CALGARY, Alberta (Reuters) - The government of the crude-producing province of Alberta does not want to stop the work of an independent environmental agency, the environment minister said on Thursday, but she is still reviewing options for its future as its funding winds down.

Giant dump trucks haul raw tar sands at the Suncor tar sands mining operations near Fort McMurray, Alberta, September 17, 2014. REUTERS/Todd Korol

The agency, the Cumulative Environmental Management Association (CEMA), was set up in Alberta to advise regulators about oil sands impacts based on recommendations created by representatives government, industry, aboriginal communities and civil society groups.

Although the government informed CEMA in June that it would no longer require companies to cover costs of agency’s annual C$5 million ($3.76 million) budget, Environment Minister Shannon Phillips said in an interview that Alberta was working on a larger plan to improve monitoring in the oil sands.

“That doesn’t mean less engagement from communities,” Phillips said. “It doesn’t mean shutting down avenues or vehicles for communities to engage in the environment and resource development around them that affects them. It means more than that.”

The aboriginal members have said CEMA allows them to engage directly in ongoing research in areas such as local air and water pollution from projects.

Alberta’s oil sands, vast deposits of tar-like bitumen, are the world’s third-largest crude reserves, but also carry some of the highest costs globally because of the scale of projects that require vast amounts of water and energy.

Canada’s largest oil and gas lobby group, the Canadian Association of Petroleum Producers, has called for CEMA to shut down, saying that monitoring work and research is continuing through other bodies.

Aboriginal communities have said the other research organizations do not consult or engage them adequately.

“Clearly on the aboriginal side, the groups involved in our region have decided and entrusted CEMA to ... fill the void of any government leadership over the years,” said CEMA president Daniel Stuckless.

CEMA said it was already preparing layoff notices for its small staff of eight, with its funding due to expire by December.

Phillips, whose left-leaning New Democratic government was elected in May ending 44 years of Conservative rule in the western Canadian province, said she planned to meet with CEMA staff soon to discuss how to pursue their work as part of larger efforts to improve monitoring in the oil sands.

“That’s a long-term project, it takes more than just a quick four months after you’re sworn into cabinet.”