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Syncrude Canada Ltd. Mildred Lake Extension Project and Mildred Lake Tailings Management Plan (AER Decision 2019 ABAER 006)

Link to decision summarized

Tailings Management Plan – Application Approved


In this decision, the AER considered Syncrude Canada Ltd. (“Syncrude”)’s application under section 13 of the Oil Sands Conservation Act (“OSCA”) for amendments to existing Approval No. 8573 to construct, operate and reclaim the Mildred Lake Extension project (“MLX Project”).

The AER found that the approval of the MLX Project was in the public interest and therefore approved the application subject to conditions.

Background

The MLX Project was a proposed open-pit mining project consisting of two open-pit mining areas in and beside its existing Mildred Lake operations. The east mine extension (“MLX east”) would be west of the Athabasca River, and the west mine extension (“MLX west”) would be west of the MacKay River. Development at the MLX west area required construction of a bridge across the MacKay River for development and operations.

The MLX Project was designed to sustain bitumen production levels after the current Mildred Lake North Mine pit is depleted. The mineable resource is estimated at 738 million barrels of recoverable bitumen. The MLX Project would use conventional shovel and truck mining technology and would extend the duration of mining activity by about 14 years.

Development of the MLX Project area would begin toward the end of 2019. Oil sands mining would begin at MLX west in 2024, followed by MLX east in 2028.

The MLX Project would use the existing Mildred Lake upgrader, extraction facilities, mining equipment, processing plants, and tailings facilities to process the mined ore.

Mildred Lake Tailings Management Plan

The AER found that several items in the Mildred Lake tailings management plan did not meet the intent of the Tailings Management Framework (“TMF”) or Directive 085: Fluid Tailings Management for Oil Sands Mining Projects (Directive 085). To address these deficiencies, the AER required Syncrude to submit an updated tailing management plan on or before January 31, 2023. The updated tailings management plan must be aligned with the intent of the TMF and Directive 085.

The AER directed that the updated tailings management plan must ensure that fluid treatment capacity is equal to or greater than the production rate of fluid tailings. Treatment capacity equal to production capacity must be achieved by December 31, 2025, ten years after the Tailing Management Framework was issued.

Geotechnical and Dam Safety

Syncrude proposed placing the produced tailings in currently approved facilities at the Mildred Lake site. Syncrude would use the existing external tailings pond at the Mildred Lake site and proposed placing centrifuge cake deposits and creating end-pit lakes in the in-pit areas of the MLX Project area.

The AER found that Syncrude’s design approach was appropriate for the application stage. The preliminary mine design supported the mine plan by defining the limits of the mine pits, the locations of disposal areas, and the capacities of the disposal areas. The preliminary design also identified interactions and provided setback assessments for mine pits, disposal areas, plant sites, other mine infrastructure, and the environment.

The AER found that Syncrude’s plan to use existing external tailings facilities for the MLX Project did not include changing the facilities other than extending their time of active operation.

The AER found that Syncrude’s plan to construct an in-pit berm to buttress the final pit wall was acceptable. The berm would provide an in-pit storage space for overburden material with a short haul distance and provided a surface for the relocation of Highway 63.

The AER directed Syncrude to submit detailed geotechnical designs of final pit walls, external and in-pit overburden disposal areas, and reclamation material stockpiles six months before construction.

The AER further directed that Syncrude shall not begin any activities associated with dam or canal construction, major repair, decommissioning, closure, long-term cessation, or limited operation unless written authorization or approval amendment to the plan was granted by the AER.

MLX West SAGD Setback Assessment

The AER noted that Syncrude did not provide any monitoring data for pore pressure measurement or geomechanical modelling assessments to justify the adequacy of the buffer zone between Suncor’s SAGD operation and Syncrude’s MLX West Mine area. Syncrude did not provide an assessment of any impact of mine pit opening and overburden construction on the SAGD operation.

The AER found that if an excess pore pressure was present as a result of SAGD operation in the buffer zone, the construction of the overburden disposal area and reclamation material stockpile at MLX west would add to the pore pressure in the buffer zone. The AER found that for this reason, a geological-geomechanical characterization of the buffer zone supported by monitoring data and numerical modelling was necessary.

The AER directed Syncrude to provide a SAGD-mining impact assessment for the MLX west pit. The assessment needed to be supported by actual performance or monitoring data from an existing SAGD operation and by an additional monitoring program in the buffer zone before mine operation start-up. Depending on the results of the assessments, more monitoring might be required during mine operation as the mine pit is developed and overburden storage areas are being built.

Air Quality

As part of its Environmental Impact Assessment, Syncrude was required to assess the impact of air emissions, including the components of the project that would contribute emissions and potentially affect air quality.

The AER noted that the mine fleet was a major source of air emissions as a result of combustion of diesel fuel. As the North Mine pit was depleted, Syncrude would transition the mine fleet to the MLX west mine pit starting in 2023 and to MLX east in 2027.

It was the AER’s opinion that the project would extend NOx, SO2, and PM2.5 emissions for an additional 14 years. These were emissions that would not exist in the absence of MLX Project. The effects of NOx and SO2, in particular, would be cumulative and would contribute to 14 years of additional input to nitrogen and acid deposition in the local and regional ecosystem. The AER found that NOx emission levels in particular needed to be managed to ensure meeting the Canadian Ambient Air Quality Standards and compliance of with Alberta air quality objectives and critical and target loads.

The AER required Syncrude to achieve the outcome of 12.7 tonnes per day of total mine fleet NOx emissions, as applied for, and included a NOx emission limit as a condition of approval, to be met by 2030, the operating year on which Syncrude based its air assessment scenarios.

The AER also required Syncrude to participate in and implement any management actions required by Alberta with respect to triggers and thresholds for acid deposition established under the Alberta Land Use Framework, Lower Athabasca Regional Plan (“LARP”), Air Quality Management Framework. The AER indicated that Syncrude may also be required to develop and implement actions to achieve forthcoming standards established under the Canadian Ambient Air Quality Standards.

The AER found that proactive management of dust emissions at MLX was required to mitigate health and safety risks. The Panel required Syncrude to develop and implement a dust management and mitigation plan.

Greenhouse Gas Emissions

A greenhouse gas management plan was a requirement of Draft Directive 023: Oil Sands Project Applications and was part of Syncrude’s OSCA application.

Despite some uncertainty, the AER found that the MLX Project would result in a relatively small contribution to cumulative greenhouse gas emissions from the Alberta oil sands. The AER found that, considering that Syncrude North Mine pit greenhouse gas emissions would be discontinued, the MLX Project greenhouse gas emissions would likely be a relatively small increase to Alberta greenhouse gas emissions. The AER found that Alberta’s Carbon Competitiveness Incentive Regulation (“CCIR”) and Oil Sands Emissions Limit Act were the appropriate tools to manage and mitigate the MLX Project greenhouse gas emissions.

MLX West End-Pit Lake

Suncor proposed that, at the end of mining life, an end-pit lake would be formed within MLX west (“MLX west end-pit lake”). Tailings would not be placed into the MLX west end-pit lake, but seepage from centrifuge cake placement would no longer be diverted to the closed-circuit recycle water system at closure and would instead be expected to seep into MLX west end-pit lake.

The AER found Syncrude’s water quality model developed for the MLX west end-pit lake was simplistic and relied on a number of unconfirmed assumptions given the lack of site-specific data. Therefore, the AER required Syncrude to regularly update its water quality models for the MLX Project, including for MLX west end-pit lake water quality as site-specific data becomes available and as more complex processes are better understood and accounted for in the models.

Effects in Fisheries and Fish Habitat

The AER found that impacts on fish and fish habitat associated with the MacKay River watershed could be appropriately mitigated by the Owl River offset, the proposal to use the drainage channel, and by the AER’s recommendation that Syncrude work with the Department of Fisheries and Oceans (“DFO”) and Athabasca Chipewyan to create an additional offset enhancement in the MacKay River watershed.

Reclamation

On the issue of reclamation as mitigation for impacts of the MLX Project, the AER found there were uncertainties about whether the reclaimed landscape could achieve an equivalent level of biodiversity, what species it would support after reclamation, and the time frame over which this could be accomplished. The AER found that the timeline for reclamation, knowledge gaps around the effectiveness of reclamation to support diverse wildlife habitat, and lack of information about the final reclamation and closure plan, combined to present serious challenges to Syncrude’s goal of using reclamation as mitigation for land and wildlife disturbance.

There was uncertainty about whether Syncrude’s reclamation and closure activities would create a viable ecosystem capable of sustaining wildlife. There was a high degree of uncertainty about the potential for the closure landscape to support caribou, given the nature of the habitat they require. There was potential for the closure landscape to support moose habitat, but to what extent was unknown.

The AER found that the biggest and most significant impact on wildlife and wildlife habitat was the temporal nature of the project; the MLX site would not be certified as reclaimed until 2130. This represented a 100-year period where the land was not available for wildlife use or wildlife habitat. Based on the evidence presented, it was clear to the AER that impacts would happen quickly whereas reclamation would occur very slowly.

Noise

The AER accepted that the noise effects of the MLX Project in the region were expected to be moderate to low.

The AER found that the noise impact assessment provided by Syncrude was acceptable and that the MLX Project was expected to meet the requirement of Directive 038: Noise Control (“Directive 038”). The modelling results indicated that the cumulative sound levels would be higher than the permissible sound levels at receptor 4 at year 2029 and receptor 5 at years 2023 and 2029. Potential exceedances at receptor 5 were due to the noise exceedances attributed to the Suncor Base Mine operations, which was not related to activities at the MLX Project.

The AER required Syncrude to conduct an acoustical survey for the MLX east mine operations. If the acoustical study report shows noise levels that do not meet Directive 038 criteria, Syncrude would be required implement a noise mitigation plan and conduct a follow-up acoustical survey within six months.

Reclamation and Closure Plan

The AER found Syncrude’s reclamation and closure plan met the requirements and reclamation outcomes outlined in Alberta’s approved LARP.

The AER noted that there would also be some level of uncertainty with a long-term reclamation planning that would span over multiple decades. These uncertainties included the type of habitat that would form at closure. Despite these uncertainties, the AER determined that Syncrude’s proposed reclamation methods were consistent with existing policy direction and met reclamation standards and guidelines.

The AER found Syncrude’s commitment to the reclamation engagement focus group and ongoing collaboration with Indigenous groups related to reclamation and closure planning to be an acceptable approach.

Terrain and Soils

The AER noted that the MLX Project construction would alter topography, site elevation, and drainage patterns within the MLX Project footprint. Syncrude said most of the soil from the development area would be salvaged and stockpiled for use during reclamation.

The AER found that the reclamation material balances for MLX west and MLX east showed that enough material was available to meet placement requirements.

As a condition of approval, the AER required Syncrude to cap coke and centrifuge cake before placing cover soil and subsoil. This condition was to protect the rooting zone and did not consider other objectives of placing capping material on tailings deposits, such as geotechnical stability and settlement, management and control of water treated tailings, and drainage.

Socioeconomic Effects

Overall, the AER found that the project would have a positive economic effect on the regional, provincial, and Canadian economy with respect to gross domestic product, labour income, employment, taxes, and royalties. The effect would be moderate in magnitude and long-term in duration and would contribute to the overall economic sustainability of the region and province.

The AER found that the approach used by Syncrude to estimate the carbon cost for the MLX Project was sound and consistent with current regulatory requirements for carbon pricing. The $864 million cost estimate was based on Alberta’s Carbon Competitiveness Incentive Regulation, which currently uses a price of $30 per tonne, increasing to $50 per tonne by 2024. Syncrude used a number of conservative assumptions in developing its carbon-price estimate, including forecasting its emissions based on peak levels of existing mining and upgrading operations, which would be replaced by the MLX Project as current production diminished at the North Mine, and by assuming that there would be no technological improvements or lower emission intensities over the life of the project.

Treaty Rights, Traditional Land Use Activities, and Culture

The AER found that the MLX Project would impact the ability of Athabasca Chipewyan land users to continue to hunt in the area of MLX west and along the MacKay River corridor adjacent to MLX west.

The AER recognized that the Athabasca River corridor held traditional and cultural significance for Athabasca Chipewyan; however, the evidence that the corridor in proximity to MLX east was used for hunting was weak. The AER noted that one elder said he avoided the area because he perceives it is already contaminated. The AER also noted that Athabasca Chipewyan’s experts said that moose tend to avoid areas within 300 m of mines, and that traditional users prefer to hunt away from industrial activity.

The AER acknowledged that hunting occurs in the MLX west area and that Athabasca Chipewyan members hunt moose and beaver from the MacKay River and along the corridor. The AER found that moose would be displaced at MLX west, thus impacting their distribution and accessibility to Athabasca Chipewyan. The AER acknowledged that loss of habitat and displacement would cause some interruption to Athabasca Chipewyan’s traditional hunting activity in the area.

Decision – MLX Project Approval

The AER explained that, to determine whether the MLX Project was in the public interest, as required under OSCA, it considered all the submissions, evidence, and relevant legislation, Syncrude’s proposed mitigations and commitments, as well as the conditions imposed by AER. The AER weighed impacts on Athabasca Chipewyan’s treaty rights and traditional use activities, the social and economic impacts of the MLX Project, and the impacts on the environment.

The AER found that approval of the MLX Project was in the public interest based on the following:

(a) the economic and employment benefits of the project in terms of their contribution to the regional and provincial economy and to the local and provincial tax base were considerable;

(b) the adverse impacts on Athabasca Chipewyan, in particular on their ability to continue to conduct traditional activities could be adequately mitigated through standard approval conditions and conditions imposed by the AER; and

(c) the potential impacts on Athabasca Chipewyan were not enough to outweigh the economic benefits from the MLX Project.

The AER further found that:

(a) the MLX Project was consistent with the LARP objective of optimizing Alberta’s oil sands resources and ensuring First Nations’ ability to continue to carry out traditional activities within reasonable proximity to population centres;

(b) where the MLX Project contributed to regional cumulative impacts, the conditions imposed by the AER were sufficient to mitigate these impacts; and

(c) Syncrude’s OSCA application was consistent with the purposes of the OSCA including but not limited to ensuring the orderly, efficient, and economic development in the public interest of the oil sands resources of Alberta.

As a result, the AER approved OSCA Application No. 1820856 for the MLX Project, subject to the conditions.

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