News Release 16 September 1999

FOR RELEASE AT 2:00 PM

EUB APPROVES IMPERIAL OIL COLD LAKE EXPANSION PROJECT

Calgary, Alberta (16 September 1999) The Alberta Energy and Utilities Board (EUB) today said that it is prepared, with the approval of the Lieutenant Governor in Council, to approve an application by Imperial Oil Resources Limited (Imperial) to expand its bitumen recovery operations at Cold Lake. The expansion project includes a new area development called Mahkeses, an electrical power cogeneration plant, and the drilling of additional wells at the company's existing development areas. The expansion project is expected to recover about 4 800 cubic metres (30 000 barrels) of bitumen product per day, and would increase the production capabilities of Imperial's Cold Lake operations by about 25 per cent.

Imperial's application was the subject of an EUB public hearing held in late 1998 in Cold Lake South, Alberta. The Board agreed that the Mahkeses development is needed to optimize recovery of the bitumen resources in the Cold Lake area, and represents the next logical step towards the development of Imperial's lease. Having carefully considered all the evidence, the Board has determined that the application is in the public interest, with significant public benefit.

Among the important issues the Board needed to consider were the environmental impacts of Imperial's operations, including those relating to potential effects on local aquifers and water supplies. From the evidence, the Board cannot conclude that the source of elevated arsenic in local water wells in the Cold Lake region can be attributed to the Imperial project. Arsenic occurs naturally in both the sediments and groundwater in the Cold Lake area and elsewhere in the province. The Board notes that elevated arsenic levels in well water were found in the area before Imperial's operations began.

From the evidence, the Board believes that the project can proceed in an environmentally acceptable manner. However, the Board also believes that, given the method of resource recovery used in these operations (cyclic steam stimulation), some additional measures are required to ensure that potentially negative impacts from the project are minimized. To address these, approval conditions and requirements include:

• additional sampling, testing, and studies must be conducted to help assess formation integrity and to provide baseline geological information and further knowledge on properties that can influence groundwater flow, water quality, and casing and cement;
• an enhanced regional monitoring network at existing operations and in the proposed expansion area to monitor groundwater flow directions and groundwater chemistry;
• an enhanced groundwater monitoring network to provide information on water level responses to steam injection;
• a program to monitor potential changes in arsenic concentrations within the groundwater on Imperial's lease;
• an annual summary report on casing integrity and remediation efforts.

The Board is concerned about opportunities for ongoing dialogue between residents and Imperial about its operation, and notes that some issues raised by the community related to the lack of information about existing operations or the impacts associated with past incidents. To promote opportunities for ongoing communication, the Board believes that a permanent forum where public concerns about the industry can be raised would be of value. Therefore, the Board has requested Imperial to explore the possibility of establishing such a forum with other operators in the area and to advise the Board of the results. EUB staff will be made available to participate as necessary.

The Board acknowledges the commitments made by Imperial to Cold Lake First Nations respecting socioeconomic opportunity for its people, and considers such commitments to be binding on the company as a matter of ongoing public trust. The Board encourages Imperial to act on its commitments.

Given the current level of industry activity, the Board also sees merit in the establishment of a committee to monitor regional development in the Cold Lake area. The purpose of this committee should not be to focus on particular operators or projects. Rather it should be a forum to review regional issues, such as infrastructure requirements (roads, services, etc.) and regional studies, with an aim to reduce the burden on all stakeholders through the sharing of data, resources, and costs. The Board will follow up on the establishment of such a committee with the relevant parties.

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This news release and Decision Report 99-22 are available on the EUB Website at http://www.ercb.ca

For more information, please contact :

Dave Morris, Senior Advisor
EUB Communications
Tel. 403-297-7470
Fax 403-297-3757
E-mail: david.morris@eub.gov.ab.ca

NR99-14