Calgary-based oil giant appeals fine over wildlife deaths in tailings pond
Canadian Natural Resources Ltd. CNQ-T is appealing a $278,000 fine for a major environmental infraction that killed birds and endangered coyotes and wolves near its Horizon oil sands mining operation in Northern Alberta.
The Alberta Energy Regulator levied the fine in July last year. Tyler Callicott, its director of enforcement, wrote in a judgment that the Calgary-based oil giant failed to take all reasonable steps to prevent wildlife from coming into contact with toxic tailings at the oil sands site.
But the oil company says the regulator erred in applying pertinent legislation and, as a result, issued a penalty that was far too high. It wants the regulator to reduce the fine by more than 80 per cent, to $46,750.
Canadian Natural's net earnings were $7.4-billion in 2024.
The fine stems from CNRL's lack of action after it discovered that an island had formed in a tailings pond at Horizon in the spring of 2021. Tailings ponds contain process-affected water and bitumen that is toxic to wildlife – both to birds, which lose their insulation, waterproofing and ability to fly when heavily oiled, and to the predators that eat them.
No birds were nesting on the island when CNRL first noticed it in 2021, so the company continued with its usual bird-deterrent activities until the island was eventually submerged by rising water. It made no effort to eliminate the island or manage the level of water to prevent its re-emergence, according to a written decision from the regulator.
In the spring of 2022, the island re-emerged and became a habitat and nesting site for birds - and their predators, such as wolves and coyotes, which could access the island through a strip of shallow water.
Canadian Natural reports first-quarter profit beat and record oil and gas output
On May 21, 2022, CNRL discovered 271 California gull nests and a Canada goose nest on the island.
Two weeks later, it notified the regulator of the formation of the island and measures it was taking to prevent birds from coming into contact with toxic tailings.
'These, and subsequent, mitigation measures were not effective in preventing animals from coming into contact with a hazardous substance,' the AER's Mr. Callicott wrote in his decision.
The regulator deemed the incident major, given that CNRL reported 411 bird fatalities between May and August of 2022, and that coyotes and wolves accessed the island through the water of the tailings facility and killed oiled birds.
In a 114-page appeal lodged on May 6, CNRL argued that a hazardous substance must 'come into contact with or contaminate' an animal for an offence to have occurred, according to environmental rules.
But for a portion of the contravention period there was no proof of oiled birds, CNRL argued in its appeal. Instead, the regulator said in its judgment that it was only 'likely or inevitable' that birds were contaminated by the toxic tailings pond, because nests were present on the island.
When the regulator relied on 'likely or inevitable' contamination, it issued a penalty for 76 days, from - May 21, 2022, when the first gull nests were identified, until Aug. 4, 2022, when the gulls had all left the island.
But given there were only 13 days when oiled birds were identified, CNRL said the penalty should be capped to that time period.
The company acknowledged in its appeal that the incident was significant. But it argued that the base penalty should be reduced owing to Canadian Natural's 'good faith and mitigation measures in response to the incident.'
Oral final arguments on the appeal will be held on June 18.
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