the elemental sulphur managementframeworkFOR THE INDUSTRIAL HEARTLAND

VisionWorld-class elemental sulphurmanagement in theIndustrial Heartlandthat sustainablysupports theenvironment, and social andeconomic aspects of development.

3

contents

4 Acknowledgements

5 Executive Summary

7 Introduction7 Mandate7 What is Elemental Sulphur?7 What Need is there for an Elemental Sulphur Management Framework?

8 Background

9 Consultation and Review Process

11 Elemental Sulphur Management Framework11 Vision11 Desired Outcomes11 Principles12 Boundary12 Elemental Sulphur

13 Framework Strategies14 Strategy 115 Strategy 216 Strategy 317 Strategy 4

18 Next Steps

19 Appendix 1: Definitions

22 Appendix 2:Regulatory and Non-regulatory Measures in Alberta

26 Appendix 3:Map of the Industrial Heartland

4

acknowledgements

Elemental Sulphur Working GroupLisa Sadownik – Chair, Alberta EnvironmentDoug Bertsch – North West Upgrading Inc.Steve Bolger – Total E&P CanadaClaude Chamberland – Shell Canada Ltd.Nick Corcoran – Kinder Morgan Inc.Mike Droppo – Kinder Morgan Inc.Locke Girvan – Strathcona County Andrea Hiba Brack - Natural Resources Conservation BoardMike Knoff – AgriumRobert Mann – HAZCODennis Maschmeyer – Lamont County Dennis McCartney – Lamont County Chris Micek – AgriumJennifer Nisbet – Sherritt Metals John Percic – Petro-Canada Don Roberts – International Commodities Export Company

of Canada Limited GlobalNeil Shelly – Alberta Industrial Heartland Association

SecretariatScott Beeby – Alberta EnergyMichelle Camilleri – Alberta EnvironmentRichard Chabaylo – Alberta EnvironmentJoLynn Ho – Alberta EnvironmentTim Jantzie – Alberta EnvironmentChris Lavin – Facilitator, Sierra SystemsNancy Mackenzie – Principal Writer Julie Norwig – Alberta EnvironmentJim Spangelo – Energy Resources Conservation BoardTracy Wadson – Alberta Energy

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executive summary

The Government of Alberta is moving toward an approach for land andresource management that promotes long-term sustainability and improvedquality of life for Albertans. Alberta’s Land-use Framework divides theprovince into seven regions and identifies the need for regional plans ineach. These regional plans will include strategies to reduce the footprint of human activities; manage the impacts of development on land, water, and air; and establish information, monitoring, and knowledge systems. A cumulative effects management approach will be used in the regionalplans to manage the combined impact of human activity on the environment.

The Honourable Rob Renner, Minister of Environment, announced onOctober 2, 2007 that a cumulative effects management approach would be applied to Alberta’s Industrial Heartland area. The Industrial Heartland is a sub-region of the North Saskatchewan Region and also falls within theboundaries of the Capital Region Growth Management Plan. It is a uniquearea zoned for industrial use by the municipalities of Sturgeon, Strathcona,Lamont, and Fort Saskatchewan in their Joint Area Structure Plan, andadjacent areas in the Capital Region. Many of the existing and potentialfuture industrial operators in the Industrial Heartland manage elementalsulphur as consumers, handlers, or producers.

Elemental sulphur is both a by-product of oil and gas processing, and avaluable commodity on the world market. Although the current economicdownturn has resulted in delays to some activities planned for the IndustrialHeartland, specifically a number of bitumen upgrading projects, it isanticipated that development will proceed when the economy improves. As a result, there will be a corresponding need to manage sulphur.

When businesses choose not to send sulphur to market, the by-product is typically stored on-site. The projected increase in sulphur production, an unpredictable future sulphur market, and the uncertain economic viabilityof transporting the by-product to market, are the driving needs for thisElemental Sulphur Management Framework for the Industrial Heartland.

The Elemental Sulphur Working Group, comprised of representatives fromgovernment, municipalities, and industry, worked together to create Phase Iof a management framework that would provide “World-class elementalsulphur management in the Industrial Heartland that sustainably supportsthe environment, and social and economic aspects of development.”

6

This Framework sets out a vision, outcomes, and principles, and presentsfour Phase I strategies to improve the management of elemental sulphur inthe Industrial Heartland now and in the future:

Increase knowledge and understanding regarding concerns and impacts(positive and negative) associated with the storage and handling ofelemental sulphur in the Industrial Heartland.

Require facility operators to pursue elemental sulphur managementmeasures that reduce or avoid the need for long-term elemental sulphurstorage in the Industrial Heartland.

Manage the handling and storage of elemental sulphur in the IndustrialHeartland to reduce the potential for adverse effects.

Revisit the Elemental Sulphur Management Framework for the Industrial Heartland to evaluate performance and adjust as needed.

Phase II for the Framework will be the implementation of therecommendations identified under each of these strategies.

1

2

3

4

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MANDATE

Cumulative effects management recognizes that watersheds, airsheds, and landscapes have a finite carrying capacity and that the current system of managing effects on a project-by-project basis may not be sufficient toensure that the environment is not over-allocated.

On October 2, 2007, the Honourable Rob Renner, Minister of Environment,announced a new cumulative effects management approach and thedecision to apply this approach to the Industrial Heartland. Cumulativeimpacts to water and air are being addressed through managementframeworks for these media in the Industrial Heartland area. The Ministeralso announced the need to examine sulphur management.

A Working Group was formed on November 3, 2008 to advise AlbertaEnvironment on the design and implementation of a framework to manage elemental sulphur in the Industrial Heartland, and help minimize the risk to human health and the environment. This framework will be part of land stewardship actions being developed for the Industrial Heartland. By describing a context for future elemental sulphur management in theIndustrial Heartland, this document represents the completion of Phase I.Addressing the recommendations described in this document will occurduring Phase II: Framework Implementation.

WHAT IS ELEMENTAL SULPHUR?

In Canada, by-product elemental sulphur is produced when sour gas isprocessed, and when bitumen is upgraded to synthetic crude oil. Sulphur isremoved from gas and refined petroleum products to reduce sulphurdioxide emissions that occur when these products are used as fuel. Sulphuris also an input to some industrial processes. The main commercial use ofthe by-product is to produce sulphuric acid for use in fertilizer productionand other industrial applications. It is understood that the intent is todescribe elemental sulphur whenever sulphur is referred to in this report.

WHAT NEED IS THERE FOR AN ELEMENTAL SULPHURMANAGEMENT FRAMEWORK?

Sulphur is both a by-product and an important commodity on the worldmarket; hence, it must be managed rather than treated as a waste product.Potential adverse effects associated with sulphur management are currentlymitigated through a combination of industry best practices and regulatoryrequirements applied on a facility-specific basis.

If the extent of industrial development proposed for the Industrial Heartlandproceeds, it is anticipated that there will be a large volume of elementalsulphur to manage in the region. The Elemental Sulphur ManagementFramework describes the context and approach for elemental sulphurmanagement in the Industrial Heartland in the future. It is based on adesired regional end result or outcome that balances the interests ofresidents, industry, and the government.

introduction

8

background

Alberta’s Industrial Heartland is a highly industrialized area located to thenortheast of Edmonton. It is home to a variety of industrial operations and isexpected to grow significantly in the future, specifically due to a number ofbitumen upgrading operations proposed for the area. Although some of thefacilities proposed for the area have been put on hold, it is anticipated thatdevelopment may proceed in the future, bringing with it an increasedvolume of sulphur to be managed in the Industrial Heartland.

Currently there are both sulphur consuming and producing facilities in theIndustrial Heartland. While there is no long-term storage of sulphur in theIndustrial Heartland, small volumes are held in liquid (molten) form in tanksand pits at production and consumption facilities prior to processing, or railor truck transportation. In addition, there are applications before AlbertaEnvironment that include plans to handle and store both blocked andformed solid elemental sulphur in the short-term.

Solid sulphur is typically stored on-site when producers can not send it tomarket either due to choice (discretionary) or circumstances beyond theircontrol, such as a transportation disruption (emergency). While emergencystorage is expected to be for shorter timeframes (i.e., until the event thatled to the storage is over), the choice to store sulphur can lead to long-termstorage depending on how a facility operator views their business withrespect to sulphur. A business may wait until the market is favourable interms of demand and price, recognizing that Alberta is at a competitivedisadvantage due to overland and ocean freight costs.

The current regulatory regime manages proposals for facilities involvingsulphur management on a case-by-case basis. There are a number ofregulators with different jurisdictions over sulphur management in Alberta.Municipalities determine where industrial development can occur via zoning.The Energy Resources Conservation Board addresses energy projects andthe Natural Resources Conservation Board addresses non-energy projects.The Boards will determine whether a project is in the public’s best interest.Alberta Environment decides whether or not environmental approval shouldbe granted and the conditions for construction, operation, and reclamationthat would go with this approval. (See Appendix 2 for more information.)

The large volume of sulphur that would accompany future upgradingprojects requires that a proactive sulphur management approach bedeveloped that is regional, comprehensive, integrated, and forward-thinkingin nature. The approach will support future decisions about individualfacilities by providing certainty, consistency, and public-assurance aboutexpectations for elemental sulphur management in the Industrial Heartland.

9

A Working Group was established on November 3rd, 2008. Participantsincluded industry, municipalities, and regulators. Invitations were extended to environmental non-government organizations; however, the invitations were declined.

In a series of workshops from November 2008 to March 2009, the WorkingGroup met to review presentations and discuss current sulphur managementpractices in Alberta, and the need for action now and in the future. The WorkingGroup discussed the mandate and the form that an elemental sulphurmanagement framework might take, developed Terms of Reference, and aframework outline.

In keeping with a cumulative effects management approach for the IndustrialHeartland, the group identified a vision, desired outcomes for sulphurmanagement in the Industrial Heartland, and principles to guide their work.

Information about existing regulatory requirements and guidance waspresented to the Working Group, and is attached in Appendix 2. Otherpresentations addressed the sulphur forming processes, trade flows, and thework being done by Alberta Sulphur Research Limited (an industry-fundedresearch group affiliated with the University of Calgary). Through these variouspresentations it became apparent that sulphur management is a complex anddynamic issue and that the resulting framework would need to strike a finebalance between the needs of the various stakeholders. This would be no easytask because the public requires assurance that regulators are taking a firmand consistent approach, while industry requires flexibility to deal with sulphuras both a marketable commodity and by-product in an ever-changing market.

Discussions to determine the best approach to take for sulphur managementin the Industrial Heartland focused on scenario analyses, which became thefoundation of the Framework. Scenarios analyzed were:

• Solid blocked elemental sulphur stored and handled in the Industrial Heartland.

• Solid formed elemental sulphur stored, handled, and transported in the Industrial Heartland.

• Molten elemental sulphur stored, handled, and transported in the Industrial Heartland.

The scenario analyses served to:

• identify potential issues with the storage, handling, and transport of elemental sulphur

• determine existing mitigation measures, best management practices, and regulatory requirements

• identify parameters for consideration, gaps, and potential solutions.

consultation and review process

10

Potential issues associated with sulphur management included in theanalyses were groundwater and surface water contamination, soilacidification, emergency incidences, odours, aesthetics, and dusting.

The analyses identified the following.

• Key issues of concern for working group members representing residentsin the vicinity of the Industrial Heartland included emergency incidences,odours, aesthetics, and siting of sulphur management facilities.

• Potential issues related to sulphur management can largely be mitigatedusing best industry practices.

• There does not appear to be a common understanding amongstakeholders about potential issues.

• Additional science based information about environmental outcomesrelated to sulphur management is required.

• There is not clear, consistent, and easily accessible guidance fromregulators about expectations for sulphur management in the Industrial Heartland.

Resulting from the analyses were four Framework strategies that form the core of the Elemental Sulphur Management Framework, Phase I. These strategies will be used to guide the work of implementing acumulative effects management approach for elemental sulphur in the Industrial Heartland. Implementation will commence with Phase II of the Framework.

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elemental sulphur management framework

VISION

World-class elemental sulphur management in the Industrial Heartland that sustainably supports the environment, and social and economic aspectsof development.

DESIRED OUTCOMES

• Management of elemental sulphur is part of an integrated cumulativeeffects management system in the Industrial Heartland.

• Effects and risks to humans and the environment are minimized.

> The quality of life for people who live and work in the vicinity of theIndustrial Heartland area continues to be safe and healthy.

• The Industrial Heartland area continues to be an attractive place to addvalue to Alberta’s resource development.

> Elemental sulphur production is acknowledged as a necessary componentof value-added resource development in Industrial Heartland.

• Alberta is recognized as a world-class leader in the management ofelemental sulphur.

> The approach used to develop the Elemental Sulphur ManagementFramework for the Industrial Heartland will help to facilitate the development of elemental sulphur management frameworks across the province.

> The public has confidence in how elemental sulphur is being managedin the Industrial Heartland area.

PRINCIPLES

• Provides certainty for current and future industrial projects.

• Sets objectives in support of meeting desired outcomes with the intent of minimizing the environmental impacts and the footprint of elementalsulphur storage, handling, and transportation.

• Provides for an adaptive management approach.

• Respects the required environmental outcomes and the diversity of decisions that may be made, while considering social and economic implications.

• Recognizes elemental sulphur as a commodity that is subject to fluctuations in the global market.

• Respects decision-making authorities and processes that currently exist.

• Provides for a timely, fair, and equal application of the Framework.

• Strives to manage the environment rather than managing individualindustrial projects.

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BOUNDARY

The Alberta Industrial Heartland Association boundary (see Appendix 3 for map) was adopted as the Elemental Sulphur Management FrameworkBoundary because:

• it is consistent with the area of focus proposed for other land stewardshipactivities in the Industrial Heartland

• the boundary includes the existing and proposed upgraders, which arethe primary sources of elemental sulphur in the region.

DEFINITION

Industrial Heartland is a 470-square kilometre area just northeast ofEdmonton. Industrial Heartland refers to the total land zoned by themunicipalities of Sturgeon, Strathcona, Lamont, and Fort Saskatchewan intheir Joint Area Structure Plan (ASP), and adjacent areas in the CapitalRegion.

ELEMENTAL SULPHUR

Elemental sulphur was defined as that which is:

• produced in the region

• consumed in the region from local sources or imported (to be consumed, stored, and/ or processed)

• exported from the region

• in transit (truck to rail; truck to forming or storage; rail to forming or storage; in pipelines)

• stored in the region as molten, solid formed, and solid blocked.

Further definitions are provided in Appendix 1.

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framework strategies

The framework recognizes increasing production at oil sands upgraders(existing, proposed, and future) as a major driver for defining a regionalapproach for sulphur management in the Industrial Heartland.

Uncertainty around when anticipated development will actually proceedmakes it important to clarify expectations and upcoming actions in advance.Having this clarification will provide regulatory certainty as new projectscome forward and move through economic evaluation, project design,application, regulatory review, approval, and decision-making processes.

The four strategies that follow set out a course of action for long-termelemental sulphur management in the Industrial Heartland. Whenimplemented they will:

• improve the knowledge base and collective understanding of elementalsulphur management impacts

• proactively address sulphur management in the Industrial Heartland,including how applications for solid (formed and blocked) sulphur storagewill be considered

• establish expectations for how sulphur handling and storage should be approached

• enable continued learning and adaptive management.

Strategy 1: Increase knowledge and understanding regarding concerns and impacts (positive and negative) associated with the storage andhandling of elemental sulphur in the Industrial Heartland.

Strategy 2: Require facility operators to pursue elemental sulphurmanagement measures that reduce or avoid the need for long-termelemental sulphur storage in the Industrial Heartland.

Strategy 3: Manage the handling and storage of elemental sulphur in theIndustrial Heartland to reduce the potential for adverse effects.

Strategy 4: Revisit the Elemental Sulphur Management Framework toevaluate performance and adjust as needed.

The strategies flow from one to the next and are intended to be consideredas a whole. Implementation of strategies 1, 2, and 3 could be eitherconsecutive or sequential. Information gathered and assessed throughstrategies 1 through 3 will provide the foundation for the implementation of the last strategy. Together, these four strategies complete Phase I of the Management Framework by providing the context for futuresulphur management in the Industrial Heartland. Phase II: FrameworkImplementation involves the work of addressing the recommendationsdescribed below for each strategy.

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STRATEGY 1Increase knowledge and understanding regarding concerns and impacts(positive and negative) associated with the storage and handling ofelemental sulphur in the Industrial Heartland.

Background• There is not a common understanding of the potential impacts

of sulphur management in the Industrial Heartland from the perspective of environmental outcomes.

• Residents living in the vicinity of the Industrial Heartland have concernsrelated to sulphur management that have not been addressed.

Considerations• A common understanding of concerns and potential adverse effects

associated with sulphur management will assist industry and regulators in making more informed and timely decisions in the Industrial Heartland.

• It is important that the Elemental Sulphur Management Framework bealigned with regional objectives for air, water and land being developedfor the Industrial Heartland.

Recommendations• Develop a monitoring and reporting program for environmental outcomes

to demonstrate that sulphur management activities in the IndustrialHeartland are well managed and not resulting in adverse effects. This mayinclude, at a minimum, the following.

> Selection of indicators for air, water, and soil (e.g., sulphate and pH) and identification of science based objectives.

> Consideration of both regional and fence-line monitoring.

• Develop a program to consult with local residents and other stakeholders on sulphur management in the Industrial Heartland in orderto do the following.

> Identify concerns.

> Assess positive and negative impacts (environmental, social and economic).

> Increase knowledge and understanding.

• Examine the regulatory process for consistency of public involvement and identify appropriate regulatory requirements for future sulphurmanagement activities.

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STRATEGY 2Require facility operators to pursue elemental sulphur managementmeasures that reduce or avoid the need for long-term elemental sulphurstorage in the Industrial Heartland.

Background• Sulphur producing and consuming facilities in the Industrial Heartland may

require the ability to store solid sulphur.

• There are no approvals to date for solid sulphur storage in the IndustrialHeartland; however, there are applications for solid sulphur storage underreview.

Considerations• As future industrial development proceeds, the volume of sulphur to be

managed will increase, resulting in either the need for long-term storageor alternatives.

• In comparison with other areas of the province that produce, handle, and transport elemental sulphur, the Industrial Heartland is well-situatedgeographically to move sulphur to market with respect to:

> proximity to market

> transportation infrastructure

> competitive cost.

• There are sulphur management alternatives outside of the Industrial Heartland.

Recommendations• Develop guidelines for regulatory applications related to solid sulphur

storage which include, at a minimum, the following.

> Description of storage required including form, amount, location, and duration.

> Rationale for storage requirements and alternatives explored.

> Discussion of potential adverse impacts, mitigation, and contingencies.

• Develop associated evaluation tools for regulators to use when reviewingsulphur handling and storage applications.

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STRATEGY 3Manage the handling and storage of elemental sulphur in the IndustrialHeartland to reduce the potential for adverse effects.

Background• Industrial facilities rely primarily on industry best practices and internal

standards to guide how they handle and store elemental sulphur.

• There is limited guidance from regulators on sulphur handling andstorage, which could result in inconsistency across facilities and a lack of clarity regarding expectations.

• There is a lack of information available to the public regarding industrybest practices and expectations for sulphur management.

Considerations• Regulatory applications involving sulphur management in the Industrial

Heartland are expected to increase should industrial development in the area proceed as anticipated.

• Industry requires regulatory certainty with respect to expectations for sulphur management in the Industrial Heartland.

• Potential adverse effects relating to sulphur management must bemanaged consistently and correctly.

• Information and understanding regarding sulphur managementexpectations in the Industrial Heartland should be easily accessible.

Recommendations• Include information requirements in application guidelines for sulphur

management facilities and associated regulator evaluation tools (Strategy 2) which consider, at a minimum, the following:

> siting

> mitigation including containment, dust control, odour control etc.

> operation

> emergency response.

• Identify a degassing requirement for sulphur that is handled and stored in the Industrial Heartland, and consider the need for other quality specifications.

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STRATEGY 4Revisit the Elemental Sulphur Management Framework to evaluateperformance and adjust as needed.

Background• Elemental sulphur management is a dynamic and complex issue

influenced by a variety of factors, including sulphur prices and demand,transportation availability and cost, forming and handling availability,production levels, regulatory requirements, and individual operators’business considerations.

• The economic situation has changed considerably since the October 2007announcement about addressing sulphur management for the IndustrialHeartland. A large portion of industrial development planned at that timehas since been put on hold.

Considerations• With an improvement in the economy, it is anticipated that industrial

development would again proceed.

• Future studies and monitoring will improve our understanding aboutconcerns and potential adverse effects related to elemental sulphurmanagement in the Industrial Heartland.

• The elemental sulphur situation in the Industrial Heartland will continue to change over time creating the need to re-visit the effectiveness andcontinued applicability of the Elemental Sulphur Management Framework.

Recommendations• Revisit the Elemental Sulphur Management Framework when the

economic situation improves, and proposed development proceeds, to assess its applicability and effectiveness, and make improvements, if needed. Criteria for consideration upon revisiting will include, at a minimum, the following.

> Learnings from the implementation of Strategies 1, 2, and 3.

> The situation in the Industrial Heartland at the time with respect to amount of industrial development and related elemental sulphurmanagement needs.

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next steps

Delivery of The Elemental Sulphur Management Framework for theIndustrial Heartland to Alberta’s Minister of the Environment marks the end of Phase I work to establish a context for future elemental sulphurmanagement in the Industrial Heartland.

Upon acceptance of framework recommendations from the Minister, the following next steps are proposed as part of Phase II: FrameworkImplementation.

• Convene a multi-stakeholder group to act as an Industrial HeartlandSulphur Management Framework Implementation Team.

• The Implementation Team is to do the following.

> Review Phase I recommendations and confirm understanding of intent.

> Identify priorities for implementation and strike subgroups as needed to support specific tasks.

> Develop a work plan for implementation of the recommendationsincluding roles and responsibilities, tasks, and timing.

> Begin work on tasks to deliver Framework recommendations.

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appendix 1

DEFINITIONS

Some of these definitions come from the Land Use Framework.

Carrying CapacityThe ability of a watershed, airshed, and/or landscape to sustain activities anddevelopment before it shows unacceptable signs of stress or degradation.

Cumulative EffectsThe combined effects of past, present, and reasonably foreseeable land-useactivities, over time, on the environment.

Cumulative effects management determines the capacity of the environment andecosystem to support the effects of all activities, and identifies thresholds for theair, land, water, and biodiversity.

A cumulative effects management system (CEMS) is an integral part of the Land-use Framework. The CEMS manages for the environment rather than managingin a project-by-project way and is focused on the desired environmental outcomes.

DegassingThe process of removing hydrogen sulphide (H2S) from molten sulphur.

Discretionary Sulphur StorageOccurs when the decision to store sulphur is made in the absence of economicincidences (i.e., for strategic or economic purposes).

Elemental Sulphur DustElemental sulphur dust is created when solid elemental sulphur breaks down to form fine particles. The elemental sulphur dust may be dispersed into the airwhere it eventually settles onto the surrounding environment.

Elemental Sulphur OdoursElemental sulphur odours occur when hydrogen sulphide (H2S) and sulphurdioxide (SO2) are released from elemental sulphur into the environment.Elemental sulphur odours are most noticeable during the handling of moltensulphur, including the pouring and re-melting of a sulphur block. Effective degassingminimizes odours.

Emergency IncidenciesFire, spills, train derailment, rail strikes, and temporary sulphur market disruptions.

Emergency Sulphur StorageOccurs when there is an emergency incidence that impedes the removal ofstorage from the site in order to allow a producer to continue production.

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Environmental OutcomesEnvironmental outcomes are environmental end states defining the specificconditions or functions of the environment.

FrameworkA framework is an underlying set of ideas, principles, agreements, or rules thatprovide the basis or outline for something intended to be more fully developed at a later date.

GroundwaterWater held in soil or rock, below the water table, is known as groundwater.Groundwater moves through permeable layers of rock known as aquifers.

Industrial DevelopmentIn the context of land use, this term means natural resource developmentactivities like exploration, harvesting, and extraction of natural resources. It can also mean, in a municipal planning/zoning context, the use, infrastructure,and activities associated with production (e.g., manufacturing, fabricating,warehousing, processing, refining, or assembly).

Industrial HeartlandIndustrial Heartland is a 470-square kilometre area just northeast of Edmonton.Industrial Heartland refers to the total land zoned by the municipalities ofSturgeon, Strathcona, Lamont, and Fort Saskatchewan in their Joint AreaStructure Plan (ASP), and adjacent areas in the Capital Region.

Primary Sulphur Handling FacilityAny location, structure, or equipment which is associated directly with andproximal to a sulphur production facility and which handles, stores, forms, remelts,or loads sulphur.

Reclaiming or Remediating a Sulphur BlockThe process of melting a sulphur block to produce molten sulphur.

Secondary Sulphur Handling Facility Any location, structure, or equipment which receives sulphur from a sulphurproduction facility or from a primary sulphur handling facility for the purposes of handling, storing, forming, remelting, or loading sulphur and is located asignificant distance from the facility from which it receives its sulphur or operatesby virtue of an approval independent of the sulphur production facility.

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StoredElemental sulphur held on-site regardless of time or containment structure.

Sulphur FiresIf ignited by spark or flame, sulphur will burn in air resulting in sulphur dioxidefumes. Sulphur dust suspended in air can be ignited by flame, static electricity, or spark.

Sulphur HandlingThe forming, pouring, re-melting, or movement of elemental sulphur on-site.

Sulphur Production Facility Any facility producing molten elemental sulphur as part of their process.

Surface WaterWater that occurs in rivers, streams, lakes, dugouts, and other fresh water sourcesis described as surface water.

StewardshipAn ethic whereby citizens, industry, communities, and governments work togetherto responsibly care for and manage Alberta’s natural resources and environment.

StrategyA series of actions for obtaining a specific goal or result.

Sustainable DevelopmentDevelopment that meets the needs of the present without compromising theability of future generations to meet their needs.

SustainabilityRelates to understanding the interconnections and continuity of economic,environmental, and social aspects of human society and the non-humanenvironment.

Systems ApproachAn approach to integration that recognizes the interdependence and interaction of parts of a system. It views systems in a holistic manner.

Transported Elemental sulphur moved off-site.

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SULPHUR MANAGEMENT – REGULATORY AND NON-REGULATORY MEASURES IN ALBERTA

Sulphur is regulated in Alberta by a number of agencies. These includeAlberta Environment (AE), the Energy Resources Conservation Board(ERCB), the Natural Resource Conservation Board (NRCB), Alberta Energy,and the appropriate municipality. Each regulatory agency plays a part inmanaging different aspects of the sulphur industry.

The following are some of the policies, guidelines, and directives relating to the storage, handling, transportation, and disposal of sulphur or sulphurwastes. Agency and industry responsibilities are also outlined.

Alberta Environment

Activities Designation Regulation (Alberta Regulation 276/2003)

The Activities Designation Regulation (Alberta Regulation 276/2003) underthe Environmental Protection and Enhancement Act (EPEA) requires anapproval for the construction, operation, and reclamation of a sulphurstorage facility and sulphur manufacturing or processing plant. An EPEAapproval may also be required for sulphur producers and primary sulphurhandling facilities, such as, upgraders or sour gas plants.

The EPEA approval addresses the environmental aspects related to sulphuroperations. These include air, surface water, wastewater, groundwater, soil,and waste. Any amendments and changes to an activity might be subject to the approval process.

Environmental Impact Assessment (EIA)

The requirement for an EIA for various sulphur projects can be mandatory,exempt, or determined at the discretion of the Director under the Act. The Director’s decision to require an EIA for a project is based on the sizeand nature of the issues involved. The Director can request information fromthe public, industry, and other government agencies to help decide whetheror not an EIA is necessary.

Guidelines for the Remediation and Disposal of SulphurContaminated Solid Wastes (May 1996)

These guidelines were developed by Alberta Environment to assist wastegenerators, landfill operators, and others handling sulphur contaminatedwastes to do so in an environmentally acceptable manner.

appendix 2

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Alberta Energy

Oil Sands Royalty Guidelines (1997) – Updated November 2006

The Alberta Oil Sands Royalty Guidelines provide a general understandingof the principles used to establish oil sands royalty legislation. They explainthe administrative policies used by the Department of Energy in interpretingthis legislation. They also explain the business rules and operating proceduresused when royalty-related legislation is applied.

Alberta Natural Gas Royalty Guidelines (2006)

These Guidelines are provided to give an understanding of the generalapplication and principles for determining Alberta’s Crown royalty share of gas and gas products, such as sulphur, produced from lands subject to a Crown lease agreement.

Application of the Regulation in specific situations may vary, andimplementation and practice of the Regulation may change withoutamending the Guidelines. This manual interprets the relevant energylegislation (statutes and regulations), and communicates policy decisionsmade, based on the legislation.

Energy Resources Conservation Board

ERCB General Bulletin 92-4 (March 10, 1992) and IL 84-11 (October 29, 1984)

The purpose of these documents is to provide the policy and requirementsfor sulphur storage in Alberta and thereby assist operators of sulphur-producing facilities with decisions regarding whether or not, where, and how they store produced sulphur. The bulletin does not contain any newrequirements, but brings the information to the attention of industry.

Storage Requirements for the Upstream Petroleum Industry(December 2001)

Directive 55 contains the ERCB storage requirements for the upstream oiland gas industry. It outlines the requirements for storage systems includingspecifications for liners. While it does not apply to sulphur storage, it doesapply to the storage of waste material including sulphur contaminated soil.

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Joint Regulations

Information Letter IL 96-7: ERCB/AEP Memorandum ofUnderstanding on the Regulation of Oil Sands Developments(April 18, 1996)

The Memorandum of Understanding outlines the coordinated regulatoryapproval process that will be followed for major oil sands projects thatrequire approvals under both the Oil Sands Conservation Act and theEnvironmental Protection and Enhancement Act. The memorandum statesthat Alberta Environment is responsible for ensuring that the storage ofthese materials does not result in significant environmental impacts, whilethe Energy Resources and Conservation Board is responsible for ensuringsulphur is stored so that future recovery is maximized. Furthermore theERCB has the primary decision-making authority regarding whether a projectis in the public interest (having regard for social, economic, and environmentaleffects of a project).

Municipalities

Strathcona County Municipal Development Plan (May 22, 2007)

The Municipal Development Plan provides comprehensive long-term (approximately a 20 year horizon) land use policy framework within whichpresent and projected growth and development may take place.

Strathcona County Land Use Bylaw (July 10, 2001)

This Land Use Bylaw regulates the use, conservation, and development of land, habitat, buildings, and signs in pursuit of the objectives ofStrathcona County’s statutory plans. These objectives are to maintain and enhance the quality of life by providing opportunities to attain individualand community aspirations; to conserve and enhance the environmentalquality in Strathcona County; and to foster planned, efficient, economical,and beneficial development that provides a diversity of choice, lifestyle, and environment.

Lamont County Municipal Development Plan (Bylaw 74/07)

The Municipal Development Plan provides policies to give the opportunityfor both industrial and residential development to occur while at the sametime conserving the agricultural base of the county. Such planned growthwill ensure that future generations will have a desirable place to live and work.

Lamont County Land Use Bylaw 675/07

The Land Use Bylaw is to regulate and control the use and development of land and buildings within the municipality to achieve the orderly andeconomic development of land.

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Natural Resources Conservation Board (NRCB)

Natural Resources Conservation Board Act (1990)

The purpose of the Natural Resources Conservation Board Act is to provide animpartial process to review the province’s non-energy projects that will or mayaffect the natural resources of Alberta in order to determine whether, in theBoard’s opinion, the projects are in the public interest. Reviews generally involvethe active participation of community residents, interest groups, governmentdepartments and municipal authorities, in addition to applicants. Approvals underthe Natural Resources Conservation Board Act must be authorized by the Albertacabinet and are in addition to licenses, permits or approvals required by otheracts, regulations, or by-laws.

Other

Potential Short and Long-term Sulphur Storage Options in Alberta –Final Report AMEC Earth & Environmental, (November 2004)

The report was prepared by AMEC under the direction of a committee withmembers from Alberta Environment, Alberta Energy and Resources ConservationBoard, Alberta Sulphur Producers, and industry. The report provides technicaladvice and discusses the advantages and disadvantages of various sulphurstorage options.

26

appendix 3

MAP OF THE INDUSTRIAL HEARTLAND

This framework sets out a vision,outcomes, andprinciples to improvethe management ofelemental sulphur now and in the future.

ISBN No. 978-0-7785-8557-2

For more information, or to order additional copies, contact:Alberta EnvironmentInformation CentreMain Floor, 9820 - 106 StreetEdmonton, AB T5K 2J6Toll-free: Dial 310-0000

and the phone numberTelephone: 780-427-2700www.environment.alberta.ca

This document is printed on chlorine-free papermade from 100 per cent post-consumer fibre. In choosing this paper, Alberta Environment saved11,734 litres of water, prevented 307 kilograms ofgreenhouse gas emissions, conserved 7 trees anddiverted 156 kilograms of waste from Alberta landfills.The paper was produced using wind power, whichprevented 159 kilograms of air emissions and savedthe use of 24 cubic metres of natural gas.