August 13, 2007

EUB grants conditional approval for oil sands upgrader project

The Alberta Energy and Utilities Board (EUB) has granted North West Upgrading approval to construct, operate and reclaim a 150,000-barrel-per-day oil sands bitumen upgrader in Sturgeon County, about 45 kilometres northeast of Edmonton.

The approval for the project is subject to three specific conditions: North West Upgrading must achieve a sulfur recovery rate of 99.5% on a calendar quarterly basis; it must do so beginning six months after start-up of the first phase of the project; and the company must submit a revised noise impact assessment for review and approval by March 3, 2008.

In its decision report 2007-058, the EUB addresses matters relating to the upgrader proposal, including the need for the project, socioeconomic effects, site selection, setbacks, emergency response planning, air quality, health, water, technology and noise. The Board is satisfied that North West Upgrading has met the requirements under the Environmental Protection and Enhancement Act in its environmental impact assessment.

In addition to meeting EUB requirements, the company has made 65 commitments relating to water and air quality, emergency planning, noise, sulfur storage, traffic, liability insurance, public consultation and visual impacts.

The project would be developed in three phases, each processing 77,000 barrels per day of bitumen blend containing 50,000 barrels of crude bitumen and producing synthetic crude oil, diluent, and other light hydrocarbon products.

In its decision, the EUB notes that having the necessary infrastructure in place to accommodate growth will minimize the impacts of development on the region, further enhance the region's attractiveness as a place for industry and workers to locate and allow it to continue to attract and sustain industrial investment. The Board says it does not believe, however, that it has the mandate to direct that a regional management plan be developed. In its view, this responsibility rests with the appropriate government bodies. At the same time, the EUB observes that efforts to co-ordinate development are already being made by organizations such as the Alberta Industrial Heartland Association and the Alberta Capital Regional Alliance.

The project was the subject of a public hearing held in Redwater, Alberta, from May 1-10, 2007. The decision report may be viewed on the EUB Web site, www.eub.ca.

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