Federal scientists still wary of Shell's Jackpine oilsands expansion

Regulatory documents indicate federal scientists still have significant concerns over Shell's proposed Jackpine oilsands mine expansion north of Fort McMurray, Alta., even as the project heads into public hearings.

Five years after Shell Canada first proposed the 100,000-barrel-a-day project, it has been finally scheduled to go before a joint federal-provincial environmental hearing Oct. 29.

In their final submissions to the Canadian Environmental Assessment Agency, several federal departments say they still have questions about Shell's plans. They include how growth in the industry has outpaced the company's assessment of cumulative effects, how changing flow in the Athabasca River will affect contaminant levels and how well Shell is able to control effluent from artificial lakes that will be used to store tailings.

"Several matters will require further discussion to fully understand potential project effects and ensure suitable mitigation can be implemented," says an Aug. 2 letter from Environment Canada.

Shell's Aug. 13 response acknowledges the concerns.

"Shell is fully prepared to respond to any questions identified by the interveners at the hearing," says a letter signed by Donald Crowe, the company's regulatory manager.

Crowe points out the company has already filed 18,000 pages of evidence — "unprecedented in scope and detail."

Production to increase to 300,000 barrels/day

The expansion of the Jackpine facilities about 70 kilometres north of Fort McMurray on the east side of the Athabasca River would bring Shell's total production at the site to about 300,000 barrels a day. The plan is to mine new areas and construct processing facilities, utilities and infrastructure.

The oilsands industry in northern Alberta has mushroomed since the expansion was first proposed and now includes 11 new projects that have either been publicly announced or are before regulators. It's a growing industrial load that is of increasing concern to scientists at Environment Canada and Fisheries and Oceans Canada.

Shell has failed to look at the overall picture of how total development has already affected wildlife habitat, let alone the impacts of further expansions, says Environment Canada.

Its document goes on to say that where those impacts are measured, Shell's assessment minimizes them. For example, Shell says the amount of high-quality caribou habitat destroyed is of "low magnitude," even though the company acknowledges the loss amounts to about 40 per cent of the animal's habitat.

"It is unclear how Shell Canada defines a 40 per cent loss ... as a low-magnitude effect," Environment Canada says.

Tailings ponds a concern

The same department expressed concern about Shell's plans to store tailings for decades in artificial lakes capped with clean water.

Shell's tests didn't examine what might happen as various chemicals come in contact with one another. As well, the tests were based on short-term exposures.

"[Environment Canada] remains concerned with Shell Canada's ability to predict and control effluent quality from the end pit lakes."

Fisheries and Oceans also expressed worries.

"Uncertainty remains as to how the proposed no-net-loss plans will compensate for indirect and cumulative impacts to the fisheries resource and whether surrounding habitats will be as productive as before," the department writes.

"The potential for cumulative environmental effects on the Athabasca River remain uncertain."

Environment Canada is also concerned that Shell hasn't taken into account the probable effects of climate change on the Athabasca. It says Shell's predictions of likely changes to precipitation in the area are only one-half to one-third the most commonly accepted predictions — an underestimate that could have large effects on contaminant levels in the river.

Shell frustrated with regulatory process

Other documents released under access-to-information legislation detail Shell's frustration with the regulatory process.

Last December, Crowe wrote officials at the assessment agency and objected to a ruling forcing Shell to update its environmental work to include activity that began since 2007.

"This update represents a significant amount of work and unfairly penalizes proponents for regulatory delays, which, unfortunately, will induce further delays."

Crowe wrote that requiring Shell to consider the cumulative effects of development since Day 1 "is not consistent with legal precedent."

He also wrote Shell was being asked to consider the impacts of future developments that are still being planned.

"There is insufficient information about those activities to adequately assess their likely environmental effects."

Those kinds of broader assessments should be done by governmental or regulatory agencies, not by industry, Crowe suggested.

Shell Canada president Lorraine Mitchelmore expressed similar concerns to federal Environment Minister Peter Kent in a letter written Jan. 7, 2011.

"The length of time required for regulatory review and the lack of certainty on regulatory schedule has had a marked impact on our business development," she wrote.

"We hope that you will revisit ways to improve the process so that development proceeds efficiently under a thorough environmental review."

The Harper government is planning to streamline environmental assessments to speed major resource projects. Contained in the budget passed last June is a package that will eventually see Ottawa pay far less attention to small projects, impose time limits on major environmental hearings and pull out of the process altogether if a province is ready to step in with similar standards.

Environmentalists says Ottawa is giving up stewardship of the environment to promote energy and mining projects at all costs.