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Regulators have approved a giant expansion of an oil sands project proposed by Royal Dutch Shell PLC – but included an unprecedented list of warnings about the negative impacts on the environment and on Aboriginal communities.
While finding the 100,000-barrel a day expansion of Shell’s Jackpine mine is in the public interest based on economic benefits, the panel, representing the Alberta Energy Regulator and the Canadian Environmental Assessment Agency, dedicated large parts of its 405-page ruling to the cumulative environmental costs, some of them irreversible.
The takeaway: With the oil sands industry under growing public scrutiny, the regulators are signalling they are not willing to take responsibility for broader societal choices and want governments to step up and take the heat for them.
“Politicians have used regulators to insulate them from the political aspects of ongoing development, and it would appear that this ruling is saying: ‘This is going to be a political decision and we need direction’,” said David Yager, national leader, oil field services, at MNP LLP, in Calgary.
The ruling could be a harbinger for another two controversial regulatory decisions involving the oil sands: the Northern Gateway oil sands pipeline from Alberta to the West Coast, and Athabasca Oil Corp.’s Dover project, which is being contested by the Fort McKay band.
Many of the issues are similar — whether the environmental risks are worth the economic benefits and whether First Nations are being heard and accommodated.
In the Jackpine expansion ruling, the panel said many of the concerns and issues raised during the review were not specific to the expansion, but had to do with the pace of development of mineable oil sands and the capacity of the regional environment to absorb them.
They asked the province and the federal government to consider 88 recommendations to improve oversight and address the overall impacts.
“The panel concludes that the project, in combination with other existing, approved, and planned projects, would likely have significant adverse cumulative environmental effects on wetlands; traditional plant potential areas, old-growth forests, wetland-reliant species at risk and migratory birds; old-growth forest reliant species at risk and migratory birds; caribou, biodiversity; and aboriginal traditional land use (TLU), rights, and culture.”
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