KEARL PERMIT DENIED
Imperial project delayed as it awaits Cabinet action
Claudia Cattaneo, Financial Post, With Files From Carrie Tait
Published: Thursday, May 15, 2008
CALGARY - Imperial Oil Ltd.'s $8-billion Kearl oil-sands project faces a major delay after a federal court judge yesterday turned down its request to have a key permit reinstated.
The permit, required to de-water the Kearl site, was pulled by the federal Department of Fisheries and Oceans after an environmental-impact assessment by a federal-provincial panel was deemed to be incomplete, the result of a court challenge by a coalition of green organizations.
Imperial, 70%-owned by Exxon Mobil Corp., asked Mr. Justice Douglas Campbell last week to exercise his discretion and restore the permit, arguing it had no fault in the situation, which was due to a minor error of law made by the panel.
"Since the report [of the panel] is incomplete it must be completed, and once completed it must be, yet again, placed before the Governor in Council for approval, and if approval is given, a new authorization must be provided by the Minister of Fisheries and Oceans to allow Imperial Oil Ltd. to proceed," Judge Campbell said in a written ruling.
As it turned out, the panel fixed the error and completed its report last week.
However, the court decision confirmed that the original permit is no longer valid and the federal Cabinet will have to decide once again whether to give the project the green light.
That makes it the second major Imperial-led project waiting for federal government action. The $16.2-billion Mackenzie Gas Project has been stalled for a year waiting for a federal fiscal deal.
During the court hearing, Munaf Mohamed, a lawyer for Imperial, said the project faced a delay of a year or more because the company had a short window in which to carry out de-watering work needed to prepare the Northern Alberta site. Without the Fisheries authorization, Imperial cannot disturb fish habitat by any means other than fishing.
Yesterday, Imperial spokesman Gordon Wong said the company would work with the government and comply with the process.
"Kearl is an important project," he said. "Kearl is a significant undertaking that has a positive economic impact on the Canadian economy."
No decision has been made about whether to appeal Justice Campbell's ruling.
Simon Dyer, director of the oilsands program at the Pembina Institute, one of the green organizations that challenged the panel's environmental assessment, called Justice Campbell's decision a major win with broad implications for oilsands development.
The group originally challenged the environmental assessment on grounds it did not adequately address greenhouse gases.
"There is going to be a real requirement for a higher duty of care on environmental assessment and better decision making and reasoning from these joint panels," Mr. Dyer said.
"It demonstrates that oilsands issues are going to continue to escalate. These things won't be resolved until we see some leadership from the federal government to set out the rules of engagement."
Sean Nixon, a lawyer for Ecojustice, which represented the green organizations, said the federal government has to obey its own laws.
"There's so little open public debate about these things, certainly within in Alberta," he said.
"So the courts, when the governments aren't openly allowing debate about pace and scale of oilsands development, become the avenue of last resort for groups like the ones we were representing, and become an important adjunct to the democratic process; become an important check on what the government is doing."
