DRAFT Sherritt: Dodds-Roundhill Coal Gasification Project: The project application and review process and some issues to consider

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1 DRAFT Sherritt: Dodds-Roundhill Coal Gasification Project: The project application and review process and some issues to consider These notes have been compiled by staff at the Pembina Institute, to assist local residents. This summary is not a formal statement of the Institute s position. We have made every effort to ensure the accuracy of the information. However, we advise that we cannot guarantee that the information provided is complete or accurate and that any person relying on this overview does so at his or her own risk. The notes contain: 1. Background information on the project 2. Projected impacts of project 3. Regulatory Review Process and opportunities for public input 4. Terms of Reference for the Project Application and Environmental Impact Assessment - Points for Consideration 5. General mining information and impacts 6. Broader implications beyond the mine 7. Additional resources 8. Images of coal mine For additional information or assistance, please contact: Mary Griffiths Senior Policy Analyst maryg@pembina.org Jennifer Grant Policy Analyst jenniferg@pembina.org 1. Background information The following information summarizes the key objectives of the Project as summarized in the Public Disclosure document found at Sherritt wishes to build a surface coal mine and a coal gasification facility that will process coal feedstock to produce synthesis gas (syngas). The gasification unit will include the processing steps required to produce 320 million standard cubic feet/day (scfd) of syngas and to further refine it into approximately 270 million scfd of pipeline grade hydrogen. Syngas can be used for fuel (e.g. for as a replacement to natural gas currently being used to upgrade bitumen in oil sands), as a petrochemical feedstock or can be further processed into high purity hydrogen (hydrogen has many potential energy uses, including powering vehicles, heating homes and offices, and fueling aircraft) 1

2 Sherritt is proposing a phased approach, initially consisting of a single gasification unit and a mine large enough to support two gasification units. A second gasification unit will be considered for development once the first is operational. Sherritt s has disclosed its long-range plans include two additional gasification units, similar in size to the first two, which will require a corresponding increase coal consumption rate and in the mine permit area. The upcoming EIA will not address these third and fourth units. Location: located approximately 80 km southeast of Edmonton just south of the town of Tofield and village of Ryley, and north of the hamlet of Round Hill The proposed mine and plant are located in the Central Parkland Region (Figure 1). Figure 1. Central Parkland Region Photograph Courtesy the Provincial Museum of Alberta, Edmonton, Alberta Total area of mine: development boundary occupies 312 square kilometres (31,337 hectares) Life of mine: current mine boundary has enough coal resources to fuel two gasification units for approximately 40 years New Infrastructure required: o a raw water pipeline and an associated water intake; o One or more dedicated product pipelines will be required to deliver the syngas, hydrogen or synthetic natural gas to the market place (most likely Alberta s Industrial Heartland Region around Fort Saskatchewan); o a pipeline to carry CO2 either to market, possibly for enhanced oil recovery (EOR), or to safe underground storage (sequestration) Project Schedule: Project application to government in early 2008 Receipt of government approvals in early to mid 2009 Plant startup in

3 2. Projected Impacts: - Air o Up to 12,500 tonnes per day of commercial grade carbon dioxide may be produced during the gasification process. o The carbon dioxide from the process is highly concentrated and therefore relatively easy to capture. Captured carbon dioxide could be used for enhanced oil recovery (EOR) operations or sequestered into suitable depleted oil and/or gas fields. Sherritt states that a pipeline to carry CO2 either to market or for safe underground storage (sequestration) will likely be required for the project. o Sherritt s overall GHG management plans, including CO2 capture and any plans for the use of offsets, (nationally or internationally) and the expected results of implementing the plans will be provided in the EIA. - Energy use o Power demand during the operational phase may require generating capacity of approximately 150 megawatts (which is about one-third the capacity of the EPCOR Genesee power plant expansion which was approved in 2001/2). This will require new transmission lines, though some power may be generated at the site in a co-generation plant. - Land disturbance o Access road development into the plant and mine sites will be required. The location of these roads will be determined once the mine plan has been finalized and the plant site selected. o Rail facilities may be required to facilitate the movement of equipment to the Project site or related to the transportation of supplementary feed stocks to the site. - Water o The development of the mine (dewatering, surface drainage etc.) will significantly affect groundwater aquifers and surface water hydrology in the region. o Dewatering refers to the removal of groundwater with pumps or drainage systems in order to gain access to a resource below, or facilitate an activity that requires the ground to be relatively dry (e.g. mining). 1 Decreases in river runoff or spring flow, land subsidence (sinking or lowering), reduction or elimination of vegetation due to the lowering of water tables, are common negative impacts brought about by intense groundwater extraction. 2 o For example, CNRL has estimated that for its Horizon surface mine, its aquifer depressurization will have a potential drawdown zone of 98 square kilometres (9,820 ha) in size. 3 The drawdown zone refers to the lowering of groundwater caused by pumping. o The Sherritt project will require 2.4 to 9.5 million cubic metres of water a year depending on the type of cooling process used (see p. 13 of the Public Disclosure Document). Sherritt will identify acceptable source(s) of water for the Project and address any potential effects that water withdrawals may have on the selected source(s). This amounts to 21,917 to 86,757 bathtubs of water use per day. 4 1 Susan Rutherford, Groundwater Use in Canada (West Coast Environmental Law, 2004 [cited April ]); available from 2 S. Zektser, H. A. Loáiciga, and J. T. Wolf, "Environmental Impacts of Groundwater Overdraft: Selected Case Studies in the Southwestern United States," Environmental Geology 47, no. 3 (2005). 3 Canadian Natural Resources Ltd., "Horizon Oil Sands Project. Application for Approval, Volume 6, Section 4," (2002). 4 This is based on a bathtub with a 300 litre capacity. 3

4 o Water supply is a concern in the Industrial Heartland. Alberta Environment has not had the opportunity or the resources to undertake a review to determine whether there is sufficient water available from the North Saskatchewan River to support future energy related projects Regulatory Review Process and opportunities for public input The following text outlines opportunities for formal public intervention which are listed in the checklist below: Review and submit comments on the EIA Terms of Reference (this stage is complete) Submit a Statement of Concern to Alberta Environment Letter of Objection to the EUB Notice of Hearing Hearing Written Submission Hearing Oral Submission and Cross Examination In Alberta, the development of a coal mine is based upon a two-stage approval process. 1. Permitting stage This stage deals primarily with the conceptual plans for the mine project as a whole. The permitting stage is carried out under the disclosure requirements of the Coal Development Policy for Alberta, the EIA requirements of Alberta Environment, and the permit requirements of the EUB. 2. Licensing stage - This stage is designed to examine, on an individual basis and in much greater detail, the specific components of the project. These include licences from the EUB for individual pits and rock dumps, as well as more detailed approvals from Alberta Environment for air and water emissions and reclamation plans. The Alberta Energy and Utilities Board (EUB) regulates energy projects, holds hearings, and provides the permit or licence for a company to operate an energy project such as a coal mine. Under Section 10(1)(b) of the Coal Conservation Act, no person shall develop a mine site without first applying for, and obtaining, a permit from the EUB. Similarly, under Section 23(1)(a) of the Coal Conservation Act, no person shall construct or begin operations at a new coal processing plant without applying for, and obtaining, an approval from the EUB. The coal mine associated with the gasification project will require a coal mine permit and licence. The plant will require a coal processing plant and industrial development permit, all under the Coal Conservation Act and Regulations. The proponent must submit an application to both the EUB and Alberta Environment. Alberta Environment ensures that the proposal complies with environmental regulations. Applications to Alberta Environment are filed under the Alberta Environmental Protection and Enhancement Act (EPEA) and the Water Act. As stated in Section 40 of EPEA, the purpose of the environmental assessment process is to: support the goals of environmental protection and sustainable development; integrate environmental protection and economic decisions at the earliest stages of planning an activity; predict the environmental, social, economic and cultural consequences of a proposed activity and to assess plans to mitigate any adverse impacts resulting from the proposed activity; and 5 Government of Alberta, Investing in Our Future: Responding to the Rapid Growth of Oil Sands Development (2006 [cited April ]); available from page

5 provide for the involvement of the public, proponents, the Government and Government agencies in the review of proposed activities. Environmental Impact Assessments (EIAs) are required by Alberta Environment and the EUB for coal mines that produce more than 45,000 tonnes per year (Environmental Assessment, Mandatory and Exempt Activities Regulation, Schedule 1 (g)). The mining rate per Gasification Unit for the Sherritt Coal Gasification Project is million tonnes (raw coal) per year. Reviewing the Terms of Reference for an EIA is the first opportunity for public comment. 6 The Terms of Reference (TOR) dictate the terms for the environmental impact assessment. 7 The TOR can be found online at: One has to register on line to access the TOR. After the terms of reference are finalized, the company then prepares its application and EIA. The deadline for comments on the draft TOR was February 28, The company next compiles its application and EIA, in accordance with the TOR, and when these documents are complete, they are submitted to Alberta Environment (and the EUB). Alberta Environment, with input and assistance from other government departments, will review the project application and EIA to ensure that the project supports and promotes the protection, enhancement and wise use of the environment. Information presented in the EIA which may include a summary of public consultations may be used as a basis for the EPEA approval, which sets out the environmental conditions under which the company may operate. Once the EPEA approval process is complete, the applicant may be issued construction and operating approvals under EPEA. When the company submits its application, an advertisement appears in the local paper, inviting anyone who is directly affected to submit a Statement of Concern (SOC) to the Director of Approvals at Alberta Environment. This is the opportunity, within the EPEA approval process, for the public to comment on the project application and EIA. Thus, any person who is directly affected by the application may submit a written statement, setting out his or her concerns with respect to the application. 8 The SOC must be submitted before the date specified in the advertisement, which is usually 30 days after the posting of the project application. The AENV Director of approvals determines who is directly affected. Failure to file a statement of concern may affect one s right to file a Notice of Appeal with the Environmental Appeal Board at a later date. Only persons who previously submitted a statement of concern in accordance with section 73 and is declined consideration by the Director s decision may submit a notice of appeal to the Environmental Appeals Board. A company s EIA provides an opportunity for members of the public to carefully review what the company plans to do and is an excellent resource in preparing a SOC. Once the SOC is submitted, the Director under the Act gives consideration to all statements of concern that have been submitted and makes a decision as to whether or not one s concerns are to factor into the overall approval process. At this point, the EUB will review the entire project, including its environmental and social effects and through its regulatory process, critically assess the resource recovery, technology, and environmental and socio-economic impacts of the project. If the EUB determines that the project 6 See Part 2 of the Environmental Protection and Enhancement Act ( 7 It is mandatory for a company to conduct an environmental impact assessment for a coal mine that produces more than 45,000 tonnes per year (Environmental Assessment, Mandatory and Exempt Activities Regulation, Schedule 1 (g)). 8 See EPEA, Section 73 5

6 is in the public interest it will issue a permit and a series of licenses for the mine, an approval for the beneficiation plant, and an Industrial Development Permit (IDP) for the gasification plant. 9 Together, the EUB and Alberta Environment approvals will contain requirements relating to resource recovery, emissions, monitoring, reporting, conservation and reclamation, and will cover all aspects of both the mining and gasification process. The EUB will then make their decision with respect to the Sherritt Coal Gasification Project. Under the Coal Conservation Act, the Board may, 1) grant a permit for the proposed project on the terms and conditions set out in the permit, 2) refuse the application, or 3) hold a hearing. The Board shall not grant a permit unless, in its opinion it is in the public interest to do so having regard to, among other considerations, the efficient use without waste of coal or products derived from coal, and the present and future availability of coal in Alberta (Coal Conservation Act, 1980, Part 6, Section 29). If issues identified in the statements of concern remain unaddressed by the company, then a hearing will be held. A hearing presents a third opportunity to publicly participate or oppose in the energy project. The Energy Resources Conservation Act (ERCA) 10 outlines the rules for a hearing. Section 26 (2) of the ERCA requires that, if it appears to the EUB that its decision on an application may directly and adversely affect the rights of a person, the EUB provide: (1) notice of the application; (2) an opportunity for learning the facts regarding the application; and (3) an opportunity to cross-examine the applicant and to present evidence and argument to the EUB. To participate in this process (to intervene), a person must be directly and adversely affected (e.g., neighbouring landowner of proposed development). A hearing is a formal public process where the company and landowner(s) affected by the proposed development, can present their views to a panel of EUB members. Interveners should ensure they file a letter of objection before the specified deadline, which is published in the Notice of Hearing. This letter of objection must be submitted to both the applicant (the company) and the EUB. People living at a distance from the operation may be able to make a presentation at the hearing, if they can show how they will be adversely impacted. The EUB mails a Notice of Hearing to inform people and organizations affected by an application about the hearing. A Notice of Hearing can also be found in local newspapers or on the EUB Web site at Companies involved in large projects usually hold an open house to explain their proposed project, answer citizens' questions, and address the community's concerns. Once you have submitted your letter of objection, it is time to prepare and submit a copy of your intervention a hearing submission to the applicant, as well as a specified number of copies (as stated in the Notice of Hearing) to the EUB. At the hearing, the project applicant presents its case and may question its own witnesses. Interveners may cross-examine those witnesses. Once the applicant has presented its case and been cross examined, interveners are given the opportunity to present their cases orally. After the intervener gives direct evidence, the lawyer for the applicant may cross-examine, followed by the 9 See Part 6 of the Coal Conservation Act: 10 See ERCA at: 6

7 other interveners who wish to cross-examine. Interveners should also be prepared to be cross examined by EUB staff and members of the panel. 11 As noted in the Public Disclosure Document, Sherritt will also apply for Federal authorizations, as required, under the Federal Fisheries Act, Navigable Waters Act and any other relevant Federal legislation. Under the Federal application process, it is also possible that a review under the Canadian Environmental Assessment Act may be required. 4. Terms of Reference for the Project Application and Environmental Impact Assessment Points for Consideration 2.1 Assessment of Need - Should look at the option of NOT proceeding with the plant. i.e., what will be left intact that will be lost if the facility is built. This is the baseline with which everything should be compared Project Components and Development Timing - Should include maps showing the geographic area impacted at each stage of development and the waterways, etc. impacted. 2.3 Regulatory - Could try asking that the TOR Water requirements be considered AT THE SAME TIME as the merits of the project. The EUB should not be able to grant approval for project if there is not sufficient water for it or if the environmental impacts are unacceptable. 2.5 EIA Summary - Ask specifically that they mention and quantify the potential impacts on air, land and water (rather than just environmental and land use conditions ) Project components - Should include pipelines and water intake facilities, as well as water wells. 3.2 Process description - b) Alternative technologies considered. Should include a section identifying the reason for the various technologies chosen and comparing the difference in impacts of different potential technologies. - For example: What are the relative merits of the different types of cooling system (e.g., impacts on volume of water used, energy used, air impacts mist or fog creation) 3.4 Utilities and Transportation - Should include evaluation of benefits of using group (bus) transit for workers to the facility during both construction and operation. j) Plans to minimize impacts should include a stakeholder process to discuss how impacts with local community may be minimized (i.e., not satisfactory for the company to develop its own plans in a vacuum, as they may not meet the community requirements) Water Supply - Should be required to critically evaluate the relative merits and disadvantages of different sources of supply, including an assessment of cumulative impacts (i.e., not only the 11 Energy and Utilities Board, Enerfaqs 2: Having Your Say at an Eub Hearing (2006 [cited April ]); available from ublishedcontent/publish/eub_home/public_zone/eub_process/enerfaqs/enerfaqs2.aspx. 7

8 impact of the Sherritt proposal, but of other projects in the area, e.g., withdrawing water from the N. Saskatchewan River) Greenhouse Gas Emissions. - Should require a detailed evaluation of how Sherritt would obtain a carbon neutral facility. This can be done if they use carbon capture and storage, which is feasible with a hydrogen facility. - Landowners can negotiate for this. - Explain that intensity targets are not satisfactory (the level of greenhouse gases in the atmosphere may continue to increase, with an increase in industrial activity, even if the intensity figure improves). - Carbon capture means that a CO2 pipeline is also needed. Sherritt says that the pipelines will require separate applications, but it would be a good idea to get some general ideas for their route specified in the TOR. N.B. The route should avoid low-lying areas (since CO2 is heavier than air). 4. Environmental Impact Assessment - Look critically at all the requirements in this section. For example: EIA Study Area - How big are the local and regional study areas? Are they big enough esp. the regional study area. Does it include all of Beaverhill Lake? This will probably be affected by the impacts on groundwater and on Amisk Creek Make sure that the impact of changes in water levels (surface, wetlands and groundwater) on wildlife habitat, and on migratory birds are evaluated Surface Water and Groundwater. - Ask for the development of various scenarios (including a worst case scenario), for different levels of precipitation (bearing in mind that precipitation may be different in future as a result of climate change) (i) Study should look at the impacts of draining the mine site on groundwater flows, at EACH stage in the project (and the impacts on Amisk Creek and Beaverhill Lake must be included). o o Sherritt says their project will impact the Amisk Creek. This flows into Beaverhill Lake. Beaverhill Lake is already suffering from declining water levels and is a very important lake for migratory birds. Beaverhill Lake is internationally recognized as a Ramsar site. The Ramsar Convention, signed in 1971, is an international program which promotes the protection of important wetlands throughout the world. (see To inquire what the federal government is doing to protect migratory birds and the Ramsar site, etc., contact Environment Canada, Environmental Protection Branch, Prairie and Northern Region at (780) (l)(i) Should be requirement for groundwater monitoring for water levels, as well as for contamination. Monitoring should be set up as soon as possible, so there is a baseline prior to development. This is crucial. The density of monitoring wells should be sufficient to ensure that any effects are identified early. This also needs to be included in the Appendix, under Groundwater. 8

9 5. Environmental impacts of coal mines Conventional mining involves a series of stages in its development, operation and closure: 1. exploration and evaluation of site for its mineral potential; 2. development and operation of the mine; 3. processing/refining of the ore; and 4. closure and reclamation. Development It is advised that concerned citizens review the EIA to determine the specific impacts associated with the proposed coal mine. When reviewing the EIA, you may wish to consider the following: Impacts associated with the removal of overburden (soils and sub soils, with associated vegetation) to expose the coal; for example, are the locations where the topsoil and overburden are to be stored during mining satisfactory? Water impacts. How will water that is pumped from the mine, to keep the pit dry, be discharged? What will be the effect on surface waters? What will be the effect of changes to surface water flows and patterns (e.g., reduction in flow in Amisk Creek)? Will there be more organic matter or minerals in the stream water? N.B. Alberta Environment has strict standards on what can be released to surface waters (see Surface Water Quality Guidelines for Use in Alberta, 12 and for the management of mining waste water (see Alberta Coal Mining Waste Water Guidelines: What will be the effect of drainage on groundwater? What is being done to minimize any erosion? What is being done to reduce the dust and noise from mining operations? Will noise and dust still create problems for those living and working in the area? Also, will there be impacts from lights at the mine, where operations continue through the night? Compare the EIA with the final version of the Terms of Reference, to check whether all issues have been adequately addressed. Refinement and processing Consider the increased total loading of air contaminants in the region, the incremental contributions to regional nitrogen oxides and sulphur dioxides emissions, and the incremental contributions of particulate matter and concerns with adverse effects on human health. Noise and dust: may be an issue; strict controls need to be in place to limit dust and noise (and there should be provision for the strict enforcement of those controls). Routes for traffic are also an issue. Buses to transport workers to/from the facility should be used to reduce traffic flows. Nitrogen oxides and sulphur dioxides all contribute to the formation of acid rain. Closure/Reclamation Under the EPEA, Alberta Environment protects Alberta's land resource base by ensuring that land used for coal mining is developed and reclaimed in an environmentally sound manner. These measures ensure that the disturbed land is reclaimed to meet the goal of equivalent land capability which is described in the Conservation and Reclamation regulation as, the ability of the land to support various land uses after conservation and 12 The guidelines provide numerical concentrations or narrative statements to support and maintain, for example, the protection of fresh water and aquatic life. (e.g., values estimating the highest concentration of a material in surface water to which an aquatic community can be exposed briefly without resulting in an unacceptable effect are provided). 9

10 reclamation is similar to the ability that existed prior to an activity being conducted on the land, but that the individual land uses will not necessarily be identical 13 Reclamation is challenging because as the surface cover is excavated, vegetation cover is lost, and the soil structure is permanently altered. Consider the following: Is the proposed reclamation process in the EIA satisfactory (at least on paper)? Nature of the impacts may be long term is there a long term monitoring plan in place? Re-establishing native plant communities can be very difficult. Are the "Native Plant Revegetation Guidelines for Alberta, February 2001 being considered? See: ent#1 Reclamation certificates for lands disturbed by mining must be issued by Alberta Environment before a company is relieved of responsibility for a property. Is there a reclamation schedule with progressive milestones? Are there sufficient security funds deposited so that reclamation costs aren t borne by tax payers should company (for example) go bankrupt? A set of guidelines entitled Petroleum Industry Activity in Native Prairie and Parkland Areas: Guidelines for Minimizing Surface Disturbance (Native Prairie Guidelines Working Group, 2001) recommends best practices for the petroleum industry. The guidelines document can be found at: 6. Broader implications beyond the mine Water use: - Need to consider the diameter of the water line or waste water lines. - Groundwater use is a concern as it is an important source of drinking water as well as the primary source of water for livestock watering and crop irrigation. - Groundwater is an integral component of the hydrological cycle; our streams, lakes, wetlands, and associated ecosystems depend upon groundwater. Groundwater is not limitless and requires responsible management to protect its integrity, security and sustainability If fresh water from the N. Saskatchewan River is used pipeline breaks are not likely to be a concern. If the line is for grey water from another treatment process, would need to find out the salinity of water, and other aspects about its quality. - The removal of a large volume of water from the N. Sask. River is a concern, since the project requires 2.4 to 9.5 million cubic metres of water a year depending on the type of cooling process used - The company mentions they may use grey water (from another treatment process) but if this water would otherwise flow back to the N. Sask. River, the diversion of water for the gasification process still reduces the flows in the river. 7. Additional resources For additional legal services or guidance: The Environmental Law Centre: Their mission is to ensure that laws, policies and legal processes protect the environment. In pursuit of this mission, the Centre seeks: 1) the enactment and effective enforcement of sound 13 "Conservation and Reclamation Regulation, Alberta Regulation 115/1993.". 14 Rutherford, Groundwater Use in Canada. 10

11 environmental laws and policies; and 2) informed public participation in environmental regulatory, law-making and decision- making processes. Edmonton office: Website: Additional information: A web search brought up a media release from the NDP which identifies some issues. &t=11&i=1 Links to mining sites: - Western Mining Action Network - Mining Watch Canada 8. Images of coal mine in Saskatchewan: 11

12 Photos courtesy of University of Saskatchewan: e.usask.ca/ski/mining/search/mineral_types/energy/coal.html References: Canadian Natural Resources Ltd. "Horizon Oil Sands Project. Application for Approval, Volume 6, Section 4." pp. 4-37, "Conservation and Reclamation Regulation, Alberta Regulation 115/1993." Energy and Utilities Board Enerfaqs 2: Having Your Say at an Eub Hearing 3B/extContent/publishedcontent/publish/eub_home/public_zone/eub_process/ener faqs/enerfaqs2.aspx. (accessed April 10, 2007). Government of Alberta Investing in Our Future: Responding to the Rapid Growth of Oil Sands Development. (accessed April 10, 2007). Mining Watch The Boreal Below: Mining Issues and Activities in Canada's Boreal Forest Region. (accessed November 13, 2006). Rutherford, Susan Groundwater Use in Canada. West Coast Environmental Law, (accessed April 11, 2007). 12

13 Zektser, S., H. A. Loáiciga, and J. T. Wolf. "Environmental Impacts of Groundwater Overdraft: Selected Case Studies in the Southwestern United States." Environmental Geology 47, no. 3 (2005):