an increasingly complex sector. Today there are three distinct groups of producers. The pioneers – Suncor, Syncrude and Cold Lake – are the first group. Producing facilities that have been constructed in the last decade or so, many of which use in-situ production, are the second. Then there are those in the planning stage. “There’s a difference in each of their operational requirements,” says Gulley, “and we have people dealing with all of them.”

The regulatory system
The rapid advance of technology has made the environmental regulatory system both flexible and robust. “You have to adhere to a guideline number rather than to a technology,” Gulley explains. “This gives operators quite a bit of flexibility. They don’t have any flexibility around the number – for example, they can’t say ‘I’m going to achieve 12 instead of 10.’ How they meet the required number is up to the operator.”
He pauses for effect, then notes a recent announcement by the federal government that they are going to become involved in the choice of technologies to reduce carbon emissions. “This is quite a departure from the way this has traditionally been done. Perhaps the industry should be alarmed.”

Two features of the traditional regulatory system make it so effective. First, if an operator doesn’t meet one of the criteria in its operating permit, by law the company has to report that fact to the authorities. That’s the first level of protection. The second is that the values required in the operating permits are “protective,” in the sense that they are far more restrictive than necessary.

Consider two examples, each based on the same operating permit. The permit specifies that a particular discharge into water can be no more than five even though the best scientific thinking says a discharge volume of 50 would be enough to protect the environment.

On the one hand, imagine that the producer hits a level of seven for one day. The company must immediately report the infraction. The regulator may do nothing because the science has shown that higher values are safe, but the producer will still need to take swift action to reduce the discharge to the permitted rate.

On the other hand, imagine that the operator reports discharges of 500 for five days in a row. The regulator would act quickly. Penalties could include fines or a halt to operations.

If regulators and stakeholders play a large role in identifying problems, what role do environmental NGOs play? “The Pembina Institute and other environmental NGOs provide perspective. Their goal is to control, minimize and in their words ‘protect the environment’. I review every one of their documents. I look at their information, and I compare it to ours, and it’s as though we live in two different worlds. I would consider our data to be more scientifically based,” he modestly reflects.

However, he says, “They provide a voice for many people who otherwise wouldn’t say anything. Have they driven improvements? Yes, in my view they have. They push companies to be better, they push regulators to be better, and they increase everybody’s awareness of the oilsands. Do I agree with everything they say? No, I don’t.”
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