With so much talk in recent years about Alberta’s — and Canada’s — phase-out of coal-fired electricity, Albertans could be excused for being surprised to learn that new coal mining is being proposed in the province.
They could be further excused for being surprised that the latest new project has been exempted from what would have been a required federal environmental assessment under Canada’s new impact assessment legislation.
That’d be the expansion of the Vista coal mine, reportedly among the largest so-far undeveloped coal mines in the entire country and potentially one of the largest in North America.
The project just barely avoided a federal environmental assessment thanks to some last-minute tweaks to numbers (more on that later) — leading some to question Ottawa’s process for exempting coal mines from federal review.
Vista produces thermal coal — coal burned to produce electricity, as opposed to metallurgical coal, which is used in steel production.
And while coal-fired electricity is being phased out in Canada, the coal mined at Vista will be exported and burned elsewhere — so the phaseout doesn’t apply.
Still, on the world stage, the federal government has taken an active lead in encouraging businesses and governments abroad to cut back on coal-fired electricity.
“It’s like getting a temperance lecture from the bartender,” Clark Williams-Derry, a Seattle-based energy finance analyst with the Institute for Energy Economics and Financial Analysis, told The Narwhal of Canada’s actions to discourage the global reliance on coal, whilst increasing our own exports.
“As he’s pouring the drink, he’s saying ‘you really shouldn’t be drinking so much,’ ” he said.
“The world knows [the Canadian government] hasn’t put their money where their mouth is.”
Interested in how exactly Alberta is still moving ahead with new thermal coal mining, without a federal environmental assessment? Read on.
Wait, we still burn coal?
According to the Alberta government, coal-fired power is still the main source of electricity in the province.
On average, nine per cent of Canada’s electricity is generated from the burning of coal, according to Natural Resources Canada.
And according to the International Energy Agency, coal is still the single biggest source of electricity for the world, representing a 38 per cent share of global electricity generation. The agency notes that coal is responsible for more than 40 per cent of global energy-related carbon dioxide emissions, too.
But aren’t we phasing out coal-fired electricity?
Canada and Alberta have committed to eliminate coal burned as a power source — known as thermal coal — by 2030.
“Thermal coal is seen as a low-hanging fruit in the fight against climate change,” according to Fraser Thomson, a lawyer with Ecojustice, Canada’s largest charity working on environmental law.
“It’s readily substitutable and is one of the most [greenhouse-gas] intensive of the large-scale electricity sources,” he said.
“Thermal coal is a 19th-century fuel that has no place in the 21st century,” he told The Narwhal. “It’s disastrous for the climate and dangerous for human health.”
“It really needs to be the first fuel to go if we’re serious about fighting climate change.”
So … why are we building new thermal coal mines?
Many coal-fired power plants are switching to natural gas in anticipation of the phase out in 2030, but that doesn’t stop us from mining coal.
Mining thermal coal that will be burned elsewhere allows Alberta to continue to cash in on a lucrative resource, while the emissions associated with burning that resource are accounted for elsewhere.
The Government of Alberta reported some $15.7 million in royalties earned on coal production (this includes coal not burned for electricity) in 2017, though this figure has been declining in recent years.
The Vista coal mine is expected to operate over a 10-year lifespan.
Tell me more about the Vista mine.
Part of the Vista mine project is already operational. The Coalspur mine, just outside of Hinton, Alta., can produce as much as seven million tonnes of thermal coal each year. (That’s a lot — for reference, the Hoover dam spanning the Colorado River weighs just under six million tonnes.)
The proposed expansion of the Vista mine would increase output by an average additional 4.2 million tonnes of coal each year for a decade.
Although at peak production, the amount of coal mined could nearly double, according to a Government of Alberta webpage that notes the expansion has the “potential to increase annual production from [10 to 15 million tonnes]” in total.
Emailed requests for interviews with representatives from Coalspur and Bighorn Mining, the companies behind the mine and its proposed expansion, went unanswered.
What exactly would the Vista mine expansion expand?
The existing mine, and the proposed expansion, are located just outside of Hinton, approximately 40 kilometres from the eastern edge of Jasper National Park.
The mine will require removing 192 million cubic metres of what is known in the industry as overburden — all of the rock, soil, trees and other materials that must be removed to access the coal
The area of the proposed expansion is an area of the foothills forested with coniferous trees and bisected by small creeks and streams, including a tributary to the Athabasca River. Two endangered populations of bull trout and rainbow trout are found nearby.
How much carbon pollution is associated with this mine?
The Impact Assessment Agency estimated the total emissions from the mine to be roughly 222,000 tonnes per year, the equivalent of adding 46,709 new cars to the road for one year, according to the EPA’s emissions calculator.
This is the carbon pollution associated with just the mining. The emissions associated with burning the coal are much higher.
The total production of the mine, should the expansion go ahead, could produce anywhere between 22 million tonnes and 33 million tonnes of carbon dioxide a year, according to Ecojustice. That’s the equivalent of adding 4.6 to 7 million passenger vehicles to the road for one year.
For Jule Asterisk, project manager with Keepers of the Athabasca, that’s simply not acceptable, given Canada’s climate targets and the country’s international role in pushing to reduce reliance on coal. “We should be thinking about future generations,” she told The Narwhal.
“It’s not that we’re saying stop all fossil fuel production, we’re saying no new fossil fuel production,” she said.
So where’s all this new coal going to go?
According to the company’s application, the coal will be shipped by rail to export terminals and sent to “international markets, primarily Asia.”
In early planning documents for the expansion, the company at the helm of the proposal, Coalspur, noted that it planned to send most of its coal to China, Japan and Korea, and that it had early agreements with CN Rail to ship the coal to Ridley Terminals — a large export facility located in Prince Rupert on B.C.’s west coast.
Does this make economic sense?
According to Clark Williams-Derry, a Seattle-based energy finance analyst with the Institute for Energy Economics and Financial Analysis, exporting coal can be a tough game to win.
“You’ve got a long rail trip from Alberta to the coast. Those costs are going to rack up,” he said, noting that transportation costs are billed by the kilometre. “And then you have to get it across the ocean.”
“The fact that you’ve developed a coal mine doesn’t actually mean the coal from that mine will find a profitable home.”
Williams-Derry notes that a significant determinant of the profitability of coal lies in its energy content, which he says is high at the Vista site compared to other large mining areas in the United States, like the Powder River Basin in Wyoming and Montana, where 16 mines produce nearly half of the country’s coal.
Still, he notes, that’s no guarantee the coal will fetch a profit. “This is a volatile and cutthroat market,” he said, noting stiff competition from other, much larger coal-producing countries.
“It’s hard to make a profit from shipping rocks halfway around the world.”
So, why are they forging ahead with this expansion?
According to the International Energy Agency’s report on the global coal market, published in December, “average prices in 2018 were more than 60 per cent higher than in 2016, making coal very profitable.”
That kind of news is a big draw for potential coal mines, according to Williams-Derry.
“In any commodity industry, when you go through a boom-and-bust cycle, everybody gets excited in the boom and everybody over-invests during the boom,” Williams-Derry says. “They lock themselves in.”
Were we exporting coal before?
Canada has long exported metallurgical coal, for steel making, but most thermal coal mined in Canada has historically been used here, burned for our own electricity generation.
It’s worth noting that Vancouver is home to a large thermal-coal export hub — 12.6 million tonnes of thermal coal left the Port of Vancouver last year, a third of all coal that moved through the port — but the thermal coal it is shipping to Asia is predominantly mined in the U.S.
Exporting more thermal coal mined in Canada, Thomson said, would be a marked shift in our global coal reputation.
“The proposal to increase the Vista coal mine — that’s a massive mine — will register on the global stage.”
But there is big competition in the thermal-coal export world. Indonesia, for example, exported 435 million tonnes of thermal coal in 2018, according to the International Energy Agency.
What did the federal government say about the impacts of the mine?
In a 30-page analysis released in December, the Impact Assessment Agency of Canada listed myriad potential harms that will arise from the mine.
Among the concerns, the agency included adverse effects on fish and fish habitat. According to the analysis, “there is high uncertainty as to whether the project could be carried out in a way that will not jeopardize the survival and recovery” of sensitive species known to be in the mining area.
The agency noted that “detailed assessments will be completed as part of the provincial environmental assessment process.”
The agency also listed adverse effects on species at risk, migratory birds, and Indigenous peoples and traditional activities — including effects on pre-contact archaeological sites found where the mine will be situated.
Each of these concerns relates to federal laws.
So this expansion must be undergoing a federal environmental assessment, right?
Federal regulations require a coal mine expansion undergo a federal environmental assessment if it would “result in an increase in the area of mining operations of 50 per cent or more” and if it resulted in “a total coal production capacity of 5,000 tonnes per day or more after the expansion.”
The second criteria was clearly met in this case — by a factor of more than seven. The Vista expansion would result in 36,723 tonnes of coal per day, blowing well past the amount needed to take care of the second part of the criteria.
But the company adjusted its estimate of the “project area” partway through the process, tweaking the size from its March 2019 filings in a revised estimate less than three months later — which left some wondering if it was intentionally done so the project could fit under the 50-per-cent threshold and avoid a federal assessment.
“Instead of acquiescing to an environmental assessment, Coalspur responded by slightly shrinking the area of mining operations … to just below the prescribed threshold,” Ecojustice wrote in a September 2019 letter to the Impact Assessment Agency of Canada.
The tweak meant the Impact Assessment Agency re-calculated that the Vista coal mine expansion “would result in an increase in the area of mining operations between 42.7 to 49.4 per cent,” so it was just below the 50-per cent threshold.
A spokesperson for the Impact Assessment Agency told The Narwhal by email that “the agency considers the most up to date information provided by proponents in determining whether a project as proposed meets the thresholds set out in the regulations.”
In the end, the expansion just barely squeaked by under the requirements for an environmental assessment — raising red flags for concerned parties.
What are people saying about there not being a federal assessment?
“While Coalspur may claim to have had other reasons for downsizing the expansion to just below the automatic assessment threshold, the timing of the company’s decision certainly raises questions,” Thomson said in an email. That raises larger concerns for Ecojustice.
“The Impact Assessment Agency plays a critical role in protecting local communities, species and ecosystems by conducting project assessments,” he added.
“If the agency were to form a habit of giving developers repeated chances to sidestep these automatic thresholds, it could undermine its ability to keep Canadians and the environment safe.”
So on behalf of their clients — Keepers of the Water, Keepers of the Athabasca and the West Athabasca Bioregional Society — Ecojustice requested the minister to use their discretion and to designate the mine for an assessment even though it slipped past the regulations.
The minister declined.
Ultimately, in a decision announced in December, the federal government decided that the Alberta Energy Regulator could cover all of the issues of federal concern in its environmental assessment. A spokesperson for the Agency said by email that “In making the decision not to designate the project, the Minister considered the potential for the project to cause adverse effects within federal jurisdiction; adverse direct or incidental effects; public concerns related to the effects; as well as adverse impact on the Aboriginal and treaty rights of the Indigenous Peoples of Canada.”
This mine expansion, Thomson said, “slipped through the cracks.”
“The Alberta government is willing to prioritize resource development,” Thomson told The Narwhal. “And the federal government is unwilling to assert its jurisdiction to even assess [this project].”
Ecojustice has raised concerns about the “rigour” of the provincial assessment process, including that there is much less opportunity for public participation or Indigenous engagement than there would be under a federal assessment.
Jesse Cardinal, interim executive director with Keepers of the Water, agrees. And she’s concerned the Alberta government “is supportive of the extractive industry.”
In her opinion, “the norm and the standard in Alberta is to rubber stamp these projects without any meaningful action to protect anything.”
The decision now lies with the Alberta Energy Regulator.
The final terms of reference — which lay out all the information that must be collected and prepared by the company — were issued in June 2019. The company can then move ahead with preparing an environmental assessment report to submit to the regulator.
Earlier this month, the company also applied to the regulator to construct new underground test mines in the same area.
The regulator told The Narwhal by email “an environmental impact assessment for Vista Coal Mine expansion (phase II) has not been submitted to the Alberta Energy Regulator for review.”
Until that happens, it’s a waiting game.
Update Thursday, April 9, 4 p.m. MST: This article was updated to reflect that the Athabasca River does not in fact flow into the North Saskatchewa