UPDATE 2-Syncrude Canada fined C$3 mln for 1,600 duck deaths

Fri Oct 22, 2010 5:00pm EDT

Related Topics

* Syncrude's fine money to fund environmental programs

* Sentencing follows June conviction

* Green groups call fine a slap on the wrist (Adds company, environmentalists' comments)

By Jeffrey Jones

CALGARY, Alberta, Oct 22 (Reuters) - Oil producer Syncrude Canada Ltd will pay a C$3 million ($2.9 million) penalty for negligence in the deaths of 1,600 ducks in a toxic waste pond, a case that fueled international concern about the environmental impact of developing Canada's oil sands.

Most of the money will be contributed to wildlife and habitat conservation programs in northern Alberta.

Alberta Provincial Court Judge Ken Tjosvold found Syncrude, one of Canada's largest oil sands producers, guilty in the deaths of the birds last June. He accepted the C$3 million sentencing proposal on Friday.

He had ruled that Syncrude failed to take necessary steps to keep waterfowl away from the tailings pond at its Aurora mine in northern Alberta in April 2008. Many of the ducks became coated with sludge and sank.

Syncrude had argued that a spring snowstorm prevented it deploying the sound cannons and scarecrows that are used to keep birds away from the ponds, which are filled with wastewater, clay, heavy metals and residual oil, byproducts of the oil sands extraction process.

"The incident has haunted us and it's something we'll never forget. We sincerely regret that it happened," Syncrude spokeswoman Cheryl Robb said. "But we've learned a lot from it and we've made significant changes to our system."

Syncrude fought the charges in a nine-week trial, saying convictions would have implications throughout the oil sands mining industry.

Environmental groups have been highly critical of oil sands development. They said the fines amounted to a slap on the wrist for Syncrude, a joint venture of several international oil companies that can generate revenues of more than C$20 million a day at current oil prices.

Mike Hudema, tar sands campaigner for Greenpeace, said governments should also be held to account for what he believes to be lax regulation.

"The government has never looked into its own fault in this event and continues to allow multinational companies to monitor and enforce themselves and continues to allow tar sands giants to poison and destroy large swaths of this province," Hudema said in a statement.

Since the incident, Alberta's energy regulator has imposed more stringent rules for new tailings ponds, forcing the industry to develop new technologies for reducing and reclaiming them.

Syncrude's penalty includes C$300,000 under Canada's Migratory Birds Convention Act, as well as C$500,000 under Alberta's Environmental Protection Act. Half of the latter will be used to create a program for bird protection and monitoring at a Fort McMurray, Alberta, college.

As for the rest, C$1.3 million will go to the University of Alberta for bird protection research and C$900,000 will fund the purchase of lands near Edmonton for conservation.

Robb said one major change Syncrude has made since the incident is the implementation of year-round bird deterrents and installation of a radar system that is similar to those used at airports.

Syncrude's partners include Canadian Oil Sands Trust COS_u.TO, Imperial Oil Ltd (IMO.TO), Suncor Energy Inc (SU.TO), Sinopec Corp (600028.SS), Nexen Inc NXY.TO, JX Holdings Inc (5020.T) unit Mocal Energy and Murphy Oil Co (MUR.N).

($1=$1.03 Canadian) (Reporting by Jeffrey Jones; editing by Peter Galloway)

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