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Shell wants to share new tailings technology

CALGARY - Shell Canada Ltd. wants to share new tailings cleanup technology it recently rolled out at its Muskeg River oilsands mine with others in the industry — no strings attached.

CALGARY - Shell Canada Ltd. wants to share new tailings cleanup technology it recently rolled out at its Muskeg River oilsands mine with others in the industry — no strings attached.

"Historically, around any technology, companies look to protect the intellectual property. They look to get value for the money they've invested in advancing that technology. That's not the model that we have anymore," John Broadhurst, the company's vice-president of development, told reporters Thursday.

"We'll make it available, no strings attached."

Tailings — a mixture of sand, clay, water and residual bitumen — are a byproduct of the oilsands extraction process and have drawn a great deal of concern for their environmental impacts. Two years ago, 1,600 birds died after landing on an enormous tailings pond at Syncrude Canada Ltd.'s mining site.

Shell said its technology — called atmospheric fines drying, or AFD — cuts the time it takes to remove the harmful byproducts, and for the land to be reclaimed to its natural state.

The technology has been tested at a pilot project, and Shell announced Thursday that it has moved into a commercial demonstration phase at its mine site north of Fort McMurray, Alta.

The project is small in the grand scheme of Shell's total operations, but it's important to fully understand how it works before it can be applied on a broader scale, Broadhurst said.

Canada's largest oilsands producer, Suncor Energy Inc. (TSX:SU), has developed technology of its own to address the tailings issue, called tailings reduction operations, or TRO.

Suncor has already spent hundreds of millions of dollars on TRO — which works on a similar principle as Shell's process — and plans to shell out another $1 billion over the next few years.

In June, Suncor chief executive Rick George said his company would "absolutely" look at licensing the technology to others.

With AFD, Shell collects the part of the tailings mixture that takes the longest to separate, called mature fine tailings.

It then adds a chemical agent to that yogurt-like substance to bind the particles together. After that, the tailings more closely resemble thick swamp mud.

The mucky tailings are then spread thinly across a sloped structure Broadhurst likens to "a pizza pie with the middle squished in."

Within weeks, the water has been drained from the sand and clay. Left to its own devices, the mixture would take decades to separate.

The resulting material has a crumbly, clay-like texture that is solid enough to walk on. The dried tailings can be spread in a depleted mining pit, then covered with soil and vegetation.

"AFD is one of a suite of technologies we have been researching over the past few years," said John Abbott, Shell's executive vice-president of heavy oil.

"And while it's not a silver bullet in solving all of our challenges with regards to tailings, this demonstration project is one way in which we can meet these challenges and ultimately accelerate the pace at which tailings can be reclaimed."

Joe Obad, associate director of the environmental group Water Matters, called Shell's efforts "commendable," but said much more needs to be done to deal with tailings ponds.

"A small-scale test project is not going to be solving that overnight," he said.

"New advances now have to be seen in the context of pretty substantial tailings ponds in northern Alberta."

Alberta's energy regulator estimates tailings ponds today contain about 840 million cubic metres of fluid and cover about 170 square kilometres across northern Alberta.

Last year, the Energy Resources Conservation Board ordered oilsands miners to capture half of their tailings by 2013, and submit plans outlining how they intend to reach that goal.

So far, the ERCB has approved submissions from Suncor, Imperial Oil Ltd. (TSX:IMO) and Syncrude, but has been flexible on its timeline in some of those cases.

The ERCB has approved Shell's commercial demonstration of the new technology and is in the process of reviewing the company's overall tailings plan for its Muskeg River mine.

"It's positive that they think (the commercial demonstration) is going to make a difference, but if it's not going to make them comply it's not sufficient," Obad said.

Shell fully supports the ERCB's new tailings rules, laid out in Directive 74 last year, Abbott said.

"Having said that, I think all of the oilsands operators accept the fact as well that Directive 74 is a very challenging directive," he said.

"We believe we have a range of technologies which will meet the intent of the directive."

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