March 10, 1999
(Environment and Labour)

Stricter environmental requirements placed on North Atlantic Refining Ltd.

The minister of Environment and Labour, Oliver Langdon, announced today a revised environmental Certificate of Approval for North Atlantic Refining Ltd. and plans to increase penalties under the province's Environment Act.

In 1994, North Atlantic Refining Ltd. obtained a Certificate of Approval and an environmental compliance agreement from the provincial government which allowed the company to reactivate the refinery. Both documents established the operational requirements for the company from an environmental perspective. The compliance agreement was deemed necessary at the time because it was recognized that environmental standards and legislation had become more stringent over the time the refinery was dormant and, therefore, it would take time for the new owners to make the necessary capital investment to bring it into compliance. It was also understood that this agreement would be monitored and updated when necessary.

During the summer of 1998, the Department of Environment and Labour undertook a review of the compliance agreement. As part of the review, consultations were held with the general public living in areas surrounding the refinery, the Department of Health and Community Services, the Eastern Region Health and Community Services Board and advice was obtained from the Ontario Ministry of the Environment.

"Government is aware of the concerns of local residents regarding the potential of the refinery to impact on the health of the people in the area. To improve on the level of data we have, we are requiring the company to undertake a significant and extensive emissions monitoring program. This program involves stack sampling and increased ambient air quality monitoring," said Minister Langdon. "The information will then be transmitted to health experts and if they identify any potential health problems we can immediately shift attention to those concerns."

Minister Langdon stated: "I want to make it perfectly clear that the health of the people living in the area surrounding the refinery is of the utmost importance to government and we are committed to taking whatever action is necessary to ensure health concerns are addressed."

During the consultation process, many people noted that the solution to the air quality problem at the refinery was simply to change the refinery's fuel oil. This matter was investigated thoroughly and it was determined that switching the refinery's furnace fuel to diesel would severely impact the company's financial position. "It would mean an expenditure of between $20 and $40 million dollars annually. Since nobody wants this refinery to be closed, we chose other options - options that would improve air quality without placing the company in financial jeopardy," said Langdon.

"What we are doing is having the company reduce its total annual sulphur emissions and imposing even tighter restrictions during the warmer months. As well, the company will be subject to daily emissions limits," said Minister Langdon.

To address the odour and haze problems at the refinery, the company will be implementing a heater replacement/upgrade program and installing covers on certain tanks which contribute to the odour problem. It will also undertake a number of operational changes which will have an impact on the odour and haze problem.

"It is estimated that the total cost of environmental improvements made as a result of the revised Certificate of Approval will be approximately $70 million over the five year life of the Certificate of Approval," said Minister Langdon. "I consider this to be a very substantial investment and I believe the schedule for environmental improvements is reasonable. Independent financial advice confirms that the company cannot be reasonably expected to do more at this time."

The department has now incorporated all the environmental terms and conditions directly into the company's Certificate of Approval. This change of approach is significant in that it provides the department with a stronger legal footing and enhances the department's enforcement capability.

Minister Langdon stated that the review of environmental conditions and possible options for dealing with environmental problems was very thorough and extensive. "We left no stone unturned," said Mr. Langdon. "We brought in a refinery expert from the Ontario Environment Department to review the refinery's operations and an independent financial consulting firm from Houston, Texas to review the financial future of the operation. Both confirmed our own findings that the refinery managers are on a proper course for dealing with the environmental problems and they are putting significant financial resources into this initiative."

The department's review has led to a significant legislative change. "I am pleased to announce that I will be introducing legislation in the House of Assembly to increase the penalties available under the Environment Act. Currently the Environment Act provides for maximum penalties of $25,000 per offence per day. However, the proposed bill will seek to increase this amount to a maximum of $1 million per offence," said Minister Langdon. "It is important to note that penalties under the Environment Act apply to all corporations operating in the province and not just to the refinery. The changes we are introducing will bring us in line with most Canadian provinces and should be a significant deterrent for those who might violate our legislation."

"I assure you that my department will take every reasonable step to ensure compliance with our environmental legislation," said Minister Langdon. "We take our job very seriously and we are working hard to ensure environmental problems at the refinery are addressed as quickly as possible."

Media contact: Sean Kelly, Director of Communications, (709) 729-2575 or (709) 682-2577.

1999 03 10                         11:10 a.m.