Coal, Climate & Cutthroat Trout: Some updates on coal in Alberta

25 Jun Coal, Climate & Cutthroat Trout: Some updates on coal in Alberta

Coal, Climate & Cutthroat Trout:
Some updates on coal in Alberta

Just over a year ago,  the Government of Alberta rescinded the longstanding A Coal Development Policy for Alberta (Coal Policy).  See  our blog on the rescission here.  This resulted in the removal of public land use categories which imposed varying degrees of restrictions on coal exploration and development in the Eastern Slopes – effectively, an early form of regional planning designed to protect an extremely valuable part of Alberta’s landscape (socially, culturally and environmentally).

Not surprisingly this decision engendered  a lot of public outcry.  In response, the Coal Policy was reinstated in February 2021 and the Coal Policy Committee was established in March 2021 “to develop and lead a widespread and comprehensive public engagement to inform Alberta’s long-term approach to coal development”.  See here for our initial comments to the Coal Policy Committee.

While the Coal Policy Committee has been working on engagement with Albertans, a lot of other things have happened recently with respect to coal.  Firstly, the Grassy Mountain Coal Project decision was released.  Secondly, there have been important statements limiting future coal development have been made by the Federal Government (see the Statement on thermal coal mining and the Minister’s Letter to Heather McPherson M.P.).

Benga Mining Limited, Grassy Mountain Coal Project  Decision

On June 17, 2021, the Joint Review Panel established by the Federal Minister of Environment and Climate Change, and the Alberta Energy Regulator (JRP) released its decision on the proposed Grassy Mountain Coal Project (Grassy Mountain Coal Project decision).

The applications made by Benga Mining were for approval to construct, operate, and reclaim a new open-pit metallurgical coal mine in the Crowsnest Pass area.  The project footprint was to cover 1521 hectares.  In addition to requiring provincial approvals for the project, both federal and provincial environmental assessments were required.  The  JRP was established to conduct a public hearing, to review the environmental assessments, and  to consider the applications for approval.

There are 2 components to this decision.  The first component is the decision made as a panel of the AER on the provincial approval applications under the Coal Conservation Act (and other pieces of provincial legislation)  to determine if the project is in the public interest.  If the AER panel determines that the project is not in the public interest, then the provincial approvals will not issue and the project cannot proceed.

The other component is the recommendations made as a review panel under the federal Canadian Environmental Assessment Act, 2012 (CEAA 2012 which is the predecessor to the current Impact Assessment Act which was in effect at the time of the initial project proposal) to consider potential effects on environmental components within federal authority such as fisheries, aquatic species at risk, and migratory birds.  The review panel under CEAA 2012 submits a report including recommendations and conclusions to the Minister of Environment and Climate Change and the final decision is made by the federal cabinet.

In this case, the JRP in its capacity as an AER panel determined that the proposed project was not in the public interest with the result that the provincial approvals will not issue and the project cannot proceed.  Subject to any appeals of the decision that might be filed, this decision is determinative (i.e. cannot be changed by the provincial or federal cabinet).   The JRP in its capacity as an AER panel found that (page xix):

…the project’s significant adverse environmental effects on surface water quality and westslope cutthroat trout and habitat outweigh the low to moderate positive economic impacts of the project.  Therefore, we find that the project is not in the public interest… Even if the positive economic impacts are as great as predicted by Benga, the character and severity of the environmental effects are such that we must reach the conclusion that approval of the Coal Conservation Act applications is not in the public interest.

The JRP in its capacity as an AER panel notes that there are significant adverse effects beyond those on surface water quality and westslope cutthroat trout but found that those effects, in and of themselves were not enough to reject the proposed project rather that “[i]t is the effects on surface water quality and westslope cutthroat trout that drive our public interest determination”.

On matters related to federal jurisdiction, the JRP in its capacity as a CEAA 2012 panel found that the project would likely result in significant adverse environmental effects on surface water quality, westslope cutthroat trout and their habitat, and whitebark pine.  Further, the JRP found that, given the potential to impact critical habitat of cutthroat trout, permits would be required to meet the Species at Risk Act and that the project would be unlikely to meet the preconditions to obtain such permits.  The JRP also found that in some instances, Benga made “overly optimistic assumptions of the effectiveness of its proposed mitigation measures” (page 626).

Statement by the Government of Canada on thermal coal mining

On June 11, 2021, the Government of Canada issued a policy  statement on thermal coal mining.  Citing Canada’s  climate change commitments under the Paris Agreement and its recognition that investments in unabated coal must stop, the federal Government stated that:

…the Government of Canada considers  that any new thermal coal mining projects, or expansions of existing thermal coal mines in Canada, are likely to  cause unacceptable environmental effects.  This decision will inform federal decision making on thermal   coal mining projects.

The federal Government indicates that this policy statement will “be an important consideration in the Minister’s or Governor in Council’s determination … as to whether the effects within the federal jurisdiction caused by proposed new thermal coal mines or expansions of existing coal are in the public interest of Canadians”.  As well, this policy statement will be used to information the use of discretionary authority to designate any proposed new or expansion of a thermal coal mine for assessment under the Impact Assessment Act (where it would not otherwise be required).  Similarly, this policy statement will inform a decision  to provide section 17 notice that a designated project will cause unacceptable environmental effects before an assessment commences (section 17 of the Impact Assessment Act grants the Minister discretion to not allow the proposed project even though an assessment has not  been done since environmental effects are already known to be unacceptable).

Although these are encouraging statements, it does not expressly prohibit new or expanded thermal coal development.  Because the concerns raised in the policy statement pertain to climate change impacts of thermal coal, it is conceivable that a proposal involving some sort of greenhouse gas mitigation plan (e.g. carbon capture and storage, or offset) would be deemed acceptable.  While the climate impacts of thermal coal are significant, that is not the only significant environmental impact associated with thermal coal development.  As such, thermal coal developments ought to always be subject to both provincial and federal assessment (and, as discussed below, that requirement should be expressed in legislation not policy).

Minister of Environment and Climate Change Letter to Heather McPherson M.P.

On June 16, 2021, the Minister responded to a petition submitted by Heather McPherson M.P.  (for Edmonton Strathcona).  The petition submitted by Heather McPherson M.P. sought regional assessment of the impacts  of all proposed coal developments in the Eastern Slopes.  At the same time, she tabled a private member’s bill to require all coal mine projects to undergo both provincial and federal assessment (currently, only projects  larger than 5,000 t/day require assessment).

In his response, the Minister declined to conduct a regional assessment on the basis that existing regulatory frameworks and policy initiative are sufficient to address environmental, health, social and economic effects of coal development activities.  The Minister states that the new policy announcement (as described above):

…makes clear that new thermal coal mining and expansion  projects are  likely to cause unacceptable environmental effects and will inform my decisions on these types of projects under the [Impact Assessment Act] going forward,  both with respect to designation of new thermal mine projects that fall below the threshold in the Physical Activities Regulations to trigger a federal assessment, and with respect to the determination of whether the project’s  effects are in the public interest.

The Minister also states that, with respect to metallurgical coal development, any new or proposed mine that is not already required to undergo assessment as per the Physical Activities Regulations and has the potential to release selenium into water bodies, it is his  intention to designate those projects for federal assessment.

While the ELC is encouraged by these statements made by the Minister, it would be preferable to incorporate these statements into legislation (policy is much more fluid and easy to change).  This could be done by amending the Impact Assessment Act to specify that minimum coal production capacity limits is not allowed in regulations designating physical activities (this is the approach taken in Heather McPherson’s private member’s bill).  Alternatively, the Physical Activities Regulations could be amended to remove thresholds thereby requiring federal assessment for all coal mines (thermal and metallurgical) regardless of size.  Given the higher barriers to amendments, it would be preferable to amend the Impact Assessment Act rather than the Physical Activities Regulations to achieve a longer term change.

What does this mean for the Alberta Coal Policy Committee?

As the Coal Policy Committee continues its work, we hope that these recent developments will be top of  mind.  There are significant environmental impacts – including , as noted in the Grassy Mountain decision, the potential for selenium contamination impacting aquatic species at risk – associated with all coal exploration and extraction activities.

The Coal Policy Committee must consider whether the “moderate positive economic” benefits of coal development is sufficient to justify the significant environmental impacts. At the least the land category restrictions under the  Coal Policy ought to remain in place under proper regional and subregional planning (with regulatory/prescriptive requirements that clearly delineate which areas are not appropriate for coal  development)  has occurred for the whole of the Eastern Slopes.

Furthermore, the Coal Policy should reflect Alberta’s responsibility to reduce the emission of greenhouse gases and to mitigate climate change impacts. That is, development of thermal coal should no longer be permitted in Alberta (given its significant climate change and other environmental  impacts).  And that any new or expanded development of metallurgical coal (in a permitted zone) will require an environmental assessment at both the provincial and federal level (i.e. a joint panel review including a public hearing).

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