Under certain rules, the plant near Slave Lake can keep running for now
A refinery near Slave Lake in northern Alberta is in danger of being shut down because it has been processing oil without permission from the government for 22 years.
The order from June 20 says that the Enerchem plant was never approved under Alberta’s Environmental Protection and Enhancement Act (EPEA).
The order says that no one has been given permission to build, run, or clean up the plant, which goes against what the act says.
The order says that the oil fractionation plant 250 kilometers northwest of Edmonton can keep running while the owner, AltaGas of Calgary, looks for permission from the province.
Experts in environmental law say that the violation is a troubling sign of cracks in Alberta’s complicated system of rules and regulations, and that it hurts the way the province approves projects.
Nigel Bankes, a retired law professor at the University of Calgary, said that Alberta Environment needs to show the public that the plant is in compliance and that other facilities are not running without supervision.
“The idea that a big industrial project could run for years without getting permission is crazy,” Bankes said.
“I would call it carelessness.”
Bankes said that letting the company keep running without doing a proper review is a problem and assumes that the site is following environmental rules.
“We don’t know that, and there’s no way for us to find out.”
A question of diligenc
Alberta Environment says that the plant should have asked for permission from the government in 2011, ten years after it was built. But legal experts say that the site hasn’t had the right kind of oversight from the government since it started processing oil in 2001.
It’s not clear how the violation went unnoticed for so long or what environmental checks were in place at the time.
The enforcement order, which is in effect until June 2024, says that the owner must do a number of things to comply, such as monitor the water, air, soil, and emissions.
The order also says what needs to be done for a reclamation plan, keeping records, and reporting monthly and annually.
Director of the Environmental Law Centre in Edmonton, Jason Unger, said that the order calls into question the strength of Alberta’s regulatory system and the role of Alberta Environment as a watchdog for the industry.
He said that there was never a hearing to find out what the overall effects of the operation were, and that trying to enforce environmental rules after the fact is not a good idea.
“You have to wonder about the overall level of compliance,” Unger said. “From a strong regulatory point of view, it’s hard to manage risks and figure out what those risks are.”
As far as we know, the company kept doing what was required by the different regulations.-Alberta Environment
The plant is about 10 kilometers north of the town of Slave Lake. It uses fractionation, which is a type of distillation that oil refineries use to separate crude oil into more useful products.
It makes hydrocarbon fluids for fracturing and drilling oil and gas wells, as well as consumer fuels like furnace fuel, diesel, and specialized jet fuels.
In 2001, the refinery was built. When the $9 million project was announced, the plant was supposed to be up and running by November of that year and make 6,000 barrels of refined products per day.
Differing account
Officials from the government and the company have different ideas about how the approval for the refinery was missed and for how long.
AltaGas says that the confusion about who is in charge of regulating the operation is to blame. Both the company and Alberta Environment say that laws have changed in the past.
Experts say that their reasons don’t explain why they broke a law that has been in place for decades.
The federal government and Environment Canada have not yet said anything to CBC News.
In February 2021, AltaGas released its year-end report. It said that the refinery would be added to AltaGas’s portfolio after the company bought a controlling stake in Petrogas Energy Corp.
Alberta Environment says that when AltaGas bought the Slave Lake refinery in 2022, it told the government that it did not have provincial approval.
Tom McMillan, the head of communications for Alberta Environment, said in a statement, “As soon as we heard that the facility was still running, the department took action.”
McMillan said that the ministry is working with the refinery to make sure that it follows the “strict conditions” of the order. He said that there are now “formalized and mandatory notification processes” in place to make sure that regulatory oversight is still in place after changes in the law or in how things are done.
McMillan said, “Operators of all facilities are responsible for making sure that they are always running with all current regulatory approvals.”
“The previous owner failed in this area according to EPEA, but as far as we know, the company continued to meet all of the Alberta Energy Regulator’s requirements for an oil fractionating facility during this time.”
When CBC asked if the AER ever checked on the plant, including how it affected the environment, the AER said that it does not regulate oil refineries. Under the EPEA, it is the job of Alberta Environment to regulate oil refineries.
Watchdog question
Before it was built in 2001, Alberta Environment said that the refinery was first approved by the Alberta Energy and Utilities Board. Alberta Environment said that the board changed this permission to an industrial development permit the next year.
The act was changed when the EUB was taken over by the Energy Resources Conservation Board in 2008. In 2011, the law changed so that industrial development permits were no longer needed. Alberta Environment said that when the permits were taken away, the facility “was left without the approvals it needed to run.”
A representative for AltaGas said that when the Slave Lake facility started up in 2001, it was in full compliance with the rules that were in place at the time.
Since operations began, rules and regulatory bodies have changed. The company said, “We have worked with our regulators and will continue to do so to make sure we stay in compliance.”
“It was recently decided that the Slave Lake facility fits the definition of an oil refinery. This would put it under the control of Alberta Environment and Protected Areas.”
Permit implication
Bankes said that Alberta Environment’s talk about industrial development permits is a way to avoid taking responsibility. He said that getting rid of the permits didn’t change the operation’s status in a significant way.
Bankes said that the permits were never meant to get rid of the need for broader approval under the act.
He said that the refinery should have always asked for permission under the act.
“The act’s repeal of the development permit rules shouldn’t have left a gap in the process for getting environmental approvals,” he said. “It should have been done by Alberta Environment all along.”
Since 1992, Alberta has had a law to protect the environment. Bankes said that the operation should have asked for permission under that law before construction began.
He said, “If you run a refinery, you probably put some pretty nasty things into the air, so you’d need an air-quality approval and all sorts of other things.”
“That part of a business was never, ever covered by the industrial development permits.”
Unger said that the company’s comment that the plant was “recently interpreted” as an oil refinery also calls into question who is responsible.
Under the EPEA, approval is needed for certain activities, and oil refineries have been on that list for a long time.
Since 1996, the definition of an oil refinery has stayed the same: “a plant for making hydrocarbon products from oil, heavy oil, crude bitumen, or synthetic crude oil.”
Unger said that the fact that the company has been running for so long without permission makes it harder for regulators to say no to the project.
He said that a lot of the language in the enforcement order sounds like what would be in an operational approval document.
“Perhaps even more troubling is that we don’t know if the monitoring, reporting, and emission standards that are part of the enforcement order were ever followed.”
It’s clear that someone dropped the ball.– Murray Kerik
Murray Kerik, who is in charge of the Municipal District of Lesser Slave River, said that the violation was not reported to the local government. He said that the council will talk to Alberta Environment to find out what went wrong.
Kerik said that his community is open to business, and he hasn’t heard of any problems at the plant in all the years it has been open. However, the lack of proper oversight is worrying.
“You hope that they are following all the rules. But isn’t that where Alberta Environment should be keeping an eye on things?
“It’s clear that someone dropped the ball.”