Coal – Facilities
In this decision, the AER and Canadian Environmental Assessment Agency (“CEAA”) joint review panel (“JRP”) found that the Benga Mining Limited (“Benga”) Grassy Mountain Coal Project (the “Project”) is not in the public interest. It was determined that the adverse environmental effects outweigh the positive economic impacts of the project. Benga’s application was denied.
Introduction
Benga applied to the AER for approval to construct, operate and reclaim a new open-pit metallurgical coal mine in the Crowsnest Pass area. The proposed Project footprint covered 1521 hectares. The production capacity of the Project would be a maximum of 4.5 million tonnes of metallurgical coal per year over a mine life of approximately 23 years.
The Project would include surface mine pits and waste rock disposal areas, a coal-handling and processing plant with associated infrastructure, water management structures, an overland conveyor system, a rail loadout facility, and other facilities.
Benga Submissions
Benga submitted an environmental impact assessment (“EIA”) for the Project to the AER and CEAA on November 10, 2015, and submitted an updated EIA on August 15, 2016. Based on its EIA, Benga submitted that the Project was not likely to result in significant adverse effects following the implementation of mitigation measures.
JRP Findings
The JRP found that in some cases, the claimed effectiveness of the proposed measures was overly optimistic and not supported by the evidence. The JRP found that Benga did not always apply a conservative approach to the identification and assessment of project effects.
The JRP found that Benga’s reliance on future adaptive management meant that, in some cases, it did not provide important details regarding proposed mitigation measures. It further found that Benga’s proposed adaptive management approach and plans were not sufficiently developed or detailed to allow for a confident conclusion that anticipated or unanticipated project effects would be effectively mitigated through adaptive management.
The JRP found that the Project would result in low to moderate positive economic impacts on the regional economy, but that Benga did not consider some risks that could reduce the magnitude of these positive impacts.
Environmental Effects
The Project is located in a sensitive mountain environment and has the potential to adversely affect the water quality of Gold Creek and Blairmore Creek, which are within the headwaters of the Crowsnest River, Oldman River, and South Saskatchewan River. These creeks contain populations of threatened westslope cutthroat trout. The Project would release contaminants, particularly selenium, into receiving surface waters.
Benga estimated that the mitigation measures it would implement would capture 95 or 98 percent of the selenium-rich contact water coming from the waste rock dumps, which modeling showed was necessary to achieve target selenium concentrations in the effluent and receiving streams. The JRP determined that the Project as proposed would not likely capture contaminants this efficiently. The JRP determined that Benga did not adequately describe or assess alternative, additional selenium mitigation measures it would pursue if its planned saturated backfill zones were not as effective as needed.
Benga predicted slight but chronic exceedances for a number of non-selenium contaminants, despite not taking a conservative approach to modeling water quality or capturing all potential sources of metal leaching in its model. A sulphate-adjusted, site-specific water quality objective for selenium in receiving waters downstream of the Project was suggested. The JRP did not find that this objective would protect surface water quality. Further, the JRP noted that no evidence was presented to demonstrate that any jurisdiction in the world has approved a sulphate-adjusted guideline for selenium.
The JRP found it likely that the costs of the long-term monitoring and treatment necessary to protect future water quality at and downstream of the site were underestimated. Benga appeared to rely heavily on its participation in the province’s Mine Financial Security Program to respond to concerns about long-term treatment. This raised the concern that liability for long-term water quality management could be assumed by the taxpayers of Alberta.
The JRP concluded that the Project is likely to cause significant adverse environmental effects on westslope cutthroat trout and their aquatic habitat. Westslope cutthroat trout are listed as threatened under both the provincial Wildlife Act and the federal Species at Risk Act (“SARA”). The JRP determined that Benga did not adequately assess the potential impacts of the Project on fish and aquatic habitat.
Calcite was further identified as an issue and a danger to the habitat, given that there are no treatments to remove calcite from the creek once it precipitates onto substrates in a creek. Benga’s assessment of the impacts of the Project on fish and aquatic habitat identified risks to species listed as threatened under the SARA. The JRP found that little information had been provided on these matters and that the proposed mitigation, including an offsetting plan, was likely not feasible or effective.
Regarding surface water quantity and flow, the JRP found that the Project would likely have a low to moderate adverse impact on the quantity of surface water flows in Gold and Blairmore Creeks. Because of uncertainties with water quality management, the presence of a threatened aquatic species, and the lack of a comprehensive flow augmentation plan, the JRP could not confidently conclude the extent or acceptability of the effects.
It was further concluded that the Project would not likely cause significant adverse effects on ground water quantity, flow, and quality or air quality. Any adverse impacts on air quality would be localized and limited to the area immediately surrounding the mine permit boundary. It was noted that Benga did likely underestimate the potential for, and effects of, worst-case wind-driven dust emissions.
Human Health
Benga’s assessment of risk from exposure to dust in general and coal dust was limited in scope and, as a result, left uncertainty about the potential for increased health risks associated with dust. Confidence in the results of the human health risk assessment for the Project was low due to the lack of conservatism in the water quality modeling, changing risk estimates during the review process, and other limitations of the health risk assessment. Despite the uncertainties in the assessment, the JRP concluded that adverse project-related effects on human health are unlikely due to the conservative exposure assumptions used in the assessment.
Conservation, Reclamation, and Closure
Reclamation is the primary mitigation measure for many Project effects. The Project would be located in steep terrain within the highly diverse and specialized landscape of the Montane and Subalpine Natural Subregions of the Rocky Mountain Natural Region of Alberta.
While Benga submitted a proposed conservation and reclamation plan, the JRP concluded that this plan did not provide enough detail to allow for the assumption that reclamation would effectively mitigate Project effects on terrestrial resources or that the reclamation can be achieved. Particularly, the JRP was concerned by the uncertainty regarding the time it may take for the Project site to reach a stable and self-sustaining state that satisfies the requirements for reclamation certification.
The JRP was not satisfied that the proposed reclamation measures are technically feasible. It was further not satisfied that the measures would result in the restoration of various important vegetation species and communities affected or removed during the Project. The conservation and reclamation plan was also found to lack mitigation of the loss of rare plants and plant communities. The JRP also noted that uncertainties of the reclamation plan are compounded by the effects of climate change on long-term reclamation success.
Social and Economic Effects
The Project would have a moderately positive economic impact on the Crowsnest Pass area and a low impact on the remainder of Alberta and Canada. To estimate royalty revenues, Benga used a US$140/tonne long-term average price. It estimated that it would employ approximately 400 workers directly and pay approximately $990 000 and $490 000 annually in municipal taxes to the Municipal District of Ranchland No. 66 and the Municipality of Crowsnest Pass, respectively, over the life of the Project.
The JRP could not verify the magnitude of the estimated benefits as Benga did not submit methods and models to support its estimates. Additionally, the JRP was not confident that Benga’s estimate of future royalty payments of $30 million per year was accurate. Benga did not submit a detailed financial feasibility model or provide a clear explanation to support its estimates. Nor did it provide an adequate explanation of why its royalty payments would be significantly higher than those of other bituminous coal mines in the province. The JRP found that Benga’s estimated royalty payments were likely overstated. Similarly, the JRP did not have confidence in the tax estimates that Benga produced, as they came from the same model.
The JRP concluded that the Project has the potential to impose negative impacts on other economic sectors. At the same time, Benga’s assessments did not include all factors that may reduce the positive economic impacts of the Project. These missing aspects included the potential for falling demand for or price of metallurgical coal later in the life of the Project. These declines could arise from a transition away from metallurgical coal as part of efforts to reduce greenhouse gas emissions.
Generally, the Review Panel found that Benga presented an overly optimistic economic analysis that did not adequately consider all economic risks.
Effects on Indigenous Traditional use of Lands and Resources, Culture, and Rights
The proposed Project is located within Treaty 7 territory, in the headwaters of the Oldman watershed. Indigenous groups emphasized the importance of the area and the watershed as a cultural landscape and source of traditional resources and the need to protect it.
The JRP specifically evaluated distinct but interrelated issues regarding the effects of the Project on Indigenous peoples. It assessed whether the Project would cause changes to the environment that would affect: current use of lands and resources for traditional purposes; physical and cultural heritage; any structure, site, or thing that is of historical, archaeological, paleontological, or architectural significance; or health and socio-economic conditions.
The JRP noted that all Treaty 7 First Nations and the Métis Region 3 signed agreements with Benga and provided letters stating they had no objection to the Project. Regardless, the JRP’s assessment included an evaluation of the potential adverse effects the Project may have on Indigenous peoples. The JRP also considered the Project’s effects on asserted or established Aboriginal or treaty rights and information regarding any measures proposed to avoid or mitigate the potential adverse effects of the Project on asserted or established Aboriginal or treaty rights.
The JRP determined that overall the Project would result in the loss of lands used for traditional activities. Further, the Project would have a significant adverse impact on physical and cultural heritage for the Kainai, Piikani, and Siksika Nations. The mitigation measures proposed by Benga were not sufficient to mitigate the potential adverse effects of the Project.
Based on the information provided by Benga and because each Indigenous group would experience the Project and its effects differently, the JRP could not complete an assessment of the effects of the Project on the socio-economic conditions of the individual Indigenous groups.
Decision of the JRP
The JRP noted that in its review, it considered its obligations and the guides provided by the Canadian Environmental Assessment Act 2012, the Responsible Energy Development Act, the Coal Conservation Act, the Environmental Protection and Enhancement Act, and the Water Act. These Acts, the South Saskatchewan Regional Plan, and submissions and views expressed by different parties were considered in evaluating whether the Project would be in the public interest.
The JRP concluded that the negative environmental effects on westslope cutthroat trout and surface water quality outweighed the Project’s moderate positive economic impacts. As a result, the Project was not found to be in the public interest. The Review Panel repeated that the evaluations and submissions of Benga regarding the adverse environmental impacts, as well as the extent of the positive economic impacts, were optimistic. Yet, the adverse impacts on the environment were still estimated to be significant, and the positive economic impacts were only moderate in the area and low in the remainder of the country. The Project could, therefore, not be found to be in the public interest. The JRP denied the application.
