Grassy Mountain and the Limits of Adaptive Management

Introduction

On June 17, 2021, the Joint Review Panel (“JRP”) of the Alberta Energy Regulator and the Impact Assessment Agency of Canada (“IAAC”) rejected a proposal by Benga Mining Ltd. (“Benga”) to develop a metallurgical coal mining project in the Crowsnest Pass region of southwestern Alberta. The JRP concluded the Grassy Mountain Coal Project (“Project”) would result in significant adverse environmental effects that would not be outweighed by the Project’s modest positive economic impacts.

A close review of the Decision shows that the JRP found that Benga put forward a highly optimistic Project that lacked a systemic approach to dealing with the significant uncertainties it posed. As a result, the JRP did not have confidence in Benga’s ability to mitigate the environmental impacts.

The Decision is significant for a number of reasons, in particular the extent to which a proponent can rely on promises to undertake adaptive management to ameliorate uncertainties about the effectiveness of mitigation.

The Project

The Project involved the construction, operation, and reclamation of a new, open-pit metallurgical coal mine in the Crowsnest Pass. By its own estimates, the Project would produce a maximum of 4.3 million tonnes of coking coal a year. Production would occur over 23 years, followed by four years of active reclamation and decades of passive site management to deal with selenium in surface water.

The assessment of the Project considered a wide variety of environmental issues, but the most prominent one was water quality. The high risk of discharge of selenium into local watercourses (Blairmore Creek and Gold Creek, both tributaries of Crowsnest River) and the potential impacts on the threatened Westslope Cutthroat Trout (“WSCT”), which is protected under the federal Species at Risk Act (“SARA”), were major issues at the hearing.

Significant Adverse Effects

The JRP concluded that the Project would result in significant adverse effects on surface water quality and the WSCT. The JRP also found that there would be significant adverse effects on the Whitebark Pine (another protected species under SARA), native vegetative species and biodiversity.

Benga claimed it would use proven mitigation methods to address these potential adverse effects on water. Further, in the event these methods did not prove successful, Benga would rely on adaptive management to deal with it.

With regard to surface water specifically, Benga placed significant reliance on a single technology: the saturated backfill zone (“SBZ”). A SBZ is water saturated waste rock, which is kept in a submerged state and fed with a carbon-based feed to create a chemical reaction that is supposed to attenuate selenium in the water. This method is currently being used in B.C. by Teck Resources (“Teck”) at its Elk Valley mines. However, the JRP found that it had not been demonstrated to be effective at scale (i.e., on an actual operating mine as opposed to demonstration sites). Further, the JRP found that although Benga stated it would have several years to adaptively manage if the SBZ did not perform as expected and that Benga failed to provide sufficient detail about what it would or might do, leaving the panel with little confidence.

The Past

The hearing of the Project occurred against the backdrop of the long history of coal mining in British Columbia’s Elk Valley. The JRP wrote at paragraph 848, “The Elk Valley serves as a cautionary example regarding what could occur when sources of selenium and calcite formation are not controlled. It affirms the importance of preventing problems before they arise, rather than relying on adaptive management after contamination problems have taken hold.”

The precautionary principle featured prominently in the Decision. The JRP interpreted the precautionary principle to mean that where there are threats of serious irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation. The precautionary principle at the Grassy Mountain hearing took on increased stature because the “threat of serious irreversible damage” was so readily apparent in the Elk Valley, a short distance from the site of the Project.

Dealing with Uncertainty and Adaptive Management

The JRP acknowledged that every project will have uncertainties. However, the public interest consideration required the JRP to assess the environmental effects and the mitigation methods proposed to address those uncertainties.

In the case of the Project, the JRP found that Benga presented optimistic goals, assumptions and measurements were not conservative; and relied on a single, unproven mitigation technology, the SBZ. This last point was particularly important. At paragraph 1148, the JRP wrote “The strategy of ‘putting all one’s eggs in one basket,’ when the basket …is unproven, does not give us confidence that significant adverse environmental impacts can be avoided even if additional mitigation measures were later put in place.”

Benga’s response to concerns over the reliance on the SBZ and other uncertainties was to state that it would apply adaptive management techniques. However, the JRP stated that “a commitment to adaptive management does not eliminate the need to provide sufficient information on the environmental effects of a project.”

The JRP held that proponents must provide sufficient detail to demonstrate that project plans and proposed mitigation measures are technically and economically feasible, and that these techniques will effectively manage risk. Adaptive management, while not fail-safe, must have systematic and deliberate planning and rigorous implementation. As noted at paragraph 169, adaptive management required more than promising to implement a trial-and-error methodology.

Economic Benefits Insufficient

Proponents can often depend on the economic benefits of their projects to balance out any adverse effects. Not this time.

Benga prepared a Socio-economic Impact Assessment (“SEIA”), which is standard practice particularly in oil sands projects. Several interveners criticized this approach, arguing that a true cost-benefit analysis (“CBA”) should have been provided. The JRP held that a SEIA, while acceptable and important in assessing the economic impacts of a proposal, lacked an assessment of the benefits of the Project. The JRP recommended that the federal and provincial governments should require the use of both economic impact assessments and cost-benefit analysis for future EIAs or federal impact assessments to allow decision makers to make more informed decisions.

Among other things, Benga claimed that the Project would create approximately 400 full-time jobs and generate $77 million annually in royalties and income taxes, and hundreds of thousands annually in municipal taxes. However, the JRP found the Benga’s estimate of its royalty and tax payments was overstated. It concluded that the alleged economic benefits were modest and paled in comparison to the potential costs, both economic and environmental, of the Project.

In the result, the JRP found that even if the economic impacts were as great as predicted, the severity and the character of the environmental impact were such that they would have to deny the application anyway.

Take Away

The Project was rejected by the JRP because it determined that Benga presented an overly optimistic goal for selenium capture based on metrics that were not conservative. The JRP found that Benga’s confidence did not hold up to scrutiny and was not supported by the real-world experience of the Elk Valley, which showed that without a conservative, intentional, and well-planned approach, Alberta’s southern river basins could suffer the same fate.

Further, the JRP found that Benga failed to present a coherent adaptive management plan. Rather than a deliberate plan to deal with uncertainty, the JRP concluded that Benga’s promises to adaptively manage amounted to deferring important mitigation plans to an undefined point in the future.

The JRP essentially denied the Project as it found that Benga placed “all its eggs in one basket” with regard to selenium management, had an ill-defined adaptive management plan, and would provide only modest economic benefits. Therefore, the JRP believed denial was consistent with the precautionary principle and in the public interest.

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