Let entrepreneurs tackle tailings ponds

Critics of Alberta’s oil sands development have been saying for years that it should be scaled down, stopped or at the very least highly taxed and heavily regulated to help contain its effects on the environment.

A more recent criticism, popularized by the leader of the NDP, Thomas Mulcair, is that the oil sands are harming the manufacturing sectors of Ontario and Quebec by pushing up the value of the dollar — the so-called Dutch disease.

These critics are wrong on both counts.

I recently visited the newly built ­pilot plant of Gradek Energy in Montreal, a small business founded by Quebec entrepreneur Thomas Gradek. He is one of many entrepreneurs and researchers across the country who are working on innovative solutions to deal with the environmental consequences of exploiting the oil sands.

Mr. Gradek has invented a reusable bi-polymer bead that removes bitumen from the tailings ponds — the pools of waste created by the extraction process — leaving inoffensive organic matter and water as a byproduct. The recovered bitumen can be refined while the leftover organic matter can be reintroduced into the environment, free from contaminants. Valuable minerals found within the tailings ponds are also recovered. Water, which accounts for 85% of tailings ponds, can be reused in the oil extraction process. Since this water is already warm, this also brings energy savings.

Gradek Energy is presently processing tailings from Syncrude Canada Ltd. Over the past several years, this technology has been tested and validated by several organizations, including academia, government and the private sector. Mr. Gradek has a credible plan that would eliminate all existing tailings ponds in Alberta within 10 years.

This sort of technology will transform what is now a very large amount of waste, which can pollute soil and water and emit large quantities of greenhouse gases, into value-added resources and wealth. It will gradually turn the oil sands into a much greener resource. Contrary to what Mr. Mulcair is saying, we are not going to leave an environmental burden to future generations.

What about the Dutch disease? The theory itself makes little sense. In an interrelated and constantly evolving economy, every activity has an impact on the value of the dollar and on other prices. So, why single out the oil sands? The tourism industry also pushes up the value of the dollar when it attracts more visitors. Does the NDP intend to block tourists at the border because they think tourism will cost manufacturing jobs?

More fundamentally, a strong dollar is not a cost, but a benefit.  That’s why it is called “strong.” A strong dollar is the result of efficient domestic production — including exports — and an attractive investment climate for foreign businesses.

Mr. Mulcair’s concerns have no raison d’être. Generations ago, Canadian agriculture was very labour-intensive. Today, thanks to a rise in productivity, Canadian farmers are able to produce more food at a lower cost and with fewer labourers. Canadian manufacturing has been experiencing the same phenomenon for the past couple of decades.

What is important is not that past economic conditions remain the same. It is that our economy remains flexible enough to adapt to technological change and consumers’ demand, so that factors of production go to the most productive activities — the ones that generate the most prosperity — in any sector. And there is no question that the oil sands are a huge generator of jobs and economic growth in Canada.

There has been a lot of media spin about the NDP shedding its old socialist baggage and modernizing its economic program under Mr. Mulcair’s leadership. I wish it were true, but I see little evidence that this is the case. The leader of the opposition is always seeking to undermine economic freedom and entrepreneurship with heavy regulations, high taxes and the same old interventionist policies.

I should add that the NDP leader is wrong in one more way. He believes he can make political gains by raising false problems and pitting Canadians from the East and the West against each other. It won’t succeed.

Wouldn’t it be ironic if an entrepreneur from Quebec was responsible for providing an innovative solution to Alberta’s tailings ponds? It would show once again that freedom of enterprise, human innovation and individual initiative — not government diktat — are the best ways to reconcile the economic interests of all Canadians.

Original Article
Source: financial post
Author: Maxime Bernier