Monday, October 24, 2011

Cliffs Chromite Project and the Environmental Assessment Process: Time Will Tell

I read with interest an article appearing in the Sudbury Star about Cliffs Chromite Project and the federal environmental assessment process which is now officially underway (“Environmental assessment begins on Cliffs project”, the Sudbury Star, October 12, 2011). I’ve been getting more interested in this project as details have started to filter out into the public over the past year. The project, which includes new mines in Ontario’s remote north, and a new smelter facility which might locate in Sudbury, became a bit of a provincial election issue in Sudbury when it became clear that there was a significant level of uncertainty surrounding the project’s costs to taxpayers. I blogged about this uncertainty in late September (see: “How Much Does That Cost? Part III: Cliffs, Chromite & Moose Mountain”, sudburysteve.blogspot.com, September 29 2011), and identified a number of questions for which I hoped answers would be forthcoming.

Since reading the initial press release from the Canadian Environmental Assessment Agency (CEAA), and after reviewing the CEAA’s draft guidelines for the Cliffs Chromite Project, I’m optimistic that some of the questions which need answering are likely to be answered through the environmental assessment process. It appears that Cliffs is intent on working with the federal and provincial regulators to provide a lot of detailed technical information regarding their project. Cliffs provided a decent overview of their proposal to the public earlier this year which I found to be informative and upfront, and it was from that overview that many of the questions that I have with the project have emerged (see: Cliffs Chromite Project – Project Description Summary, February 2011).

The Process

Of course, questions are expected to be asked at the outset of any project designated for an environmental assessment. Soon, it will be time for Cliffs to provide answers. What the CEAA will be ensuring is that the government’s own questions, in compliance with federal and provincial environmental regulations, will be answered by Cliffs (and from reviewing the CEAA’s draft guidelines, it’s clear that the CEAA has a LOT of questions for Cliffs to answer).

The CEAA’s requirements, however, can be considered as a “baseline”. The environmental assessment process contemplates that there may be more questions to ask, which are project-specific and beyond the scope of what would be considered baseline. Those questions, too, may be valid ones to have answered about any project, but this is where things start to enter the realm of uncertainty. Where the CEAA identifies project-specific matters and issues which are beyond the baseline, there’s a good chance that an EA proponent is going to turn their attention towards answering those questions (it’s a smart idea to stay on a public regulator’s good side).

However, the EA process is a public process. What about those questions which are bound to be asked by members of the public? Let’s use me as an example, as I intend to participate in the unfolding environmental assessment process. I may ask a question or raise an issue with the specifics of this project which might not be something which the CEAA has considered. The CEAA can then either adopt my question/issue and direct Cliffs to address it, or they can decide that my question really isn’t relevant to their decision-making process, and should be ignored.

And rightly so. I can easily see circumstances where those involved in a process like this might want an EA proponent to give them the moon, requiring the production of expensive technical studies which really won’t assist with decision-making. I would think that often EA proponents are requested by the public to prove a negative, such as to show the absence of something, either from a site, or from a process. Sometimes, it’s important to show that a feature isn’t there (such as showing that an industrial process won’t emit carcinogens, or that there are no endangered species living on the site). But I’m sure it’s easy to carry things too far (such as a study which shows the impacts on future homeowners where no one is planning to ever build a home).

I’ve never participated in an environmental assessment process before. I’m hoping that the questions that I have fall into the group of questions which are deemed relevant, but I would terribly na├»ve if I thought that all of my questions will be treated that way through this process. All that I ask of this process is if I have a relevant question, I’d like to see it answered. And if my question isn’t relevant, I’d like to shown why it’s not. I think that’s reasonable. I guess I’ll find out. I’ll certainly be providing the CEAA with my comments pertaining to their draft Guideline, which is the best opportunity to identify which additional questions should be asked.

Costs

Some of the questions that I have pertain directly to costs, and specifically to the cost of electricity which Ontario taxpayers may be on the hook for in terms of a subsidy. Cliffs estimates that the processing facility is going to require the same amount of electricity (largely to run its arc furnace) as a city with a population of 300,000 uses. That’s a lot of juice! And with energy prices higher in Ontario than in surrounding jurisdictions, it’s no wonder that Cliffs is looking toward our government to chip away at the price per kilowatt hour.

So I’ll be wanting more information in terms of the amount of power which Cliffs intends to use, and I’d like to see a pricing scheme based on estimates related to the actual and anticipated cost of electricity over the lifetime of the project.

Of course, this may be considered beyond the scope of the EA process, because the environmental assessment doesn’t appear to concern itself significantly with costs. It starts at a point where it assumes that if there are costs, they’ll be paid. Unfortunately, it’s not always clear through the process who it will be that ends up paying the costs. In the case of Cliffs Chromite Project, the taxpayer is the one who will likely be on the hook for paying the massive subsidies needed to make this project profitable for Cliffs.

Look, maybe there’s a case which can be made which shows that the project and economic spin-offs are a good investment for we taxpayers to make. Maybe it makes sense that we subsidize the electrical costs of this project (along with some other costs). But until we get all of the facts about the project, along with its expected lifetime costs, it seems premature to suggest that the project makes sense at this time. Yet some of our elected leaders seem keen to jump into supporting this project, feet first and eyes closed as it were.

Environmental Considerations

Along with the electrical costs, what sort of environmentally-related costs can we expect from this project? How might this project effect the health of our ecosystems and our own health down the road? What sorts of greenhouse gas contributions will the project contribute to our atmosphere over its lifetime? Is there a likelihood that our drinking water could be contaminated by the industrial by-products of chromite processing?

These are questions which will be raised and hopefully answered through the environmental assessment process, which is great (although the emphasis on greenhouse gas emissions seemed a little weak in the Draft Guideline).

However, what about long-term costs associated with environmental issues? For example, how will this project continue to be economically viable when the government decides to put a price on carbon? Now, for many it may seem foolish to speculate about the economic impacts of carbon pricing, given that there currently isn’t any price on carbon emissions at the moment. Yet, here in Ontario, we are part of the Western Climate Initiative, which is a group of sub-national governments in Canada and the United States which are currently working on a cap and trade carbon emissions trading scheme. Since we just elected a new government here in Ontario which ran on a platform which committed it to the Western Climate Initiative, it seems logical to imply that there will (one day soon) be a price on carbon emissions. Given this situation, I’ll be looking to the environmental assessment process to provide information about these costs, as certainly they will be applied to the project’s electrical needs.

And then there’s hexavalent chromium. I understand that hexavalent chromium is a particularly carcinogenic by-product of chromite processing, one which interacts with acidic soils to produce toxic run off. The Draft Guidelines specifically reference studies needed to look at hexavalent chromium, which tells me that the government is also concerned about this chemical compound. I’d like to know more about what sorts of costs the public could be on the hook for should this compound end up in our drinking water supply (Lake Wahnipitae is pretty close to the site proposed for the new smelter).

Process Questions

Cliffs has submitted a project which includes four separate components: 1) mining of the Black Thor deposit; 2) processing of materials on-site; 3) a transportation system which includes a new road to the mine site; 4) a production facility/smelter, which for the purposes of the EA submission, assumes a location outside of Capreol at Moose Mountain.

First off, is the success of each of these components needed for the project to receive approval? What might happen if a smelter location elsewhere is chosen? Will Cliffs have to go back to square one with a whole new environmental assessment? I would think that maybe Cliffs would have to do that, no matter how silly it might seem. But if you think about it, transportation impacts for example may change, dependent on where a smelter is going to locate.

Will Cliffs now be tied to making a commitment to Sudbury, simply by virtue of the environmental assessment process? What if it proves that a different location is actually a better location, in terms of the environment?

These are questions which will need to be addressed as the process itself unfolds.

Comprehensiveness

The above question about process really got me thinking about just how comprehensive this environmental assessment will be. You see, Cliffs owns the rights to a number of other deposits close to Black Thor (including one known as the “Big Daddy” deposit). Yet the anticipated impacts from these other projects won’t be factored into the current environmental assessment. Now, as far as on-site impacts at the areas to be mined, that might make sense. But what about at a smelter facility? It’s not really likely that a new smelter to be built in Sudbury is going to process materials only from Black Thor, is it? Not when Cliffs owns the rights to other deposits, and other mining companies are ready to move forward developing their own deposits too.

Yet, it seems to me that the process for siting the smelter is only going to contemplate anticipated impacts from just the Black Thor deposit, which is absolutely absurd! For example, if materials from Black Thor are going to require an amount of electricity which a city of 300,000 people use, what about Black Thor and Big Daddy together? Sure, it’s actually the size of the arc furnace which would be the determinative factor, I get that. But at some point, if there’s enough material working its way to Sudbury from the Ring of Fire, why wouldn’t Cliffs think about installing a second arc furnace?

And as far as the transportation system goes, right now the Cliffs Chromite Project estimates that there will be between 50 and 100 trucks travelling daily to and from the railhead at Nakina. But that’s just for Black Thor. What about the other deposits Cliffs controls? And what about other companies in the area?

Well, it turns out that these aren’t just questions that I’m asking. I’ve discovered that a number of other organizations who have been paying attention to the Ring of Fire are also concerned about the lack of comprehensive analysis which the CEAA is requiring Cliffs to undertake. Now I appreciate that Cliffs is the “first through the door” as it were, and can’t be responsible for whether other companies ever develop their deposits or not, but at the same time, if there is a high level of expectation that some of these other projects will move forward in the near future, it only makes sense that they be included in a more comprehensive analysis.

Such an analysis may show, for example, that the road network proposed by Cliffs doesn’t make economic or environmental sense, and instead a new rail line would be better for Ontarians. Rail is a better transport option for high-volume traffic, and given that Cliffs is already contemplating the use of rail to move their product from Nakina to Sudbury, I’d have to think that if the Black Thor deposit only is being evaluated, rail probably makes sense as the right environmental choice, despite its initial higher costs (and maybe those costs really aren’t all that high). Throw in the development of the other deposits, and rail increasingly makes sense.

Yet the CEAA seems determined not to look at the anticipated comprehensive impacts. On October 12, 2011, Mining Watch Canada put out an excellent press release about the CEAA’s decision not to look at cumulative impacts (see: “What Kind of Environmental Assessment for Ontario’s Ring of Fire?”). In an article which appeared in the October 20th edition of the Sudbury Star ("Chiefs aim to stop review", October 22 2011), it appears that the Matawa First Nation, which has traditional lands in the Ring of Fire, is also extremely concerned about the lack of comprehensive analysis being required by our government before development can proceed.

Timelines

The CEAA process is estimated to take about a year and a half from start to finish. I suspect that’s a fairly optimistic timeframe, given the circumstance. I hope to be engaged throughout the process, and I invite others to become involved as well, especially if you have an interest in ensuring that this project proves itself to be in the interests of Ontarians. With significant public subsidies which are likely to be in the multiple-billions of dollars on the table in order to make this project profitable for Cliffs, its incumbent that we remain engaged and have our questions answered.

I’ll be sure to post a copy of my letter to the Canadian Environmental Assessment Agency to this site prior to the November 15, 2011 deadline for submissions.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with those of the Green Party of Canada)

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