Think-tank urges Upgrader Alley time out: Environmental impact overlooked, says Pembina

Robin Collum, June 17, 2008, Calgary Herald -- An independent energy think-tank is recommending a pause on development along Upgrader Alley until long-term plans are put in place to deal with the area's environmental impact.

Right now there is only one upgrader running in the 530-square-kilometre industrial zone between Fort Saskatchewan and Lamont known as Alberta's Industrial Heartland.

Two more projects are under construction and applications have been submitted for five more.

In a report released Monday, the Pembina Institute analyzes the impact this growth will have on the area's land, water and air quality, as well as the demands it will put on local infrastructure.

The report concludes growth is happening faster than the government is prepared to plan for it, and recommends a pause in construction to allow environmental regulations and infrastructure development to catch up.

"We would like to see a pause in development so that we get the planning in place first before any more upgraders are constructed," said Mary Griffiths, lead author of the report. "This would not mean a halt on development, because we already have two upgraders being constructed and a third one being expanded."

In total, the eight projects under construction or proposed would process 1.9 million barrels of oilsands bitumen a day.

Andrew Stephens, senior vice-president of corporate relations for Petro-Canada, said his company, which hopes to have its Sturgeon County upgrader built by 2011, has a water strategy in place that will enable it to cap withdrawals from the North Saskatchewan River at current levels.

Petro-Canada's Edmonton refinery expansion and its proposed Sturgeon County upgrader would use wastewater from Edmonton and Sturgeon Country sewage treatment plants.

"Our plan would be to use all of the wastewater that Sturgeon Country would otherwise have to treat," Stephens said outside an investors conference in Calgary. "We'll treat it and use it for cooling, recycle it and then provide it back to Sturgeon County to use further."

Griffiths said Pembina has advocated the use of waste treatment water and she said Petro-Canada's work in the area could be a stepping stone to building a network for waste treatment water users.

"The only downside is it still reduces flows in the river because the cleaned up waste treatment water isn't being put back in," she said.

The report states that, every year, Upgrader Alley will consume twice as much natural gas and 10 times as much water as the City of Edmonton. It will use enough electricity to power every home in Alberta and emit an estimated 45 megatonnes of greenhouse gases -- the equivalent of putting 10 million vehicles on the road.

"What we found is that the scale of development of Upgrader Alley northeast of Edmonton is much greater than probably most people in the region recognize," Griffiths said.

Griffiths was careful to emphasize that her conclusions are not anti-development, but a push for more responsible growth.

"Albertans can benefit from upgrading bitumen within the province, rather than exporting it for upgrading elsewhere, since the upgrading process creates jobs and forms the basis for many value-added products," the report reads.

"However, the developments planned for Upgrader Alley will have far-reaching effects on those living in the region."

The Alberta government is working on a growth management plan for the Capital Region, but it won't be finished until 2010.

According to Neil Shelly, executive director of the Alberta's Industrial Heartland Association, government and industry are doing everything they should to minimize the upgraders' footprint.

"In developing the heartland area we've always had our focus on that triple bottom line of economic, environmental and social development. We're looking at the environmental impacts and how we can mitigate them," he said.

He said the industry has been taking steps on its own to minimize damage to the environment. For example, experts are creating detailed airflow models to try to limit air pollution. Also, he said, most of the proposed plants are designed to be compatible with future carbon-sequestration facilities, which would be used to bury carbon dioxide deep underground.

According to the institute's report, however, measures like that won't be enough if they aren't combined with more aggressive government oversight.

"Given the fact that projects are likely to be approved before detailed plans and infrastructure are in place, some of the problems associated with rapid and uncontrolled growth in the Fort McMurray region could reoccur in Upgrader Alley," the report says.

The report's findings were echoed by lawyer Richard Secord, who represents a group of Industrial Heartland landowners.

"(My clients) are very unhappy with the performance of the regulator, Alberta Environment, in terms of the regional monitoring -- or lack thereof -- that's going on in that area," he said. "There shouldn't be any new projects approved until these problems are ironed out."