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News Release

FOR IMMEDIATE RELEASE

PROVINCIAL/FEDERAL JOINT REVIEW PANEL ISSUES FINAL REPORT ON
JACKPINE OIL SANDS PROJECT

Calgary, Alberta (February 5, 2004) The Joint Review Panel of the Alberta Energy and Utilities Board (EUB) and the Canadian Environmental Assessment Agency released today its final report for Shell Canada Limited (Shell's) Jackpine Project (Joint Panel Report EUB Decision 2004-009). The Jackpine Project includes an oil sands mine, a bitumen extraction plant, cogeneration plant, and water pipeline. The proposed project is located 70 kilometres (km) north of Fort McMurray and 10 km east of Fort McKay.

The report contains an EUB decision under the EUB's provincial legislation and the Joint Panel's conclusions and recommendations pursuant to the Canadian Environmental Assessment Act (CEAA) with respect to the environmental assessment of the project.

With respect to its EUB mandate, the Joint Panel has approved the cogeneration plant and water pipeline and has approved the oil sands mine with 19 conditions. These conditions relate to mining operations, resource conservation, and tailings management. Conditions generally are requirements in addition to, or otherwise expand upon, existing regulations and guidelines.

With respect to its CEAA mandate, the Joint Panel has concluded that the project is unlikely to result in significant adverse environmental effects provided that the mitigation measures proposed by Shell and the recommendations of the Joint Panel are implemented. In addition, the Joint Panel also made recommendations that would, in part, assist the federal and provincial governments to mitigate the environmental effects of the project.

The report follows a public hearing that took place October 6 through 10 and October 15, 2003 in Fort McMurray, Alberta. Participants who provided evidence at the hearing included Shell, other oil sands companies, First Nations, local aboriginal groups, local residents, non-government environmental groups, a local medical staff association, and representatives from provincial and federal regulatory agencies.

While participants raised a number of issues for the Joint Panel to consider, most issues centered on anticipated environmental and socio-economic impacts of the project.

Shell undertook certain commitments that are not specifically required by the EUB's regulations. The Joint Panel expects that Shell will adhere to all commitments it made during the consultation process, in the application and at the hearing.

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 The Alberta Energy and Utilities Board ensures that the discovery, development, and delivery of Alberta's resources take place in a manner that is fair, responsible, and in the public interest.

The Canadian Environmental Assessment Agency administers the federal environmental assessment process, which identifies the environmental effects of proposed projects and measures to address those effects, in support of sustainable development.

This news release, backgrounder, and the Panel's final report (Joint Panel Report EUB Decision 2004-009) are available on the EUB Web site at www.ercb.ca , and on the Canadian Environmental Assessment Agency's Web site at www.ceaa-acee.gc.ca.

For more information, contact:

Brenda Poole Bellows
EUB Communications
Tel: (403) 297-7012
brenda.poolebellows@gov.ab.ca 

Gordon Harris
Canadian Environmental Assessment Agency
Tel. (819) 953-5045
gordon.harris@ceaa-acee.gc.ca

Backgrounder

1. What did Shell Canada Limited (Shell) apply for?

Shell applied for an oil sands mine, bitumen extraction plant, cogeneration plant, and a water pipeline. The project, called the Jackpine Project, would be located approximately 70 kilometres north of Fort McMurray and 10 km east of Fort McKay and be designed to produce 31 800 cubic metres per day (200 000 barrels per day) of bitumen product.

The Jackpine Mine is planned to have full production in 2010 and last 22 years. The estimated capital cost of the project is $2 billion.

2. Why was there a Joint Federal/Provincial Review Panel?

Shell applied to the Department of Fisheries and Oceans (DFO) for approval under Section 35(2) of the Fisheries Act for the alteration, disruption, or destruction of fish habitat. Prior to DFO issuing an authorization, an environmental assessment of the project under the Canadian Environmental Assessment Act (CEAA) was required.

On June 26, 2003, the Federal Minister of Fisheries and Oceans referred the environmental assessment of the Jackpine Project to a review panel, pursuant to section 21(b) of CEAA.

On July 30, 2003, the Canadian Environmental Assessment Agency announced that it was proposing to establish a joint environmental assessment panel for the Jackpine Project. Following a 21-day public comment period, The Honourable David Anderson, Minister of the Environment, and Neil McCrank, Q.C., Chairman of the EUB, signed an agreement (Panel Agreement) to establish the Joint Panel.

3. What was the Joint Panel tasked to do?

Under the Joint Panel Agreement, the Joint Panel was charged with fulfilling the review requirements under CEAA, the Energy Resources Conservation Act, and the Alberta Energy and Utilities Board Act. With regards to the provincial legislation, the Joint Panel must determine whether the project is in the public interest by examining the social, economic, and environmental effects of the project.

Under CEAA, the Joint Panel is required to submit to the Minister of the Environment and to the Minister of Fisheries and Oceans a report providing the Joint Panel's rationale, conclusions, and recommendations relating to the environmental assessment of the Project, including any mitigation measures and follow-up programs.

4. What are commitments?

When applicants make commitments to stakeholders, the EUB takes them into account when arriving at its decision. The EUB expects an applicant to fully carry out the commitments (to the extent that those commitments do not conflict with the terms of any approval or licence affecting the project or any law, regulation, or similar requirement the applicant is bound to observe) or advise the EUB if, for any reason, it cannot fulfill a commitment. At that time, the EUB can assess whether the circumstances of any failed commitment are sufficient to trigger a review of the approval or licence. Affected parties may also ask the EUB to review a licence if commitments made by an applicant remain unfulfilled.

5. What are conditions?

Conditions generally are requirements in addition to or that otherwise expand on existing regulations and guidelines and form part of the EUB approval. An applicant must comply with each condition or it is in breach of its approval and subject to enforcement action by the EUB. Enforcement of an approval includes enforcement of the conditions attached to that approval or licence. Sanctions imposed for the breach of conditions may include the suspension of the approval, resulting in the shut-in of a facility.

6. When are recommendations used?

The Joint Review Panel makes recommendations to relevant authorities when compelling evidence is brought forward by interveners regarding an issue that is outside the jurisdiction of the EUB and when the Joint Panel believe that further mitigation measures may be warranted.

7. What conditions are attached to the approval of Shell's Jackpine Project?

Shell must do the following as conditions of approval:

• Shell shall submit a lease boundary report five years prior to mining activities reaching any common lease boundary. The report must include a comprehensive description of the lease boundary geology and reserves, geotechnical conditions, alternative mining scenarios and impacts, and the costs associated with each, all in accordance with Section 3.1 of EUB Interim Directive (ID) 2001-7: Operating Criteria: Resource Recovery for Oil Sands Mines and Processing Sites (Section 6.2.2).
  
  
• Shell shall submit, for EUB approval, an access road and utility corridor update in its 2006 annual report. The report shall include a resource assessment of the oil sands located in the Sharkbite area and under the modified infrastructure corridor. It shall also include a comparison of alternative access road and utility corridor alignments with respect to resource recovery and other relevant criteria (Section 6.3.2).
  
  
• Shell shall submit, for EUB approval, a resource assessment of the plant site area two years prior to construction (Section 6.3.2).
  
  
• Shell shall submit, for EUB approval, detailed geotechnical design for all external overburden disposal areas at least six months prior to field preparation in those areas (Section 6.4.2).
  
  
• Shell shall submit, for EUB approval, a resource assessment of the three waste disposal areas and reclamation material stockpile two years prior to material placement (Section 6.4.2).
  
  
• Shell shall submit, for EUB approval, a ten-year mine plan and material balance by the earlier of 2008 or six months prior to pit development (Section 6.4.2).
  
  
• Shell must satisfy the EUB, two years prior to construction of either the Khahago surge facility or the tailings disposal area, that the design of the tailings disposal area, including the surge facility, provides for adequate capacity, stability, and minimization of resource sterilization and environmental impact (Section 6.7.2).
  
  
• Shell shall provide an annual report to the EUB on the status of the project and its development commencing on February 28, 2005, or such other date and frequency the EUB may stipulate (Section 6.8.2).
  
  
• Shell shall provide a report on progress in improving the bitumen extraction recovery in every second annual report to the EUB starting in 2008, or such other date and frequency the EUB may stipulate (Section 7.3).
  
  
• Shell shall continue to evaluate tailing solvent recovery unit (TSRU) thickeners technology and report results to the EUB in the 2006 annual report. The report must identify any opportunities to include TSRU thickeners in the project design and construction (Section 7.3).
  
  
• Shell shall report on its progress in dealing with separation characteristics of asphaltenes in the TSRU tailings in its annual report to the EUB commencing in 2005, or such other date and frequency the EUB may stipulate (Section 7.3).
  
  
• On or before February 28 of each year commencing in 2011, Shell shall provide to the EUB a summary of the previous year's operation stating the amount of asphaltene rejected. The amount of asphaltenes rejection shall be limited to 10 mass per cent based on bitumen production (Section 7.3).
  
  
• On an annual average basis, Shell must limit site-wide solvent losses to not more than 4 volumes per 1000 volumes of bitumen production under all operating conditions. Shell shall not discharge untreated froth treatment tailings to the tailings disposal area (Section 7.3).
  
  
• Shell shall submit a report to the EUB prior to final design or June 30, 2006, whichever is earlier, on the feasibility of producing consolidated tailings (CT) on commencement of operation in order to reduce the accumulation of thickened tailings, thin fine tails, and mature fine tails (Section 8.2).
  
  
• Shell shall describe its progress on developing solid tailings technology in every second annual report to the EUB, commencing on February 28, 2005, or such other date and frequency the EUB may stipulate (Section 8.2).
  
  
• Shell shall submit to the EUB a report summarizing the engineering design and operating plans for the CT system two years prior to planned start-up, or such other date the EUB may stipulate (Section 8.2).
  
  
• Shell shall submit to the EUB on or before February 28 of every year commencing in 2011, or such other date or frequency the EUB may stipulate, a report summarizing the performance of the tailings management system during the preceding year, including Shell's reasons for any deviations from design (Section 8.2).
  
  
• Shell shall provide a report, for EUB approval, detailing its mine plans near the Pleistocene Channel aquifer (PCA) five years prior to mining in this area to allow for the consideration of resource recovery issues and environmental impacts. The report shall include the proposed location of the pit limits and their proximity to the PCA, as well as a description of any mitigation that would be completed to minimize the impact of mining near the PCA (Section 13.1.6).
  
  
• Shell shall provide an annual report on regional development cooperation to the EUB starting in 2005. The report shall describe guiding principles and activities for cooperative development, opportunities and constraints of collaborative work among developers, specific time frames and implementation steps for all project phases to integrate them with other oil sands projects in the Muskeg River basin, and the means to evaluate outcomes (Section 18.4).

  8. What recommendations does the report make to the Government of Alberta and the Government of Canada?

The Panel recommends to Canada that

• the Department of Fisheries and Oceans (DFO) collaborate with Alberta Environment (AENV) in the establishment of instream flow needs (IFN) for the Athabasca River in the event that the Cumulative Environmental Management Association (CEMA) fails to meet its timelines (Section 9.6);
  
  
• DFO consider IFN objectives and management approaches in its approvals for the project (Section 11.8);
  
  
• DFO, in consultation with AENV, Alberta Sustainable Resource Development (ASRD), Environment Canada (EC), and regional stakeholders, require Shell to develop and implement a comprehensive monitoring program relating to fish and benthic macroinvertebrates (Section 12.5);
  
  
• DFO require a report from Shell on its monitoring results relating to the compensation lake and share those findings with other stakeholders in the region (Section 12.5);
  
  
• EC provide scientific expertise to CEMA working groups in the selection of appropriate indicators of terrestrial and aquatic ecosystems and in establishing effects-based monitoring systems for regional acid deposition (Section 16.2.9);
  
  
• DFO consider conditioning its approval to require Shell to participate in CEMA (Section 21.10); and
  
  
• Health Canada (HC), in conjunction with Alberta Health and Wellness (AHW), consider undertaking a regional baseline health study primarily dealing with First Nations, Metis, and other aboriginal groups and consider contributing expertise and funding in support of Wood Buffalo Environmental Association's (WBEA's) efforts to implement an ongoing health-monitoring program consistent with the recommendation of the Alberta Oil Sands Community Exposure and Health Effects Assessment Program (Section 24.6).

The Panel recommends to Alberta that

• in AENV's review of Shell's Water Act application, it consider water allocation based on needs of the different project phases (Section 9.6);
  
  
• AENV establish IFN for the Athabasca River in collaboration with DFO in the event that CEMA fails to meet its timelines (Section 9.6);
  
  
• AENV review the communications programs in place to ensure that regional water quality and water use information is accessible and understandable to interested parties (Section 9.6);
  
  
• AENV include a condition in the Environmental Protection and Enhancement Act (EPEA) approval requiring Shell to develop and implement monitoring programs for sediment and water quality for waters that may be affected by the project (Section 10.9);
  
  
• AENV ensure that monitoring plans are designed to ensure early detection of potential water quality changes in groundwater and surface water due to their interactions (Section 10.9);
  
  
• AENV condition any EPEA approval for the project to require monitoring of acid deposition on water bodies (Section 10.9);
  
  
• AENV consider IFN objectives and management approaches in its approvals for the project (Section 11.8);
  
  
• ASRD require Shell to also consider the widths and types of buffer zones for benefits to watershed management when evaluating wildlife corridors (Section 11.8);
  
  
• AENV require Shell to conduct or support monitoring of water levels in Kearl Lake to validate the predictions made in the environmental impact assessment (EIA) (Section 11.8);
  
  
• AENV and ASRD, in consultation with DFO and EC, require Shell to conduct follow-up studies on potential impacts of fish tainting compounds (Section 12.5);
  
  
• AENV consider requesting Shell to provide, prior to construction, additional mitigation plans to limit external tailings disposal area seepage (Section 13.1.6);
  
  
• AENV's Dam Safety Branch require Shell to include updated seepage modelling results, Quaternary deposits mapping, monitoring plans, and mitigation measures in the tailings disposal area detailed design report (Section 13.1.6);
  
  
• AENV incorporate conditions in its approval requiring Shell, in conjunction with other developers, to define and carry out a regional groundwater study of the Pleistocene Channel aquifer (PCA) in order to evaluate the regional nature of this groundwater resource (Section 13.1.6);
  
  
• AENV and ASRD require Shell to participate in a technical review of wildlife corridors that includes analysis of corridor effectiveness in facilitating wildlife movement (Section 16.1.9).
  
  
• AENV and ASRD review with Shell an action plan to maintain other islands or strips of undisturbed native vegetation on the Shell lease in association with wildlife corridors (Section 16.1.9).
  
  
• ASRD require Shell to develop a wildlife monitoring program for implementation prior to construction (Section 16.1.9);
  
  
• ASRD and AENV identify wetlands research as a priority for CEMA to address and that they consider requiring Shell to support a program to facilitate wetlands restoration (Section 16.2.9);
  
  
• AENV and ASRD consider whether additional performance criteria should be developed for progressive reclamation (Section 16.3.4);
  
  
• AENV monitor end-pit lake (EPL) development and testing by Shell and other operators (Section 16.4.4);
  
  
• AENV consider long-term environmental effects on the Muskeg River in the design of Shell's water monitoring programs (Section 17.6);
  
  
• AENV develop management plans and objectives for the Muskeg River basin if Muskeg River Watershed Integrity (MRWI) subgroup timelines are not met (Section 17.6);
  
  
• in addition to recommendations on IFN and MRWI, AENV and ASRD consider developing management plans or objectives respecting other environmental issues if CEMA timelines are not met (Section 21.10); and
  
  
• AHW, in conjunction with HC, consider undertaking a regional baseline health study primarily dealing with First Nations, Metis, and other aboriginal groups and consider contributing expertise and funding in support of WBEA's efforts to implement an ongoing health-monitoring program consistent with the recommendation of the Alberta Oil Sands Community Exposure and Health Effects Assessment Program (Section 24.6).