Rapid development in the oilsands is harming the province's air quality, water and boreal forests, a report from the Pembina Institute says.

"Oil Sands Fever – the environmental implications of Canada's oilsands rush" calls for industry and regulators to develop better plans for managing the environmental impact in the resource-rich areas of northeastern Alberta.

The report likens the push to develop the oilsands to a gold rush.

"The oilsands underlie an area of 149,000 square-kilometres, which is about 23 per cent of the province of Alberta," one of the report's authors, Dan Woynillowicz, said. "As these oilsands have been acknowledged globally, it vaulted Canada from 21st place to second in terms of international oil reserves.

"The price of oil has risen, the cost of operating these mammoth plants has decreased, and now we're seeing what is ultimately a 21st century gold rush."

But companies working in the area says they already work to limit harm to the environment. And both industry and the provincial government dismissed the report's suggestion that royalty rates be increased.

Companies pay a one-per-cent royalty at a project's start, before jumping to 25 per cent after it recovers its costs.

"It's nice to say we want you to come and invest $5 [billion] to $10 billion, and once they have their money in you change the rules," Energy Minister Greg Melchin said. "I don't think that's fair, or what Albertans would expect either."

Woynillowicz says their biggest concern is that provincial and federal governments aren't doing enough to protect the water, air supply and boreal forests.

"Environment Canada has noted that Alberta's oil and gas industry, on an annual basis, clears the same amount of forest that Alberta's entire forest industry clears," he said. "The key difference being that the expectation of government about what will be returned to the landscape are drastically different."

Woynillowicz says the forestry industry must replant the trees it takes, while oil and gas companies are only obliged to return the land to grass.

Alain Moore, with Syncrude, says 25 per cent of the money it's spending on a current expansion is for improving its environmental performance, including an attachment for each piece of equipment that drastically reduces its sulphur dioxide emissions.

Moore says the new equipment should reduce those emissions by about 60 per cent. And he says Syncrude has reclaimed more than 4,000 hectares of land, including the planting of more than three million trees and shrubs.

"As we look forward over the next 10 years, we're forecasting to reclaim land as fast as we're disturbing," he said. "So our footprint is not expanding on that front."

Environment Minister Guy Boutilier says existing environmental laws are effective, but that more could be done to protect the environment.

"I do not disagree with the fact that any effort that we can take as Albertans and as Canadians in helping reduce greenhouse gases, we should," he said. "I'd like to see this development stretched out over many, many years.

"The question is, how do you balance the most important environmental initiatives with economic development initiatives, and we're going to endeavour to do both."