Move over Duffy diaries. There’s a new black book in town.

That’s the detailed work journal of B.C. Ministry of Environment senior official Frazer McKenzie, which recounts conversations between ministry officials and Rio Tinto Alcan while the company was applying for a permit to increase aluminum production at its Kitimat smelter.

“Frazer McKenzie was a diligent and thorough employee. He documented ongoings with Rio Tinto Alcan within government that we’d otherwise never know about,” lawyer Chris Tollefson told DeSmog Canada.

During the application process, Rio Tinto Alcan financed McKenzie’s position at the Ministry of Environment through a secondment agreement and government officials repeatedly refer to the company as a “client.”

DeSmog Canada has learned this parlance has become commonplace between ministry officials and industry. Indeed, much of what occurred in the Rio Tinto Alcan case appears to be standard operating procedure. 

McKenzie's journal — made public due to an appeal — offers a rare glimpse into the inner workings of B.C.'s Ministry of Environment. 

The ministry has argued that it agreed to allow the company to fund McKenzie’s position because of concerns there would be “inadequate staffing to deal with the application” otherwise. Such arrangements with industry are not entirely unusual due to chronic underfunding.* 

Rio Tinto Alcan’s application, which was approved by B.C. in 2013, granted the company the right to increase sulphur dioxide emissions in the Kitimat airshed by 56 per cent.

Sulphur dioxide is released from the combustion of sulphur-laden fossil fuels — such as the petroleum coke used to smelt aluminum — and irritates eyes, noses, throats and lungs. People with asthma, children and the elderly are at increased risk from sulphur dioxide exposure.

Two Kitimat elementary school teachers — Emily Toews, who suffers from asthma, and Lis Stannus — are now challenging that permit approval through the B.C. Environmental Appeals Board, arguing the project threatens human and environmental health. The appeal, being heard by a tribunal in Kitimat, is in its third week.

“This case really does represent a situation where you have a regulator that has gotten too close to a powerful and well-resourced private interest that it is supposed to be independently regulating,” Tollefson told the tribunal.

Central to the tribunal are the extensive notes McKenzie took while the Ministry of Environment, including manager of environmental protection Ian Sharpe, and Rio Tinto Alcan discussed the company’s permit application.

On Monday, Sharpe told the appeals panel Rio Tinto Alcan was “after comfort in the authorization process” and that he discussed the possibility of creating “some kind of comfort letter or document…that would give Rio Tinto Alcan’s board the comfort they needed to get on with funding.”

“This is B.C.’s version of the Duffy senate scandal: it shows how deeply comfortable government and industry are with one other,” said Richard Overstall, counsel for Emily Toews.

Notebook Shows B.C. Left Sulphur Dioxide Limits Unanswered

McKenzie’s notes show the provincial government was aware of scrubbing technology — used to eliminate sulphur dioxide emissions from smelters around the world — but chose not to require Rio Tinto Alcan to put that technology in place.

Under cross-examination, McKenzie read aloud his notes, which referenced Rio Tinto Alcan’s request to eliminate the mention of scrubbers from an internal memo. He also noted a phone call from a deputy minister who “did not want to let a little SO2 get in the way” of Rio Tinto Alcan’s project.

McKenzie’s journals also show the company was anxious about the projected increase of sulphur dioxide emissions from the modernization project and wanted regulatory certainty to calm investors.

Rio Tinto Alcan requested specific sulphur dioxide discharge limits during the creation of a joint memorandum of understanding (MOU) with the province. Under the MOU, the province committed to regulate Rio Tinto Alcan under sulphur dioxide standards from the 1970s — and guaranteed those weak rules would stay in effect for the project until at least the end of 2018, even though the province introduced much stronger interim standards in 2014.

Those weak standards were eventually dropped altogether by Sharpe, who said he began to consider them “obsolete,” but told the panel he could not recall when. No new standards for Rio Tinto Alcan’s smelter have been put into place and, according to Sharpe, won’t be in place until B.C. or the federal government mandate them after conducting a full public consultation.

McKenzie’s notes make numerous mentions to Rio Tinto Alcan’s desire for “certainty” regarding potential SO2 standards.

“SO2 is troubling to Alcan,” McKenzie wrote in one entry entered into evidence. “Insisting they have limit ahead of time — something in writing.”

McKenzie noted in one internal correspondence, “Alcan is anxious to get green light…to provide good news on project to stakeholders.”

The province approved the company’s permit in 2013 but did not release an environmental monitoring plan until 18 months later. Although the modernization project is very close to complete, it remains without sulphur dioxide emission limits.

Appellants Point to Regulatory Capture

Between the period of 2007 and 2013, McKenzie was seconded to Rio Tinto Alcan, which funded his position. He worked closely with the company during the permit application process.

Tollefson argues Sharpe's close ties with Rio Tinto Alcan influenced and ultimately fettered his decision-making.

The evidence shows that government of B.C. and Rio Tinto Alcan “deliberated carefully over the language” contained in their agreement “knowing that it might be challenged in court on the ground that it fettered the discretion of the decision-maker charged with granting the permit,” he told the panel.

“We need to reinvigorate the idea of a regulator as a fearless public defender,” he said.

That was not the case with Ministry of Environment officials, who, according to Tollefson, throughout years of documents refer to Rio Tinto Alcan as a “client” and tend to view the world through “industry-coloured glasses.”

Overstall said there was a “slow creep” of industry’s interests into government activities.

“That’s what we see with the Duffy scandal: these guys get so involved they lose their compass,” he said.

“No one wakes up one morning and decides, ‘I’m going to get cozy with industry.’ It’s more of a slow creep,” Overstall said. “They make small decisions one after another behind closed doors thinking what they’re doing is okay until suddenly the public spotlight is shone on them.”

* This story was updated after publication to add more context about the frequency of secondments and the use of the term "client" to refer to companies applying for permits with the Ministry of Environment.

Image Credit: Rio Tinto Alcan

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When the B.C. Ministry of Environment approved Rio Tinto Alcan’s application to modernize its aluminum smelter in Kitimat, B.C., local resident Emily Toews assumed that would mean an improvement in the plant’s emissions.

But the modernization project, which will increase the plant’s production, will raise sulphur dioxide (SO2) emissions by 56 per cent from 27 to 42 tonnes per day.

Toews, who suffers from asthma, told a tribunal in Kitimat Monday she decided to remain in Kitimat in 2010, rather than move to West Kelowna with her husband, because she had “previous knowledge that the modernization project would reduce emissions.”

The tribunal, hosted by the B.C. Environmental Appeals Board, is entering its third week in Kitimat after two weeks in Victoria. The board began investigating the government's approval of the Rio Tinto Alcan modernization project after Toews and fellow Kitimat resident Lis Stannus asked it to overturn the decision, saying increased sulphur dioxide emissions endangered their community's health.

The project, granted approval from the B.C. government in 2013, will reduce greenhouse gas emissions from the smelter, but not sulphur dioxide emissions because Rio Tinto Alcan was not required to introduce scrubbers, commonly used in smelters to remove the pollutant from airborne emissions.

Toews, who has a 10-month old child and is a kindergarten teacher, said she’s worried about the impact the increased pollution will have on the community’s children.

Sulphur dioxide, a pungent pollutant that results primarily from fossil fuel combustion, irritates the skin as well as the mucous membranes of the eyes, nose, throat and lungs. Exposure to sulphur dioxide aggravates the respiratory systems of asthmatics and is known to negatively affect the respiratory systems of children and the elderly. 

She told the tribunal that several children in the Kitimat school where she teaches suffer from asthma.

“Working at an elementary school there are a lot of illnesses going around,” she said. “During allergy season I often have to help kids, or help administer their medication before they go outdoors.”

”I’m concerned for other people in the community,“ she said.

Toews questioned why, if solutions like scrubbers are a possibility, the province didn’t require them when approving the smelter modernization project.

Scrubbers, which can either create dry sulphur waste or can use seawater which converts SO2 to sulfates for a benign release into the ocean, are commonly used in European smelters.

Toews told the panel she cannot see why the province wouldn’t require Rio Tinto Alcan to employ scrubbers to eliminate the SO2 emissions problem in Kitimat.

“No I’m not opposed to the modernization project, however I am opposed to increasing one emission — sulphur dioxide — and I don’t understand why that emission was left out of this 'state of the art' modernization process,” Toews said.

“I’d like this panel to consider having Rio Tinto produce the best state of the art reduction in emissions possible with the technologies that are available and to my knowledge there are technologies that are available to do that.”

An expert witness who previously gave testimony during the hearings told the panel Rio Tinto Alcan was avoiding paying for the installment of scrubbers and thereby externalizing the costs of SO2 emissions onto the health of local households.

Chris Tollefson, a lawyer representing Toews’ co-apellant Lis Stannus, said the company is primed to install scrubbers in a “plug and play” manner.

“There’s no dispute on the evidence that these scrubbers can be installed with relative ease,” he told the panel. “In fact, the [Kitimat modernization project] has been designed and built with an onsite area specifically set aside for scrubbers to be retrofitted…on what the experts describe is a ‘plug and play’ basis.”

Tollefson said the company’s issue with scrubbers is cost — an estimated $100 to $200 million for installment, not including operating costs. The company estimated the modernization project would cost $3.3 billion but overruns have the project nearing $5 billion last summer.

Rio Tinto Alcan has “made this very clear to the provincial government…that they simply do not want to spend the money.” Government officials from the B.C. Ministry of Environment were also too concerned with Rio Tinto’s interests, Tollefson previously argued, alleging the project’s approval without scrubbers at the provincial level is the result of regulatory capture.

Tollefson said he is asking the panel to “weigh the financial benefit to Rio Tinto Alcan of not being held to a rigorous environmental standard against the cost to the environment and human health of allowing Rio Tinto Alcan to increase its SO2 emissions by 56 per cent.”

The hearings, conducted by the B.C. Environmental Appeals Board, are currently underway in Kitimat.

Image Credit: Rio Tinto Alcan

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Increased sulphur dioxide (SO2) pollution from the expanded Rio Tinto Alcan (RTA) aluminum smelter in Kitimat, B.C. will result in increased health costs for local households, an expert witness told an Environmental Appeals Board panel in Victoria, Monday.

Dr. Brian Scarfe, an economist and cost-benefit analyst from the University of Victoria, testified before the tribunal that the externalized health costs placed on residents living near the Kitimat smelter will outstrip the cost of introducing scrubbers — which remove SO2 pollution from effluent — to the RTA plant.

In 2013 the B.C. government approved RTA’s permit to increase production of the smelter. The ‘modernization’ project will limit the release of other aluminum-associated emissions including greenhouse gases, but will result in a 56 per cent increase of sulphur dioxide being pumped into the airshed.

B.C. ruled RTA was not required to install scrubbers to prevent the SO2 increase from 27 to 42 tonnes per day.

Two Kitimat elementary teachers, Emily Toews and Lis Stannus are appealing the $3.3 billion project upgrade, saying it poses an unnecessary threat to human and environmental health. Appellant Emily Toews suffers from asthma, which heightens her sensitivity to even low SO2 levels. Children and the elderly are both at higher risk to SO2 exposure.

Before the appeal panel Scarfe argued the issue comes down cost distribution.

“I don’t like to think of this as a zero sum game, but that is what we have: costs are going to fall one way or another, benefits are going to fall one way or another,” he said.

"If you have a process that is generating some form of pollution you need to consider that an impact on the environment and perhaps on human life — that’s an externality."

“We can think about households on one side and RTA on the other: clearly if nothing is done to limit SO2 there will be costs to the environment and costs to households in the area and that’s one kind of distribution," he said.

"The costs fall on one side while the other avoids costs.”

High Sulphur Content of North American Petroleum Coke a Factor

According to Scarfe, the petroleum coke or petcoke, a byproduct of refined hydrocarbons, being used in RTA’s smelting operations is very high in sulphur content.

He said the higher the sulphur content of the petcoke, “the larger the SO2 emissions will be in relation to the production capacity of the plant.”

Scarfe added the low-sulphur petcoke market has dried up in recent years and that the higher levels of sulphur present in petcoke feeds may be the outcome of increased unconventional hydrocarbon production like fracking. Petcoke is also a waste product of bitumen upgrading in the Alberta oilsands, where the sulphur content is extremely high.

“The sulphur content of petroleum being extracted in North America has gone up in number over time,” Scarfe said. The weighted average sulphur content in U.S. refineries has risen from 0.9 per cent in 1985 to 1.4 per cent in 2014.

RTA’s modernization proposal says the smelter expects to use petcoke with an average of 2.9 per cent sulphur but could be as high as 3.8 per cent.

These levels of sulphur would exceed the acceptable limits for smelters without scrubbers in foreign countries such as Iceland, Scarfe said.

“If you were looking for solutions for large amounts of sulphur dioxide one of the options would be to buy petcoke, even if more expensive, with lower sulphur content.”

He added that given a consistent supply of low-sulphur petcoke can’t be guaranteed, a safer long term solution for the Kitimat airshed would be for RTA to install scrubbers.

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