Statoil to plead guilty to oilsands offences

Statoil, the 2/3 state-owned Norwegian oil company, is well known for promising to develop the oil sands sustainably. This fall, it will plead guilty to charges relating to its Alberta oil sands project.[1]

Statoil faces 16 charges of improperly diverting water, and another three charges of providing false or misleading statements to regulators. If convicted on all counts, Statoil could be fined up to $11 million dollars.

The case is being closely watched. First, Statoil is under pressure in Norway to act responsibly and perhaps pull out of the oilsands altogether.  Second, water withdrawals related to the oilsands are a highly contentious issue. The Pembina Institute summarizes water withdrawal concerns in four points:[3]

• Oilsands operations return almost none of the water they use to the natural cycle.
• Mining operations alone are licensed to divert 652 million cubic metres of water each year, about seven times as much as the annual water needs of the Edmonton area.
• The ecosystem of the Athabasca River, which flows into one of the world’s largest freshwater deltas, is at risk from current water withdrawals.
• The cumulative impacts of oilsands development on water are largely unknown due to inadequate monitoring.

Statoil representatives emphasized that the charges relate to water withdrawals used to create ice roads rather than for use in their oilsands operations.

And third, the penalty that Statoil may face  could be significant. Between now and the next hearing, in November, Statoil will negotiate a plea bargain with provincial regulators. Creative sentencing will likely be considered, as in Syncrude’s conviction earlier this year under the Migratory Birds Convention Act (MBCA)[4] and Alberta’s Environmental Protection and Enhancement Act (EPEA)[5], and is discussed in an earlier blog entry.[6]