Opinion: Canada won’t perform an environmental review of most new oilsands projects. Here’s why.

The Narwhal
By The Narwhal
December 19th, 2018

The future of development in Alberta’s oilsands lies in underground, steam-assisted operations that represent some of the country’s fastest growing greenhouse gas emissions. These projects have never been subject to federal environmental reviews and that’s not expected to change with Ottawa’s new-and-improved assessment rules.

By James Wilt from The Narwhal

When it comes to the oilsands, there’s a particular gloss that accompanies industry’s presentation of in-situ extraction.

Unlike the pronounced nature of open-pit mines, with the accompanying heavy haulers and seemingly endless horizons of tailings ponds, in-situ — meaning in ground or in place — operations have a much less visible footprint.

Cenovus has gone so far as to dub these operations — which require the injection of steam underground to heat viscous oil, allowing it to be pumped to surface — “a different oil sands.”

While they certainly do represent the future of the oilsands — in-situ projects have already outpaced mining production and are set to increase by one million barrels per day by 2030 — they also come with their own set of problems.

In-situ oilsands operations are incredibly greenhouse gas-intensive — requiring copious quantities of natural gas, often obtained from fracking, to produce the steam that’s injected underground.

Operations require extensive roads and seismic lines that expose threatened caribou to an increased risk from wolves and create habitat disturbances that are connected to low reproduction and calf survival rates. These compounding impacts to caribou are part of the underlying justification of the province’s controversial wolf cull.

And the proposed use of solvents as a substitute for steam has given new rise to long-held concerns about groundwater contamination from steam-injection processes.

The cumulative impacts of in-situ operations are extensive, which is why many onlookers are scratching their heads as Ottawa allows for their exemption under new environmental assessment laws — leaving reviews entirely in the hands of the province.

“To have the country’s main environmental assessment law leave the highest-carbon projects off the list is just unacceptable to us,” Patrick DeRochie, climate and energy program manager at Environmental Defence, told The Narwhal.

“The notion that provinces are able to step in and do this is not true. It doesn’t hold water.”

New legislation keeps Harper’s project list

As The Narwhal reported in April, Canada’s proposed environmental assessment rules — designed to restore public trust in the federal process for reviewing major projects — were released without any details on what kinds of projects would trigger review under the new legislation.

Back in 2012, the Harper government radically overhauled the country’s environmental assessment processes and introduced the use of a “project list” to determine whether a project — like a dam, power plant or oilsands mine — would be subject to a federal review.

Unlike the previous regime, which relied on automatic “triggers,” the project list dramatically narrowed the activities eligible for federal assessment and accorded a great deal of discretionary power to the federal environment minister.

Thousands of projects per year were no longer reviewed by Ottawa.

Outcry ensued.

The current federal government’s solution, Bill C-69, a new and controversial impact assessment bill currently under debate in the Senate, will overhaul the 2012 legislation — but keep the project list intact.

The contents of that list remain undisclosed to the public. But from the get-go Environment Minister Catherine McKenna indicatedin-situ oilsands projects would be exempt from the list.

In a statement e-mailed to The Narwhal, a spokesperson for the Canadian Environmental Assessment Agency confirmed this is still the case: “At this time, the approach to draft regulations to support the Impact Assessment Act remains unchanged.”

Last week, the federal environment ministry confirmed to The Globe and Mail that in-situ projects “fall within the exemption eligibility.”

Anna Johnston, staff lawyer at West Coast Environmental Law, said that the case for not returning to the previous approach of “triggers” in Bill C-69 was premised on the expansion of Harper’s project list.

The exemption of in-situ operations seriously undermines that expectation, Johnston said, adding many of the impacts of these operations, including those affecting Indigenous rights, fall under federal jurisdiction.

According to Johnston, Ottawa can and should assess factors like health and safety of nearby communities and workers, the potential use of solvents and impacts on species from habitat fragmentation.

Many in-situ projects occur within the critical habitat of boreal caribou, she said, and the federal government has made it “very clear” that Alberta isn’t doing a sufficient job to protect habitat.

“Why would it then entrust the provincial government to assess in-situ for its effects on boreal caribou when Alberta has demonstrated it hasn’t been doing that job adequately?” she asked.

In-situ emissions 43 per cent higher than mining

According to a recent analysis by the Pembina Institute, in-situ extraction produced an average of 43 per cent more emissions per barrel than mining in 2016. That’s a serious concern for climate policy analysts given that all new oilsands production after roughly 2022 will come from in-situ projects.

Ambitious claims are frequently made by industry and government that per-barrel emissions will soon plummet with the implementation of new technologies.

But Pembina analyst Jan Gorski told The Narwhal that most emissions reductions have occurred in upgrading, not extraction, with little signs of improvement in mining or in-situ extraction.

Furthermore, the most promising technologies are still in early stages and will only apply to new projects, not expansions (which is where production is set to grow).

“The greater question is that it hasn’t yet been shown how oilsands emissions, even as they are today, would be compatible with our emissions targets,” Gorski said.

“You take into account that there’s going to be more growth and it just makes the problem worse.”

Recent studies have also questioned current estimates of methane leakage from extraction of natural gas, used heavily by in-situ producers. A journal article in Elementa from earlier this year indicated that emissions from operations near Red Deer may be 15 times higher than reported.

Alberta won’t introduce emissions cap regulations before election

Complicating matters, the federal government has justified exemption of in-situ extraction from the project list because of Alberta’s 100-megatonne oilsands emissions cap.

But recently Alberta announced that, despite the fact the cap was legislated in 2016, it will delay the implementation of final regulations for the cap until after the next provincial election.

This puts the future of the cap itself in a precarious position, given the potential for a United Conservative Party victory in 2019.

The United Conservative Party is a loud and vocal opponent of both the 100-megatonne emissions cap and the idea of capitulating to the federal government’s national carbon levy.

Party leader Jason Kenney vowed to scrap Alberta’s carbon levy and fight Ottawa’s pan-Canadian climate framework, including requirements for a carbon tax. Kenney’s stance could end up pitting Alberta against the federal government, much like the current battle taking place between Saskatchewan and Ottawa.

At the heart of these federation feuds is the question of whether or not greenhouse gas emissions fall under the authority of the federal government or the provinces, said Stephen Hazell, former director of legislative and regulatory affairs at the Canadian Environmental Assessment Agency.

The Saskatchewan Court of Appeal will soon rule on the constitutionality of the federal government’s plan to impose a carbon tax on the province, he said.

Hazell, now director of conservation with Nature Canada, said that should the matter rise to the level of the Supreme Court of Canada, he has no doubt that a requirement to assess projects on their carbon emissions would be upheld.

“I reject the idea that greenhouse gas emissions are not a matter of federal interest and authority,” he said.

Hazell said in-situ operations fit neatly within the category of major projects likely to have significant adverse environmental impacts — a trigger under former environmental assessment rules.

“Given that climate change could destroy human civilization, maybe it might be a good idea to include high-carbon projects for assessment under the new legislation,” he said.

DeRouchie of Environment Defence said that Canada has made a promise to the international community to limit greenhouse gas emissions.

“The federal government has responsibility for the entire country to meet its climate targets,” DeRouchie said.

“We’ve seen provinces failing in the past, and continuing to put in place plans that will fail in the future. There’s actually a requirement for the federal government to meet those national commitments, and that means bringing the provinces along.”

Oilsands emissions are expected to hit 115 megatonnes of annual emissions by 2030, consuming 22 per cent of Canada’s carbon budget under the Paris Agreement.

The Pembina Institute has calculated that if all currently approved oilsands projects are built, they will add up to 131 megatonnes per year.

New environmental assessment rules allow for multi-jurisdiction collaboration

Were in-situ projects to be included under federal environmental assessment rules, it would be a first, Martin Olszynski, associate professor of law at the University of Calgary and expert in environmental assessments, told The Narwhal.

In-situ operations have never been captured by the federal environment assessment regime and it would be a significant change to include such projects in the process, he said, adding he would be surprised to see such a move given the high tension between Alberta and Ottawa.

Olszynski said, however, that in-situ oilsands extraction should be subjected to rigorous environmental assessment processes, especially if conducted at the provincial level.

“Alberta claims that it has those,” he said in an interview.

“My own sense, based on my own research, is there are a lot of things that aren’t being done very well. We are reasonably decent at documenting impacts but it’d be hard to imagine that the assessment process really changes the outcome or the way we approach these projects.”

Some have pointed to a collaborative solution. The new federal impact assessment framework is designed for collaborations between different levels of government.

Johnston said that if the federal government joins in existing provincial assessments, it could ensure oversight while maintaining the practice of “one project, one review.”

The new legislation also allows for integration of Indigenous environmental assessment processes.

According to Johnston, exemptions undermine a strong feature of the new rules: allowing for substitutions. The new legislation provides for the option of substituting a provincial assessment for a federal one, when and where it makes sense to do so.

“If Alberta believes that its processes are that good, then it can just rely on these substitution provisions,” she said. Johnston added a benefit of having a substitution provision as opposed to an exemption is that the federal government retains decision-making authority when it comes to how an assessment will be conducted and by what agency.

Olszynski said there’s also a fair bit of malleability with the future of the project list.

Because it’s a cabinet regulation, with the legislation offering no clear criteria about what can go on or off the list, a new government can add or subtract from the list — or even scrap it entirely — with very little effort. That could be very good or very bad, depending on one’s perspective of whoever forms the next government, he said.

Johnston said that while the bill may go to committee as early as next week, actual considerations won’t commence in any way until February — meaning there’s still time for people to voice their concerns about the exemption of in-situ. (You can find your MP’s contact information on this website)

She emphasized that much of the criticism about Bill C-69 is missing the mark and undermining the potential for improvements.

“If everybody could just step back and take a deep breath and think a little bit more realistically about this bill, then maybe they’d recognize that impact assessment has a really key role to play in ensuring responsible development — and it’d actually be beneficial to have more projects subject to it because it’s almost never used to stop projects but to design projects more responsibly,” she said.

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