The Government of Canada’s Response to the Environmental Assessment Report of the Joint Review Panel on the Kearl Oil Sands Project (Archived)

On March 5, 2008, the Federal Court issued its judgement in judicial review application T-535-08 concerning the Joint Panel’s Environmental Assessment Review of Imperial’s Kearl Oil Sands Project. The court directed the Joint Panel to provide a rationale for its conclusion respecting the significance of greenhouse gas emissions associated with the Project.

As a result, the Joint Panel for the Kearl Project was reconvened on April 11, 2008. On May 6, 2008, the reconvened Joint Panel issued its rationale as an addendum to the original Joint Panel Report. The federal Minister of the Environment received the reconvened Joint Panel’s addendum to the original Joint Panel Report and subsequently released it to the public.

The original Joint Panel conclusion that the proposed Project is not likely to result in significant adverse environmental effects having regard to the implementation of mitigation and follow-up measures, and implementation of the Panel’s recommendations, remains unchanged as a result of this Addendum. The Government of Canada’s original response to the Joint Panel’s recommendations also remains unchanged as a result of the Panel’s Addendum.

The proposed Imperial Oil Resources Ventures Limited (Imperial Oil) Kearl Oil Sands Project (Project) is one of several proposed oil sands developments adjacent to the Athabasca River, about 70 km north of Fort McMurray, Alberta.

In 2005 Imperial Oil filed an application (Application No. 1408771) with the Alberta Energy and Utilities Board (AEUB) to allow for construction and operation of the Kearl Oil Sands (KOS) Project. The KOS Project includes the design, construction, operation, and reclamation of four open pit truck and shovel mines and three trains of ore preparation and bitumen extraction facilities. Each train is designed to produce an average of 16 000 cubic metres (m³) per calendar day of partially deasphalted bitumen. The total project is designed to produce a maximum capacity of 55 000 m³/day of partially deasphalted bitumen for a period of 50 years. The KOS Project also includes tailings management facilities and other supporting infrastructure. Imperial Oil also applied (Application No. 1414891) for approval to construct and operate a cogeneration facility consisting of three 85 megawatt units for the KOS Project.

An environmental assessment of the Project was undertaken jointly with Alberta under the Canada – Alberta Agreement for Environmental Assessment Cooperation.

The Project requires: (i) Fisheries and Oceans Canada (DFO) Authorization pursuant to subsection 35(2) of the Fisheries Act. Prior to the issuance of any federal approvals it was necessary to conduct an environmental assessment for the Project under the Canadian Environmental Assessment Act (CEAA).

A Canada – AEUB environmental assessment Panel (the Joint Panel) considered the applications at a public hearing held in Fort McMurray, Alberta from November 6 to 10 and 14 to 16, 2006, in Nisku, Alberta from November 20 to 24 and in Edmonton, Alberta from November 27 to 29, 2006.

The Joint Panel issued its report on February 27, 2007. With regard to its responsibilities under CEAA and to its terms of reference, the Joint Panel concluded that the proposed Project is not likely to result in significant adverse environmental effects, provided that the proposed mitigation measures and the recommendations of the Joint Panel are implemented.

With respect to Greenhouse Gas Emissions, the Government of Canada acknowledges the Panel’s view that the Addendum “must be interpreted within the context of Decision 2007-013, particularly section 13 of that decision which specifically addressed air emissions”.

The Addendum dated May 6, 2008, stated:

• While the Joint Panel acknowledges that the projected GHG emissions of 40 kg of CO_2e per barrel for the Project represent considerable GHG emissions, there was very little evidence before the Joint Panel to suggest that this release will result in significant adverse environmental effect.
• The Joint Panel considers it relevant to note that a significant proportion of the evidence presented on NO_x/SO_x and GHG was regional in nature and focused on the pace of development in the area rather than the Project itself.”

The Government of Canada accepts this opinion.

The Government of Canada notes that, with respect to mitigating factors for greenhouse gas emissions specifically, the Addendum references (i) emission intensity targets imposed by the Government of Alberta; and (ii) proposals by Imperial Oil to reduce GHG emissions. The material passages from the Addendum are:

• “It was the evidence of AENV that it may require Imperial to reach its stated GHG intensity target of 40 kg of CO_2e per barrel in any EPEA approval granted for the Project. The Joint Panel finds that it must give AENV’s endorsement of the target significant weight in its consideration of the adverse environmental effects of the Project given AENV’s role as the provincial agency responsible for establishing, monitoring and enforcing emission standards.
• Another important factor considered by the Joint Panel were the measures proposed by Imperial to reduce Project air emissions, including GHG. The Joint Panel also finds that the following measures proposed by Imperial for the Project will have the effect of mitigating Project emissions including GHG.
  1. Cogeneration for steam and electricity production;
  2. Selection of the low temperature process to extract bitumen from oil sands;
  3. Installation of vapour recovery systems on appropriate tankage to comply with EUB Guide 60 (now Directive 60);
  4. Compliance with EUB Guide 60;
  5. Design and operation of the plant emergency relief and flare system to comply with EUB Guide 60, to ensure there is no continuous flaring and to ensure that flares operate at high efficiency;
  6. Management of fugitive emissions through a program aligned with many of the objectives and strategies in the CCME “Environmental Code of Practice for the Measurement and Control of Fugitive Emissions from Equipment Leaks”;
  7. Regular maintenance on mine fleet vehicles to retain performance;
  8. Optimization of ore loading on haul trucks to maximize efficiency;
  9. Optimization of mine haul routes to minimize fuel consumption;
  10. Post start-up energy audits;
  11. Reporting on GHG emissions; and
  12. Benchmarking performance against other operations.

The Joint Panel considers all of these measures to be economically and technically feasible and finds that their implementation will likely reduce air emissions generally and that implementation of the majority of these items will likely reduce Project GHG emissions below AENV’s proposed 40 kg of CO_2e per barrel GHG intensity target. In the Joint Panel’s view these measures, in conjunction with AENV’s intensity target will likely mitigate any significant GHG effects of the Project.

The Government of Canada accepts and agrees with these statements and opinions.

The Government of Canada also notes that the Addendum emphasized the necessity of urgent development of GHG Regulatory Framework by Canada and Alberta:

• “The Joint Panel wishes to emphasize its view, as stated previously in Decision 2007-013, that the Governments of Canada and Alberta must address the issue of GHG emissions and other key issues with urgency if development of the oil sands is to continue at the proposed pace. Further, the Joint Panel considers it necessary to restate its recommendation that EC work with AENV in the development of the province’s GHG regulatory framework.”

The Government of Canada accepts this opinion.

Environment Canada is working with Alberta since GHG is a shared area of responsibility, and recognizing that implementation of Alberta GHG regulations and the federal regulatory framework and its proposed regulations will benefit from close collaboration.

The Government of Canada is taking steps to develop a federal regulatory framework for GHG emissions. In Toronto, Ontario, on April 26, 2007, the Honourable John Baird, Minister of the Environment, unveiled Turning the Corner: An Action Plan to Reduce Greenhouse Gases and Air Pollution. This included a Backgrounder entitled Action on Industrial Greenhouse Gas Emissions. The Federal Government announced more details of its regulatory framework for climate change on March 10, 2008 with the publication of five documents:

• Taking Action to Fight Climate Change (http://www.ec.gc.ca/doc/virage-corner/2008-03/brochure_eng.html)
• Regulatory Framework for Industrial Greenhouse Gas Emissions (http://www.ec.gc.ca/doc/virage-corner/2008-03/541_eng.htm)
• Canada's Offset System For Greenhouse Gas (http://www.ec.gc.ca/doc/virage-corner/2008-03/526_eng.htm)
• Canada's Credit for Early Action Program (http://www.ec.gc.ca/doc/virage-corner/2008-03/cea_eng.html)
• Detailed Emissions and Economic Modelling (http://www.ec.gc.ca/doc/virage-corner/2008-03/571/tdm_toc_eng.htm).

The Government of Canada is continuing its work on this initiative on an urgent basis.

The Government of Canada included the expected emissions from the operation of the Project in its Greenhouse Gas Framework.

The Joint Panel report contains nine (9) recommendations to the Government of Canada. These Panel recommendations relate to: commitments to provide resources in support of regional initiatives, especially the Cumulative Environmental Management Association (CEMA) working groups and the implementation of Phase II of the Water Management Framework for the lower Athabasca River; collaboration with Alberta and Imperial in the development and implementation of regional monitoring programs and surveys to evaluate cumulative environmental effects on fish habitat; participation in technology review and development; and ensuring that Imperial complies with federal regulatory requirements.

The Joint Panel’s recommendations to the Government of Canada are addressed through this federal response, as proposed to be approved by the Governor in Council, and in consultation with other federal agencies, pursuant to subsection 37(1.1) of CEAA.

The Government of Canada accepts the conclusions of the Joint Panel as presented in the report. In preparation of this Government of Canada Response, DFO, as the Responsible Authority (RA’s) under CEAA, considered the report submitted by the Joint Panel. The Government of Canada, through the RA under CEAA, will ensure that the appropriate follow-up programs are designed and implemented as well as ensuring the implementation of appropriate mitigation measures, as set out by the Joint Panel and Imperial Oil in the environmental assessment, for areas of jurisdiction that the Government of Canada has regulatory responsibility.

The federal government will work with Imperial Oil, provincial and municipal governments, Aboriginal Groups and regional stakeholders to carry out the recommendations in the Joint Panel report as noted in the response.

The Panel lists nine recommendations specific to the Government of Canada. In relation to these, the Government of Canada states the following:

Recommendation 1

Environment Canada (EC) and Alberta Environment (AENV) work together to assess the need for a mine fleet emissions technology review and regulation development process (Section 13.7);

Response:

The Government of Canada accepts this recommendation.

EC believes that degradation in regional air quality can be minimized by requiring the application of best available technology and best management practices. EC will work with AENV to assess the need for a mine fleet emissions technology review and regulation development process. EC will also work

with AENV and oil sands operators to assess the technology development and implementation of retrofit NO_x (nitrogen oxide gases) and PM (fine particulate matter) after-treatment technology.

Recommendation 2

Fisheries and Oceans Canada (DFO), AENV, the oil sands industry, and all other affected stakeholders dedicate the resources, staff, and funding to ensure that Phase II of the Water Management Framework for the Athabasca River is completed in a comprehensive manner and on time (Section 14.1.9);

Response:

The Government of Canada accepts this recommendation.

DFO and AENV are committed to ensuring that Phase II of the Water Management Framework (WMF) for the lower Athabasca River is implemented in accordance with the terms of the WMF. Both AENV and DFO expect CEMA, or a similarly inclusive stakeholder process, will be instrumental in providing the input required for Phase II.

Recommendation 3

Phase II of the Water Management Framework be implemented by January 1, 2011, in keeping with the stated commitments of the Governments of Alberta and Canada (Section14.1.9);

Response:

The Government of Canada accepts this recommendation.

The Governments of Alberta and Canada are committed to ensuring that Phase II of the Water Management Framework (WMF) for the lower Athabasca River is implemented in accordance with the terms of the WMF.

Recommendation 4

DFO and AENV incorporate an ecological base flow (EBF) into the final Water Management Framework for the Athabasca River (Section 14.1.9);

Response:

The Government of Canada accepts this recommendation.

Ecosystem base flow (EBF) is incorporated into the WMF and is defined as the threshold streamflow value below which a component of the aquatic ecosystem is believed to be under increased stress. Future research will help define a threshold below which one could say that there would be an unacceptable level of risk to the river.

Recommendation 5

Canada raise the issue of integrating all regional monitoring systems with the appropriate multistakeholder forums, having regard for existing priorities and resources; AENV should determine how integration could best be accomplished (Section 14.3.6);

Response:

The Government of Canada accepts this recommendation.

The Government of Canada currently participates with Alberta, Industry, and other stakeholders, in the development and implementation of regional monitoring programs. The Government of Canada will continue to participate in regional monitoring programs and, where appropriate, raise the issue of an integrated approach to regional environmental monitoring to support adaptive management of cumulative effects in the Athabasca oil sands region.

Recommendation 6

DFO continue discussions with Imperial Oil towards establishing a no net loss plan (NNLP) that meets the objectives of the Fisheries Act in terms of fish habitat losses and disturbances (Section 15.1.3);

Response:

The Government of Canada accepts this recommendation:

DFO will continue to work with Alberta, Imperial Oil and other stakeholders to ensure that Imperial Oil finalizes a detailed No Net Loss Plan (NNLP) for Fish Habitat Compensation that conforms with the Department’s Policy for the Management of Fish Habitat. The detailed NNLP will include an estimation of the fish and fish habitat losses, mitigation measures, fish habitat compensation strategies, and monitoring. Consistent with the requirements of the Canadian Environmental Assessment Act and Fisheries Act any Fisheries Act authorizations issued by DFO in relation to the Project will contain specific conditions to ensure that mitigation measures for the protection of fish and fish habitat are implemented; that monitoring and follow-up studies to address the efficacy of mitigation measures and verify impact predictions are undertaken; and that habitat losses identified are adequately compensated.

Recommendation 7

EC and DFO, together with AENV and other regional stakeholders, develop the parameters required for regional monitoring for cumulative effects on fish habitat in the lower Athabasca River and Muskeg River watersheds (Section 15.1.3);

Response:

The Government of Canada accepts this recommendation.

Both EC and DFO will continue to work with AENV and other regional stakeholders to consider alternative approaches and to establish the parameters required for regional monitoring for cumulative effects on fish habitat in the lower Athabasca River and Muskeg River watersheds.

Recommendation 8

Canada take a more active and direct leadership role in all aspects of the Cumulative Environmental Management Association (CEMA) (Section 16.6).

Response:

The Government of Canada accepts this recommendation:

The Government of Canada is actively involved in CEMA through membership of EC, DFO, NRCan, HC, and CEAA, who are also represented on the CEMA Management Committee by EC. In addition to providing resources, DFO and EC currently participate in various working groups of CEMA providing expertise and focusing efforts on the resolution of issues identified to be of the highest priority. The Government of Canada is committed to ongoing support of CEMA. With respect to the Government of Canada's level of support to CEMA, the Government of Canada will also evaluate any feedback and recommendations made during the current oil sands development initiatives (e.g. the Alberta multi-stakeholder consultation process) in order to inform on-going support requirements and commitments.

Recommendation 9

EC collaborate with AENV in a review of the cumulative impacts on the Yellow Rail in the oils sands region using appropriate regional nocturnal surveys in areas of potentially suitable habitat within the next two years (Section 12.1.10)

Response:

The Government of Canada accepts this recommendation:

The Yellow Rail, a migratory bird (listed in the Species at Risk Act as a species of special concern) could be affected by regional development. As stated at the hearings, EC believes that a regional oil sands industry committee is the most appropriate forum through which regional nocturnal surveys should be carried out, and that the results of these surveys should inform the determination of mitigation measures. EC will collaborate with AENV, the proponent and other necessary agencies and stakeholders, by providing advice and expertise on survey protocols, study design and any resulting mitigation measures.