Kyoto is the international agreement that in its first phase imposed modest emissions reductions on participating industrial nations. Canada ratified the agreement in 2002 and set aside money to begin reducing greenhouse gas emissions. When the Kochs pulled out of Fort Hills, Canadian media reports described it as the first casualty of Kyoto in Alberta's oil patch. Koch eventually sold its interest in the project.
In hindsight, the oil industry regards the sale as a missed business opportunity for the Kochs. Today Fort Hills is owned by Suncor, Total, and Teck Resources, and is one of the biggest oil sands mines in development in Alberta.
The Harper government pulled Canada out of the Kyoto agreement last year and has been moving swiftly and aggressively to remove environmental and regulatory obstacles that could stand in the way of exporting western Canadian oil to global markets.
Now, the Kochs are more visibly re-entering the oil production business. In November, Alberta's Energy Resource Conservation Board published a notice for a Feb. 22 hearing on the company's application to begin an oil sands project in the Cold Lake area. Named Gemini, the project would produce 10,000 barrels of oil a day using a recovery process known as Steam Assisted Gravity Drainage, or SAGD (pronounced sag-dee).
Cold Lake, population 13,839, is in the middle of the Canadian wilderness, about 400 miles north of the U.S. border where Alberta touches Saskatchewan. The Koch Gemini project will occupy about 90 acres of land next to a pristine body of water called Angling Lake.
From well pads located about 400 yards from shore, the project will drill down and horizontally to reach bitumen deposits directly beneath the lake. Using the SAGD process, drillers will then inject steam to liquefy the bitumen and pump it out. This will continue for as long as the well produces, probably about 30 years.
"The 10,000 barrel a day figure is a legally important limit," said Bill McElhanney, a lawyer based in Edmonton, the capital city of Alberta, in a telephone interview with InsideClimate News. "It allows producers to avoid a comprehensive environmental assessment, which is only required of projects producing more than 10,000 barrels a day."
Once a project gets going, McElhanney explained, it can be expanded easily, and continue to enjoy the advantage of avoiding a comprehensive federal review.
McElhanney is a partner with Ackroyd LLP, Barristers and Solicitors, a firm that specializes in representing aboriginals, landowners and ranchers. He negotiated with Koch Exploration Canada on behalf of landowners near the Gemini project, who fear it will pollute the air or contaminate their water. Some filed official complaints with the government.
McElhanney said that in Alberta most oil developments are approved, and there was only so much he could do for his clients. In this case, he was able to persuade Koch to pay for an independent environmental review, which was used as the basis for negotiating confidential agreements with the landowners, who then withdrew their complaints. As a result, the public hearing in Cold Lake was cancelled, and the project is quietly moving forward.
Researcher Lisa Schwartz contributed to this report.