Green groups want Syncrude approval revoked

A truck drives down a street at Syncrude's oil tar sands operation near Fort McMurray, Alberta in this May 23, 2006 file photo.

CALGARY, Alberta (Reuters) - Environmental groups demanded on Tuesday that Alberta's energy regulator rescind its approval for Syncrude Canada Ltd's plans to reduce toxic waste from oil sands production, saying they do not meet the regulator's own regulations.

The Pembina Institute and Water Matters are challenging the Energy Resources Conservation Board's approval in April of Syncrude's plans to deal with its tailings as unlawful, based on recently tightened rules.

The ERCB's green light for Syncrude was the first under what is known as Directive 74, which is meant to reduce the environmental impact of tailings ponds, which are expansive man-made lakes that hold water, leftover bitumen, clay and heavy metals from the oil sands production process.

Tailings threaten water quality in Alberta, the groups said.

The regulations require oil sands companies to keep 50 percent of one component of the waste, known as fine tailings, or fines, from the ponds by mid-2013, said Barry Robinson, lawyer for Ecojustice, which is representing the environmental groups. But under Syncrude's plans just 15 percent of the fines would be diverted by that time, Robinson said.

"(The rules) are not written as guidelines. The language is pretty mandatory," he said.

Tailings ponds came to symbolize the battle between environmental groups and the oil sands industry in 2008, when 1,600 ducks were killed when they landed on a tailings pond at Syncrude's operation in northern Alberta. In June, a judge found the company guilty of the deaths.

Syncrude plans to spend hundreds of millions of dollars building two plants to reduce the toxic waste at its Mildred lake and Aurora North mine sites. It must also meet annual targets for capturing fines in the tailings.

Davis Sheremata, a spokesman for the ERCB, said the regulator had rejected Syncrude's initial tailings management plans, prompting the revised ones it approved in April.

They involve using new and developing technology and, after 2014, Syncrude will make up for its early shortcomings by reducing more tailings, allowing it to meet or beat its targets over the life of the project, Sheremata said.

"These represent major investments of money, labor and time and we felt that Syncrude was doing everything that is technologically doable to be able to meet the directive as quickly as possible," he said.

Ecojustice, formerly known as the Sierra Legal Defense Fund, is challenging the ERCB's approval by applying for a review and variance, which the regulator rules on itself. If the application is rejected, it can be appealed to an appeals court on questions of law or jurisdiction.

Since approving Syncrude's plans, the ERCB has given a conditional green light under Directive 74 to Imperial Oil Ltd's plans for tailings at its Kearl oil sands project. Environmental critics said those plans did not meet the standards under the directive either.

The ERCB is still reviewing tailings plans for Canadian Natural Resources Ltd's Horizon and Royal Dutch Shell Plc's Jackpine and Muskeg River developments.

Syncrude's partners include Canadian Oil Sands Trust, Imperial Oil, Suncor Energy Inc, Sinopec Corp, Nexen Inc, JX Holdings Inc unit Mocal Energy and Murphy Oil Co.

(Reporting by Jeffrey Jones; editing by Rob Wilson)