Alberta Studies Water Value


Alberta is in the midst of a landmark water study that will help the government decide if it's time to start charging for the resource.

The study is looking at the value of water to the economy. The figures will guide officials examining what “economic instruments” would encourage businesses, municipalities and residents to use less water, said Bev Yee, an assistant deputy minister with Alberta Environment.

The possible instruments range from tax incentives to pricing. They're being considered because rapid growth, booming industrial activity and climate change are straining the scarce resource, especially in Alberta's often-parched south.

“In order to properly develop tools . . . that has to be informed by a better understanding firstly of how water is valued and also it needs to be informed by an understanding of how water is used,” Yee said.

The study is believed to be the first of its kind in the world, Yee said.

The South Saskatchewan River Basin — the most heavily used network of rivers in Alberta, which includes the Bow River — was chosen as the starting point. A preliminary assessment completed in March attached a $1-billion value to the basin's water.

That figure, though, is a conservative estimate, Yee said. The number is expected to grow as information gaps identified in the first phase of the study are addressed. One of the most serious voids is the amount of water being used to irrigate farmland.

The government study is being expanded to capture all of Alberta.

In the north, the spotlight turns to the oil and gas industry. As oilsands development expands so does the thirst for the Athabasca River.

According to the Pembina Institute, an Alberta-based environmental think-tank, the oilsands industry accounts for 65 per cent of water withdrawals from the Athabasca. In its surface mining operations, for instance, two to 4.5 cubic metres of water is needed to extract bitumen and turn it into one cubic metre of oil.

The energy industry is working to cut its use of freshwater, said David Pryce, a vice-president with the Canadian Association of Petroleum Producers.

Conventional oil operations, which don't include the oilsands, have reduced their use of freshwater by 50 per cent in the past decade, statistics from the country's largest oil organization show.

“We've done that primarily by moving to the use of saltwater — the deeper-formation saline groundwater that was laid down when Alberta was an ocean,” Pryce said.

In projects where freshwater is used, recycling options are being considered more strongly now.

The powerful oil lobby has been monitoring the Alberta government's shift in water management policies. The prospect of introducing economic instruments was raised in the Water for Life strategy unveiled in 2003.

CAPP would prefer the government steer clear of pricing water but, if it decides to go down that road, the industry wants a “fair and equitable approach.”

Oil and gas companies shouldn't be the only ones paying for water, Pryce said.

For the moment, the City of Calgary isn't worried about a price tag.

It is working to reduce its use of water from the Bow and Elbow rivers. And most of the water that it does use returns to the rivers after treatment.

Water resources manager Paul Fesko figures the city would get credit for that water in any pricing scheme.

A price tag of sorts has already been attached to water through the creation of a market to buy and sell water licences in southern Alberta.

A government licence is needed to take surface water, but most rivers in the province's south have already reached their limit of users.

In August, the Alberta government introduced a moratorium on new requests for water from the South Saskatchewan River Basin. The move has created serious obstacles for some development projects, such as the multimillion-dollar entertainment complex planned for Calgary's northern outskirts near Balzac.

The Municipal District of Rocky View has applied to Alberta Environment for a licence to take water from the Red Deer River, the only water body considered healthy enough to accommodate more requests.

A chance to comment publicly on Rocky View's application ended just before Christmas. While Alberta Environment considers the request, it's continuing with the government's water-value study. The department, Yee said, hopes to have policy options on economic instruments developed for the spring.


Originally published in the Calgary Herald on December 27, 2006