January 8, 2007

Joint panel approves Albian's Muskeg River oil sands project, with conditions

A joint review panel representing the Alberta Energy and Utilities Board (EUB) and the federal government has granted conditional approval for Albian Sands Energy's proposal to expand its Muskeg River oil sands mine, integrate it with the Shell Jackpine mine and construct and operate a bitumen extraction plant. This project would be located adjacent to Albian's existing oil sands mining operation 70 km north of Fort McMurray.

The panel's Decision 2006-128 places 16 conditions on Albian that relate to environmental and technical aspects of the project, including tailings and reclamation management.

It has, however, refused to approve Albian's request for a new alignment for 5.5 km of Highway 63, which would have relocated that portion of the highway within the Athabasca River Valley. Turned down as well was Albian's proposal for an additional 60-metre-wide corridor east of the highway to accommodate pipelines to the Aurora North mine and a 30-metre-wide corridor to accommodate the 240 kilovolt (kV) grid connection to Albian's plant site.

In deciding not to approve the highway re-alignment request, the joint panel said further study was needed to assess the appropriate balance between recovery of the bitumen resource that would be sterilized if the highway was not re-located and the need to protect the Athabasca River valley ecosystem from impacts that might result from re-location of the highway.

The panel was not convinced that Albian demonstrated that the relocation of the highway would maintain the Athabasca River Valley's watershed, wildlife, recreation, aesthetic, ecological, or traditional values defined and described in the Fort McMurray - Athabasca oil sands sub-regional Integrated Resource Plan. The decision report concludes that further study is needed to assess the balance between the recovery of bitumen resources and the protection of the river valley ecosystem.

The joint panel has made 13 recommendations to the federal government relating to water quantity and quality, fish habitat and the need for co-ordinated action at all levels of government to ensure that the Regional Municipality (RM) of Wood Buffalo has the ability to service the anticipated level of sustained growth in the region.

Environment Canada and Alberta Environment, it adds, should work together to assess the need for a mine fleet emissions technology review and regulation development process. The two environmental agencies should also work to require further evaluation of nitrogen oxide/nitrogen dioxide conversion technology, and should collaborate on a review of the cumulative impacts on the Yellow Rail in the oil sands region, says the decision report.

The decision report also includes 21 recommendations directed to the Alberta government which, says the panel, should: continue to work with the Northern Lights Health Region to address the lack of land, infrastructure, and resources that it is currently faced with in Fort McMurray; and should continue to work with the Wood Buffalo RM to ensure that the supply of land ready for residential development and the necessary planning are in place to meet the existing and expected housing demand, including affordable housing.

The panel further recommends that, if additional site-specific monitoring is needed, Alberta Environment include as a condition of approval a requirement that Albian develop and implement (in consultation with government departments and other stakeholders) monitoring programs for sediment and water quality and quantity for waters that may be affected by the project.

The joint panel report, EUB Decision 2006-128, may be viewed on the EUB Web site, www.eub.gov.ab.ca. A summary may also be viewed on the Canadian Environmental Assessment Agency Web site, www.ceaa-acee.gc.ca.

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