How do allocations work?

To divert and use surface or ground water in Alberta requires a Licence under the Province’s Water Act. The Licence identifies the water source, location of the diversion site, volume, rate, and timing of water to be diverted, priority of the “water right” established by the Licence, and any conditions the diversion must adhere to.

The allocation of water is the maximum volume that a company can withdraw from a specified water source in one year. Typically, for oil sands projects, the allocation of water is applied for under the Water Act during the Environmental Impact Assessment stage, and the information relating to the impact of the water withdrawal is provided at this time (note that there can be exceptions for in situ projects). Alberta Environment is responsible for reviewing the hydrologic and hydrogeologic analyses in order to assess the water availability and any potential adverse effects on the water supply source, neighbouring lands and works, and the aquatic environment.

Three water sources have typically been identified for the oil sands mining projects, including: groundwater, surface water runoff (i.e. precipitation), and the Athabasca River. The allocation volume for each source of water is generally estimated as follows:

1)      For groundwater, the allocation volume is considered to be the volume of water that is required to be removed each year in order to safely dig the open pit mine. This dewatering is required to reduce the volume of water seeping into the mining pit and to increase the geotechnical soil stability parameters next to the pit.

2)      For surface water runoff, the allocation volume is considered to be the volume of water that is captured within the project area and is therefore not available to the downstream aquatic environment. Examples of this are the industrial processing areas, the open pit mine, and the tailings areas; in these locations, surface runoff is collected and contained and this water is not released to the environment. Although various methods have been used to estimate the surface water runoff allocation for the various projects, a preferred practice is for the allocation to be based on the volume of water that would have been released to the environment from the largest surface area over the life of the mine during the statistically wettest of ten years (i.e. the “1-in-10 wet year”). Note that allocations are typically much larger than the actual use of surface runoff.

3)      For water withdrawals from the Athabasca River, Alberta set strict limits on how much water oil sands companies can remove, setting a high level of protection that is balanced with the needs of the community and industry. The goal is to ensure low impact to the river ecosystem, coupled with water conservation and innovation by water users.

Alberta is taking a phased approach with a framework that is based on scientific research, stakeholder input and expertise within the provincial and federal governments. Monitoring and assessment of the protective and socio-economic goals in the region will continue throughout the life of oil sands projects.

Oil sands companies are complying with Phase One of the Framework via the implementation of the Oil Sands Water Management Agreement for the 2008-2009 Winter Period, dated December 2008. The agreement includes the four oil sands companies currently operating and withdrawing water from the river (Canadian Natural Resources Limited, Shell Albian Sands, Suncor Energy Inc., and Syncrude Canada Ltd.). The agreement restricts the withdrawal rate of each company in order to cumulatively meet the withdrawal rate defined by the Water Management Framework.

Further work underway on the Framework (Phase Two) includes development of an ecological base flow to ensure the aquatic ecosystem remains protected into the future. Phase Two will utilize further scientific and traditional knowledge of the Lower Athabasca River gathered over the years

For oil sands in situ projects, the allocation is based on the volume of make-up water that is required. As per the Water Conservation and Allocation Policy for Oilfield Injection (2006), the ultimate goal is to reduce or eliminate the allocation of non-saline (fresh) water for oilfield injection, with the preference being for in situ projects to use saline water instead. Note that the use of saline water does not currently require a Water Act Licence, so an allocation of saline water is not required.