Past, present and future of the environmental service industry

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By Kurt Hansen

In 1969, the United States enacted its federal Clean Air and Water Acts. Alberta did the same in 1971, as did many other Canadian jurisdictions, after pollution caught significant public attention during the 1960s.

Shortly after, a few astute engineering consulting companies across Canada diversified and augmented their business with an environmental division. They started the service with internal expertise from the engineering disciplines of sanitary, geotechnical and water resource engineering. Early on, they recognized that non-engineering expertise was required. Hydrogeologists, soil, vegetation and atmospheric scientists were needed for the environmental impact sciences of groundwater contamination, mined land reclamation and air quality assessment. It was a frontier science back then.

In the 1980s, hazardous and municipal waste, landfill and incineration management legislation became common. Legislation regarding waste minimization and corporate due diligence was introduced during the 1990s. Then, a few Canadian jurisdictions required “third party verification” of corporately filed compliance reports regarding greenhouse gas emissions (GHG) and reductions. Other peripheral service needs of periodic “third-party auditing” of corporate environmental management systems (i.e., emission and ambient air quality monitoring, company sustainability programs and goals, waste management) have evolved.

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These legislative requirements have paved the way for the rapidly growing environmental service industry that has diversified to the point of no longer being a service that engineering companies excel in providing. Thousands of Canadian service companies now offer environmental assistance.

Current business fabric

The current environmental service industry falls mainly into the following categories: proposed new industrial project development; existing operating industrial facilities; and government and institutions.

The first category is the most significant for the environmental service field. Industrial clients simply do not have the in-house expertise and human resources to tackle this for new projects. It requires such a variety of environmental expertise that they cannot justify hiring their own full time employees. The service industry has all of the specialists, and is up to date with regulatory requirements and permitting strategies.

The second business category is the focus of many small and medium-sized environmental service companies that wish to only focus on specific services, such as:

  • Air, water and soil sample collection, physical and chemical analyses, brief data interpretation and regulatory compliance report submissions.
  • Baseline monitoring and reporting (e.g., groundwater quality in potential future coal bed methane formations).
  • Environmental auditing of regulatory reporting compliance, environmental management systems, sustainability annual reports, GHG emission statement verification, etc.
  • Waste inventorying and dispositions and annual regulatory reporting.
  • Contaminated site clean-up, remediation and reclamation.

The third business category is government and institutional assistance. While the travel may appeal to some, it is highly variable, requires long lead time and is not suited for those that wish to stay local.

The future

The main driver of future service requirements will be new or revised regulatory requirements. For environmental assessment and contaminated site clean-up, demand is directly related to the number of industry-proposed new or expanded facilities that are subject to mandatory environmental assessment submission.

Market fluctuations will exist for industrial facility decommissioning, but will be stable in western Canada with its thousands of oil and gas well production sites. Future legislative changes could arbitrarily increase or decrease demand. For example, the demand for environmental assessment services dropped a couple of years ago due to revisions of the Canadian Environmental Assessment Act. This meant fewer types of project developments required mandatory environmental assessment, or less comprehensive assessment.

Increased market demands are expected in certain sectors. For example, Alberta introduced the development of airsheds for regional air quality monitoring during the mid-1990s. About 10 of them have since been established with a variety of air quality monitoring and data collection systems.

Recent studies by the Canadian Council of Ministers of the Environment suggest that other provinces may move towards coordinated airshed monitoring, compared to fragmented air quality monitoring by individual permit holders and provincial environmental departments.

Another example is the recently established Alberta Environmental Monitoring, Evaluation and Reporting Agency. It is tasked with establishing a network of stations and systems in northern Alberta to monitor air, water, soil, etc. Specialist environmental contractors will be required for these new monitoring developments and similar demands may evolve in other provinces.

The need for baseline groundwater quality monitoring occurred about 10 years ago because of coal bed methane developments. Future oil shale fracking developments will increase the need even more.

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