By Gavin Fitch, Q.C. and Cesar Agudelo
Introduction
On June 17, 2021, the Joint Review Panel (“JRP”) of
the Alberta Energy Regulator and the Impact Assessment Agency of Canada (“IAAC”)
rejected a proposal by Benga Mining Ltd. (“Benga”) to develop a
metallurgical coal mining project in the Crowsnest Pass region of southwestern
Alberta. The JRP concluded the Grassy Mountain Coal Project (“Project”)
would result in significant adverse environmental effects that would not be
outweighed by the Project’s modest positive economic impacts.
A close review of the Decision shows that the JRP found
that Benga put forward a highly optimistic Project that lacked a systemic
approach to dealing with the significant uncertainties it posed. As a result,
the JRP did not have confidence in Benga’s ability to mitigate the
environmental impacts.
The Decision is significant for a number of reasons, in
particular the extent to which a proponent can rely on promises to undertake
adaptive management to ameliorate uncertainties about the effectiveness of
mitigation.
The Project
The Project involved the construction, operation, and
reclamation of a new, open-pit metallurgical coal mine in the Crowsnest Pass. By
its own estimates, the Project would produce a maximum of 4.3 million tonnes of
coking coal a year. Production would occur over 23 years, followed by four
years of active reclamation and decades of passive site management to deal with
selenium in surface water.
The assessment of the Project considered a wide variety of
environmental issues, but the most prominent one was water quality. The high
risk of discharge of selenium into local watercourses (Blairmore Creek and Gold
Creek, both tributaries of Crowsnest River) and the potential impacts on the
threatened Westslope Cutthroat Trout (“WSCT”), which is protected under
the federal Species at Risk Act (“SARA”), were major issues at
the hearing.
Significant Adverse Effects
The JRP concluded that the Project would result in
significant adverse effects on surface water quality and the WSCT. The JRP also
found that there would be significant adverse effects on the Whitebark Pine
(another protected species under SARA), native vegetative species and
biodiversity.
Benga claimed it would use proven mitigation methods to
address these potential adverse effects on water. Further, in the event these
methods did not prove successful, Benga would rely on adaptive management to
deal with it.
With regard to surface water specifically, Benga placed
significant reliance on a single technology: the saturated backfill zone (“SBZ”).
A SBZ is water saturated waste rock, which is kept in a submerged state and fed
with a carbon-based feed to create a chemical reaction that is supposed to
attenuate selenium in the water. This method is currently being used in B.C. by
Teck Resources (“Teck”) at its Elk Valley mines. However, the JRP found
that it had not been demonstrated to be effective at scale (i.e., on an actual
operating mine as opposed to demonstration sites). Further, the JRP found that
although Benga stated it would have several years to adaptively manage if the
SBZ did not perform as expected and that Benga failed to provide
sufficient detail about what it would or might do, leaving the panel with little
confidence.
The Past
The hearing of the Project occurred against the backdrop
of the long history of coal mining in British Columbia’s Elk Valley. The JRP
wrote at paragraph 848, “The Elk Valley serves as a cautionary example
regarding what could occur when sources of selenium and calcite formation are
not controlled. It affirms the importance of preventing problems before they
arise, rather than relying on adaptive management after contamination problems
have taken hold.”
The precautionary principle featured prominently in the
Decision. The JRP interpreted the precautionary principle to mean that where
there are threats of serious irreversible damage, lack of full scientific
certainty shall not be used as a reason for postponing cost-effective measures
to prevent environmental degradation. The precautionary principle at the Grassy
Mountain hearing took on increased stature because the “threat of serious
irreversible damage” was so readily apparent in the Elk Valley, a short
distance from the site of the Project.
Dealing with Uncertainty and Adaptive Management
The JRP acknowledged that every project will have
uncertainties. However, the public interest consideration required the JRP to
assess the environmental effects and the mitigation methods proposed to address
those uncertainties.
In the case of the Project, the JRP found that Benga
presented optimistic goals, assumptions and measurements were not conservative;
and relied on a single, unproven mitigation technology, the SBZ. This last
point was particularly important. At paragraph 1148, the JRP wrote “The
strategy of ‘putting all one’s eggs in one basket,’ when the basket …is
unproven, does not give us confidence that significant adverse environmental
impacts can be avoided even if additional mitigation measures were later put in
place.”
Benga’s response to concerns over the reliance on the SBZ
and other uncertainties was to state that it would apply adaptive management
techniques. However, the JRP stated that “a commitment to adaptive management
does not eliminate the need to provide sufficient information on the
environmental effects of a project.”
The JRP held that proponents must provide sufficient
detail to demonstrate that project plans and proposed mitigation measures are
technically and economically feasible, and that these techniques will
effectively manage risk. Adaptive management, while not fail-safe, must have
systematic and deliberate planning and rigorous implementation. As noted at
paragraph 169, adaptive management required more than promising to implement a trial-and-error
methodology.
Economic Benefits Insufficient
Proponents can often depend on the economic benefits of
their projects to balance out any adverse effects. Not this time.
Benga prepared a Socio-economic Impact Assessment (“SEIA”),
which is standard practice particularly in oil sands projects. Several
interveners criticized this approach, arguing that a true cost-benefit analysis
(“CBA”) should have been provided. The JRP held that a SEIA, while
acceptable and important in assessing the economic impacts of a proposal,
lacked an assessment of the benefits of the Project. The JRP recommended that
the federal and provincial governments should require the use of both economic
impact assessments and cost-benefit analysis for future EIAs or federal impact
assessments to allow decision makers to make more informed decisions.
Among other things, Benga claimed that the Project would
create approximately 400 full-time jobs and generate $77 million annually in
royalties and income taxes, and hundreds of thousands annually in municipal
taxes. However, the JRP found the Benga’s estimate of its royalty and tax payments
was overstated. It concluded that the alleged economic benefits were modest and
paled in comparison to the potential costs, both economic and environmental, of
the Project.
In the result, the JRP found that even if the economic
impacts were as great as predicted, the severity and the character of the
environmental impact were such that they would have to deny the application
anyway.
Take Away
The Project was rejected by the JRP because it determined
that Benga presented an overly optimistic goal for selenium capture based on
metrics that were not conservative. The JRP found that Benga’s confidence did
not hold up to scrutiny and was not supported by the real-world experience of
the Elk Valley, which showed that without a conservative, intentional, and
well-planned approach, Alberta’s southern river basins could suffer the same
fate.
Further, the JRP found that Benga failed to present a coherent
adaptive management plan. Rather than a deliberate plan to deal with
uncertainty, the JRP concluded that Benga’s promises to adaptively manage
amounted to deferring important mitigation plans to an undefined point in the
future.
The JRP essentially denied the Project as it found that Benga placed “all its eggs in one basket” with regard to selenium management, had an ill-defined adaptive management plan, and would provide only modest economic benefits. Therefore, the JRP believed denial was consistent with the precautionary principle and in the public interest.
For further information regarding the post above or any other environmental, energy, or regulatory matter, please contact any member of our Energy, Environmental, and Regulatory Practice Group.