The heavy oil industry should pay for the huge volumes of fresh water it uses to tap Alberta's rich oilsands reserves, says a report by an environmental think-tank.
The Pembina Institute report also calls for a moratorium on new oilsands mines until the Alberta government figures out how much fresh water the industry should be able to take in the face of climate change.

If the province and corporations fail to act, Alberta could run out of fresh drinking water long before it runs out of oil, said Pembina spokeswoman Mary Griffiths.
"We just can't carry on with the oilsands using fresh water,” Griffiths said. "A fee on fresh water would provide companies with an incentive to maximize efficiency and to seek opportunities to eliminate or reduce water use."

In 2005, more than twice the volume of water used annually by the City of Calgary was earmarked for withdrawal from the Athabasca River in northern Alberta for oilsands mining and production, the report says.
Corporations use water and steam to squeeze and melt synthetic crude out of the gooey black oilsands so it can be refined. But once the water is used to extract the oil it becomes contaminated and is no longer fit for human consumption or agriculture. It is stored in toxic tailings ponds.

The thirst by the industry for fresh water is increasing. Oilsands production surpassed 1 mm bpd last year -- a figure forecast to double within seven years.
The Canadian Association of Petroleum Producers flatly rejects the report's call for corporations to pay a water fee or to mothball planned oilsands projects or expansions, said CAPP president Pierre Alvarez. Companies already pay for water through energy royalties collected by the Alberta government, he said.

The industry is also working with the province on a strategy to use more recycled and non-potable water.
"Do we recognize that we have to improve our water use? Yes. Are we going to keep working on it? Sure we are," Alvarez said from Washington. "Do we feel that a moratorium is in order? Certainly not."
Alvarez said the oil sector is not the biggest user of fresh water in Alberta -- growing communities and agriculture use much more.
"Is the Pembina Institute saying that everyone should be paying for water, or is it just singling out the oil and gas industry?"

The oilsands give Canada the second-largest energy deposits in the world behind Saudi Arabia. With $ 100-bn in mega-projects underway or on the drawing board, the industry is a driving force behind a boom that has helped Alberta bring in multibillion-dollar budget surpluses and created tens of thousands of jobs.
The Pembina report says the province should set targets for industrial water use and use fees to pay for research to improve water management.

The Pembina report is also critical of using fresh water to recover oil from conventional oil wells. It calls on the department to strictly enforce its new policy requiring companies to look for alternatives before they apply to use fresh water.
The Pembina report also warned that the use of fresh water by the heavy oil industry is destroying wetland habitat.