July 23, 2007

EA panel reports released, accepted for two Quebec LNG terminal proposals

A joint review panel on the Rabaska liquefied natural gas (LNG) terminal and related infrastructure project has made 34 recommendations regarding the project. These are contained in a report on its investigation and public hearings held on the Rabaska project between December 2006 and the end of May 2007.

The joint panel included chairman Qussaî Samak, who along with Jean Paré made up the Bureau d'audiences publiques sur l'environnement (BAPE) panel. The third joint panel member was Jean-Philippe Waaub. The joint review panel and the BAPE carried out their work simultaneously, leading to a single report from the two.

Their report, together with an environmental review prepared by Quebec's department of Sustainable Development, Environment and Parks, will provide a basis for recommendations to the Quebec Cabinet by Minister Line Beauchamp. The Cabinet, which is responsible for the final decision on the project, could authorize it (with or without changes and under conditions to be determined by the Minister) or refuse it.

The project is also subject to a co-operative environmental assessment (EA) in accordance with the Canada-Quebec Agreement on Environmental Assessment Co-operation. Consequently, there may be co-ordinated decisions and announcements by the two governments.

The joint review/BAPE panel considered a full range of the project's aspects, including its risks, economic benefits, social acceptability, impacts on the natural and human environment, and proposals for environmental monitoring and follow-up.

Its report concludes that the project aligns with Quebec's energy strategy and can be expected to benefit the province in terms of energy supply and price. The region encompassing Lévis, Beaumont and l'île d'Orléans will also benefit economically from various spin-offs.

The panel further concluded that in terms of emergency measures planning, the risk assessment carried out for the project conforms with accepted practices in the field; accordingly, the risks associated with the project are deemed acceptable. It recommends, however, that if the project proceeds, yearly public reporting on its operational security should be done for the benefit of those who could be affected by accidents involving the project's facilities.

Integration into the local area has emerged as a significant issue, and the joint panel concluded that the port and on-shore facilities would substantially alter the quality of the Beaumont shore landscape. Therefore, if the project is authorized, the report recommends that measures be taken to ensure the best possible integration of the port and on-shore facilities into the landscape of the development area.

Other recommendations aimed at mitigating the project's environmental impacts call for the proponent (a consortium made up of Gaz Métro, Gaz de France and Enbridge) to: take necessary steps to ensure that sulfur dioxide emissions from the project meet Quebec standards (including the use of low-sulfur diesel fuel); ensure proper follow-up (subject to an agreement with the Ministry of Sustainable Development, Environment and Parks) to assess levels of air pollutants over and above ambient levels in the area planned for the project; prepare a compensation plan for deforested areas in the terminal area and in areas of similar value; ensure that, if the project proceeds, the vaporizer discharge temperature is reduced, to minimize impacts on fish habitat; and conduct a water well inventory and groundwater characterization before beginning construction.

The full report may be viewed on the BAPE Web site, www.bape.gouv.qc.ca, or may be requested by e-mail, communication@bape.gouv.qc.ca, or telephone (toll free) 1-800-463-4732. The report and appendices are also available on the Canadian Environmental Assessment Registry, www.ceaa-acee.gc.ca, reference number 04-07-3971.

Another joint review EA panel report, this one relating to a proposal to establish an LNG terminal at Gros-Cacounca, Quebec, has received a favourable response from the federal government, based on findings in the panel's report. This paves the way for the developer (Cacouna Energy, a company made up of TransCanada Pipelines and Petro-Canada) to pursue its efforts toward construction of the Cacouna Energy LNG terminal project. The project involves importing liquefied natural gas by sea and reconverting it to natural gas.

As responsible authorities under the Canadian Environmental Assessment Act, Transport Canada and Fisheries and Oceans Canada will ensure that Cacouna Energy carries out all mitigation measures set out in the report, as well as the required monitoring and review programs. The federal government believes that implementation of the mitigation measures and appropriate reviews to be instituted by the developer will allow the environmental impacts outlined in the report to be taken into account.

Its acceptance of the basic recommendations of the joint review panel's report allows the responsible federal authorities to proceed with the issuing of permits required under the Navigable Waters Protection Act and the Fisheries Act and eventually proceed with the signing of a lease. In this regard, Transport Canada and Fisheries and Oceans Canada will maintain close ties with the authorities involved in the project, throughout the process of issuing the required permits and other legal authorizations.

In other energy project environmental assessment (EA) activities, federal Environment Minister John Baird recently concluded that the comprehensive study process currently underway is the most appropriate type of EA for the proposed crude oil refinery project in Southern Head, Newfoundland and Labrador. Consequently, the responsible federal authorities, Transport Canada and Fisheries and Oceans Canada, will continue their respective comprehensive studies and submit a single final report to the Minister.

A preliminary report on which Baird's conclusion was based outlines each department's scope for the proposed project, the factors to be considered in the EA, public concerns submitted to authorities, the potential of the project to cause adverse environmental effects and the ability of the comprehensive studies to address issues relating to the project.

The project proponent, Newfoundland and Labrador Refining Corporation, is seeking to construct and operate a 300,000-barrel-per-day (bbl/d) refinery that could later be expanded to 600,000 bbl/d. The planned location for the refinery is Southern Head, between North Harbour and Come-by-Chance Harbour, at the head of Placentia Bay, Newfoundland and Labrador.

The refinery infrastructure will include the process facilities, marine facilities, storage tanks, access road, transmission lines, pipelines, water treatment facility, desalination plant and utilities. The refinery will process imported medium and heavy, high-sulfur crude oils into exportable fuel products, primarily gasoline, kerosene/jet fuel and ultra-low-sulfur diesel. Marketable byproducts would include liquefied petroleum gas (LPG-C3/C4), sulfur and petroleum coke. The proposal also provides for eventual decommissioning of the facility.

The participation of federal departments will be co-ordinated by the Canadian Environmental Assessment Agency.

Baird has also referred the Bruce Power New Build project to an independent review panel for an environmental assessment. His decision was based on a recommendation made by the Canadian Nuclear Safety Commission.

The project, proposed by Bruce Power, involves site preparation and the construction and operation of up to four new nuclear reactors at the Bruce Power nuclear site on the eastern shore of Lake Huron, north of Kincardine, Ontario. The project is expected to generate approximately 4,000 additional megawatts (MW) of electrical power at the Bruce site.

More information on this project is available on the Canadian Environmental Assessment Registry, reference number 07-05-25738, or from Steve Chapman, panel manager, 613/957-0294, E-mail Steve.Chapman@ceaa-acee.gc.ca.

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