posted July 21, 2006 08:18 AM              

Last Updated Fri, 10 Mar 2006 13:00:46 EST

CBC News

A medical examiner in Alberta wants to know why there are reports of serious illnesses, including a rare cancer, in a small First Nations community near the province's oilsands.

Oilsands development approximately 75 km north of Fort McMurray. (CP file photo)

A high number of illnesses, including leukemia, lymphomas, lupus, and autoimmune diseases, have been diagnosed in Fort Chipewyan, a community of about 1,200 people living 300 kilometres north of Fort McMurray.

Elders in the community say they didn't see these kinds of diseases until the oil industry started production near their homes on the southwestern tip of Lake Athabasca.

Syncrude and Suncor extract and process hundreds of thousands of barrels of oil a day in their oil sands projects near the community.

Further development is planned for the oilsands, which cover an area in northwestern Alberta that's larger than the state of Florida.

But Fort McMurray Medical Examiner Dr. John O'Connor says he'd like some answers before more developments are approved. O'Connor says he is diagnosing unusually high numbers of immune system diseases affecting the thyroid and less serious ones such as rhumatoid arthritis and skin rashes.

He has also treated five people in the community who died recently from a rare, almost always fatal cancer that should occur once in every 100,000 people.

"With my increasing lack of ability to explain why I'm seeing such numbers, it worries me and it does call for a health study to be initiated as soon as possible," says O'Connor.

He is in negotiations with Health Canada to start an epidemiological investigation that would track the health of the community.

Warren Simpson, a resident of Fort Chipewyan. says he hopes it happens soon before any more members of his small community die.

"My dad, my sister, my aunt, a lot of my cousins have it, my friends' families ... a lot of them have died of cancer and some of them are dying now of cancer," he said.

Simpson successfully fought off cancer, but says he's scared it will come back.

With between 1.7 trillion and 2.5 trillion barrels, the oilsands reserves are considered second only to those in Saudi Arabia.

Copyright ©2006 Canadian Broadcasting Corporation - All Rights Reserved

posted July 21, 2006 08:24 AM              

Last Updated Wed, 19 Jul 2006 17:19:52 EDT
CBC News
Fort Chipewyan does not have higher rates of cancer or other diseases than other parts of the province, an investigation by the Alberta Cancer Board has concluded.

However, long-time residents of the remote northern community of 1,200 remain unconvinced.

"All their data might be incomplete. That's the problem. I think it needs a very intensive study, not just a superficial glance," said John Rigney, who has cancer.

The board launched the investigation after Dr. John O'Connor, the community's physician and medical examiner, said in March he was seeing unusual diseases, including a rare and fatal form of cancer affecting the bile duct.

Elders say they didn't see these kinds of diseases until the oil industry started production near their homes on the southwestern tip of Lake Athabasca.

The board's findings were presented Monday to the province's Energy and Utilities Board, which is currently considering an application by Suncor Energy Inc. to expand its operations in the oil sands, doubling the amount of oil it can produce.

Fort Chipewyan is downstream from those operations.

Dr. Yiqun Chen, the head of disease surveillance at the Alberta Cancer Board who did the initial research in the investigation, told CBC News on Tuesday she did not have "the complete data set for 2005, and less complete for 2004" when she reached her conclusion.

However, a spokesperson for Alberta Health said the department recognized the problem and reached its conclusion after cross-referencing other databases to look for unusual cancer cases.

Copyright ©2006 Canadian Broadcasting Corporation - All Rights Reserved

posted July 21, 2006 08:40 AM              

Last Updated Thu, 20 Jul 2006 16:15:09 EDT
CBC News

The Supreme Court of Canada rejected an appeal Thursday that sought a wider environmental assessment of a $5-billion oilsands project in northern Alberta.

The three-judge panel made its decision without comment, turning down a bid by the Prairie Acid Rain Coalition and three other groups to widen the scope of an environmental assessment of the Fort Hill oilsands project.

The development plans of TrueNorth Energy Corporation, a consortium headed by Petro-Canada, include the destruction of Fort Creek, a fish-bearing watercourse.

The Department of Fisheries and Oceans decided the assessment would study the impact in an area surrounding the creek, but the environmental groups wanted the review to include the entire 200 square kilometres affected by the project.

They expressed concern that half of a wetland area that serves as critical migratory bird habitat would be destroyed, and that fish in the Athabasca River would be threatened.

"Obviously we're disappointed with the decision of the Supreme Court not to hear our appeal to the Federal Court's decision regarding how the Department of Fisheries and Oceans scoped the Fort Hills oilsands mine," said Dan Woynillowicz of the non-profit Pembina Institute.

"We certainly hope that in the future the federal government won't continue to use the discretionary loopholes that exist within the Environmental Assessment Act to shirk its responsibility from protecting the interests of all Canadians as it relates to whether and how the oil sands will be developed."

The Federal Court of Canada dismissed the coalition's bid for a judicial review in late 2004, with the Federal Court of Appeal upholding that decision earlier this year.

The oilsands project includes plans for an open pit mine, and extraction and processing plants.

Woynillowicz said his organization would now focus on ensuring the Canadian Environmental Assessment Act is reformed and strengthened.

posted July 21, 2006 08:57 AM              

James Stevenson
Canadian Press

Friday, July 07, 2006

CALGARY (CP) - Fears that cost pressures have spiralled out of control in the northern Alberta oilsands spooked investors Thursday in the wake of news that Shell Canada's (TSX:SHC) Athabasca oilsands project could potentially pay upwards of $11 billion to generate an extra 100,000 barrels of oil a day.

Even in an industry that has seen its share of multibillion-dollar cost overruns to build megaprojects, word that Athabasca's first major expansion could cost 50 per cent higher than the current $7.3 billion pricetag hit oilsands producers hard on the stock market.

Bob Gillon, an energy analyst with John S Herold in Connecticut, said the Athabasca expansion would now cost six times what the original project did, on a daily flowing barrel basis.

"It's not a knock on Shell or this project, everybody's facing it," Gillon said in an interview Thursday.

"But my Lord in heaven. If you're talking about something that cost you six times as much as it did six or eight years ago, even with the move we've had in oil prices, we're getting these things back to where the economics . . . are going to get skinny in a hurry."

Western Oil Sands (TSX:WTO), a pure-play oilsands producer with a 20 per cent minority stake in the Athabasca development, bore the biggest brunt from nervous investors, dropping $3.70 or nearly 12 per cent to $27.30 in trading of nearly 3.6 million shares on the Toronto Stock Exchange on Thursday.

Shell Canada, which owns 60 per cent of Athabasca but also has a diversified energy portfolio with large natural gas operations throughout Canada and a national gasoline station network, lost nearly two per cent or 81 cents to $40.99.

Gillon said at $11 billion, the company is paying twice as much for 100,000 barrels of oilsands crude as it would by buying conventional production.

"Now, it lasts forever and it doesn't decline, and supposedly once you get it running you don't have the maintenance capital to stay in position. But that's not so sure either - sometimes they break, they catch fire."

Gillon said the dramatic cost escalations could ultimately put an end to oilsands companies drawing the largest investment dollars in the energy industry.

A long list of new projects that have not yet begun development might be dropped off the list, said Gillon. While projects that have already been built or are well underway, such as those owned by Canadian Natural Resources (TSX:CNQ) or Nexen Inc. (TSX:NXY) might even attract greater market interest.

Other industry observers didn't expect the latest cost overrun announcement to stop growth in the oilsands, which has been receiving international attention as one of the few oil producing regions expecting large production growth in the future.

"We don't believe that the market's going to stop, we don't believe even that the rate of production addition is even going to slow down," said Steven Paget, an oilsands analyst with FirstEnergy Capital in Calgary.

But Paget said the soaring costs to develop oilsands reserves were "rationalizing" which projects ultimately go ahead.

Though there are a few smaller, junior oilsands companies looking to build smaller projects involving steam technology and not open pit mines, the oilsands is mainly a game for larger producers.

In the past year, large international companies like Royal Dutch Shell (NYSE:RDS.A), Chevron Corp. (NYSE:CVX), and French energy company Total SA have all bought major land positions or unveiled plans for massive projects.

Both Shell and Western said that further updates on the planned Athabasca expansion would be provided by the end of July.

But Paget said he highly doubted that the project would be halted.

"In some sense, it looks like a bargain. Look at the cost - you could buy a basket of large-cap shares on the open market for about the same price, but these companies are fighting to replace declines every year and they've also got international risk and exploration risk."

"Perhaps it makes sense to spend more money on oilsands."

In a research report, Merrill Lynch analyst Andrew Fairbanks in New York said the cost increase would mean that the Athabasca project would require at least $50 US per barrel oil to make a 10 per cent return on investment.

"If this is the new upper bound for capital costs, it will not be likely to deter major industry players from expanding oilsands capacity," wrote Fairbanks.

"We may lose some smaller, less well capitalized projects, but in general we foresee the industry marching on despite this latest cost challenge."

The Athabasca announcement sent shock waves through the market Thursday, affecting other oilsands producers and those currently involved in building new projects.

Calgary-based Suncor Energy, (TSX:SU), one of the first oilsands producers in northern Alberta, lost 92 cents to close at $92.32.

EnCana Corp. (TSX:ECA), a major gas producer also involved in oilsands development, fell 45 cents to $57.88, while Nexen dropped $1.31 to $63, a decline of more than two per cent.

The big partners in the Syncrude oilsands venture also took a hit on the TSX. Canadian Oil Sands Trust (TSX:COS.UN) fell $1.29 to $33.95, while partner Imperial Oil (TSX:IMO) dropped 58 cents to $40.25.

Meanwhile, Canadian Natural Resources, which is building the Horizon oilsands project, fell $2.52 to $59.60, a drop of more than four per cent.

© The Canadian Press 2006