REVIEW OF COMPONENTS OF THE RESOURCES VENTURES LIMITED SUPPLEMENTARY INFORMATION AND RESPONSE TO THE MIKISEW CREE STATEMENT OF CONCERN REGARDING THE KEARL PROJECT – MINE DEVELOPMENT

Prepared for:

Mikisew Cree First Nation (Mikisew Cree) Industrial Relations Council (IRC) Fort McMurray,

Prepared by:

Integrated Environments Ltd.

In Association with: DTC Consulting

October 2006

Supplementary Information Review Kearl Oil Sands Project

TABLE OF CONTENTS

1. Background ...... 2 2. Review Process...... 3 3. Environmental Management Systems ...... 4 4. Tailings Management...... 6 5. Liability and Closure Management ...... 7

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Supplementary Information Review Kearl Oil Sands Project

1. Background The Mikisew Cree First Nation (Mikisew Cree) has become increasingly concerned about the long-term effects of Oil Sands and other related developments in North-eastern Alberta. The Mikisew Cree have stated, and continue to state, these concerns directly to Industry and Government in private meetings, and at various regional forums. The reviews of several Oil Sands project Terms of Reference (TOR) and Environmental Impact Assessment (EIA) documents have focused on these concerns. The Mikisew Cree will continue to conduct these technical reviews in order to validate that Oil Sands Proponents’ supporting information and interpretations are reasonable and well founded. We will continue to provide comments on deficiencies and/or improvements for each regulatory application. While the above regulatory review approach is useful, the Mikisew Cree believe that there are significant concerns that are not fully addressed as part of the current review process. These relate to both project-specific and regional effects of oil sands mining and in-situ extraction on traditional ways of life and access to the land. Without a full understanding of these concerns and the consequences, the long-term impacts Oil Sands development cannot be defined in an adequate and relevant manner. Ensuring Aboriginal Standards are achieved in reclamation with the return of an acceptable and fully functional landscape is one of the cornerstones of the Mikisew Cree requirement for certainty. As currently stated in EIA applications, the Mikisew Cree believe that there is a real risk that such restoration will not occur. Equally, there is no guarantee that Oil Sands Proponents’ proposed reclamation plans will be achieved as stated. Not achieving these desired outcomes will ultimately result in environmental, cultural and social liabilities being transferred to the Mikisew Cree and future generations without proper recourse. Reclamation to the Aboriginal Standard must also be placed in a regional context that considers the cumulative effects of mining and in-situ extraction activities. Due to their nature, large oil sands mining projects, have a significant long-term impact on landscape integrity. The large-scale impacts of bitumen mining extraction are augmented by additional impacts of adjacent SAGD operations. These cumulative impacts of oil sands activities have been identified in numerous EIAs, but as of yet there is no effective management regime in place to assign responsibilities for the implementation of effective broad scale mitigation actions. The Mikisew Cree are concerned about long-term impacts to the land, air and water resulting from the cumulative effects of all Oil Sands related activities. This has not been adequately addressed to date on a project-by-project review basis, nor has government demonstrated an adequate and effective mechanism for cumulative effects management. Mikisew Cree have long indicated that a project terms of reference (TOR) is useful for all regulatory applications as a starting reference point. The continued challenge for the Mikisew Cree is to explain the First Nations’ perspective, one that stresses their key issues of concern. The Mikisew Cree wish to ensure that they fully understand the long-term

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Supplementary Information Review Kearl Oil Sands Project

consequences of Oil Sands development and likewise wish that their concerns are also fully understood by Governments, corporations and other Albertans.

The following is a response to Supplementary Information Request, subsequent to the Kearl Application and a response to the Mikisew Cree Statement of Concern.

2. Review Process The following review of the Supplementary Information Request has been prepared by Integrated Environments Ltd. (the Reviewer), under the direction of the Mikisew Cree Industry Relations Council (IRC). The comments expressed in this report are those of the Reviewer, unless otherwise denoted. We have reviewed the Supplemental Information provided by Imperial Oil Resources Ventures Limited (IOR) for the Kearl Mine Project in relation to comments on: • Environmental Management Systems, • Tailings Management, and • Liability and Closure Management

The reviewer’s comments on the Kearl Oil Sands Project Application were developed based on the viewpoints and concerns being expressed by the Mikisew regarding oil sands development. In that regard IOR needs to discuss with Mikisew the appropriateness of their responses specifically as these relate to Mikisew.

The reviewers note that many of the questions posed by Mikisew have not been addressed directly by IOR. The reviewers have posed these questions in an attempt to have the Mikisew concerns articulated in a fashion appropriate to IOR Corporate policies (as published) and to Alberta Environments regulatory obligations.

We encourage IOR to continue a dialogue and to discuss Mikisew’s viewpoints on these issues.

As the Kearl Project application relies on IOR’s initiatives and commitments we encourage Mikisew to seek IOR agreement to develop a binding commitment registry which is supported by Alberta Environment. Additionally we encourage Alberta Environment to increase transparency in the development of key policies and management strategies such as the present MLMP process. Such actions would provide further opportunities for Mikisew involvement in planning and decision making. This will assist all parties in managing projects risks and help to address everyone’s interests.

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Supplementary Information Review Kearl Oil Sands Project

3. Environmental Management Systems The Reviewer has examined the Supplemental Information provided to the Mikisew Cree and does not find any reference or response from Imperial Oil Resource Ventures Limited (IOR) to specific concerns raised by the Mikisew Cree regarding the proposed Environmental Management System for the Kearl Mine Project. The following documentation was reviewed: • Kearl Oil Sands Project – Mine Development. Supplemental Information • Kearl Oil Sands Project – Mine Development. Additional Supplemental Information • Kearl Oil Sands Project – Mine Development. Supplemental Information Appendices • Kearl Oil Sands Project – Mine Development. Responses to MCFN Statement of Concern In the original Statement of Concern, the Reviewer stated that…..The Environmental Management Plan does not provide details specific to the Kearl Oil Sands Project and is not consistent with ISO 14001 standards. The following information was requested from IOR: • Details specific to the Kearl Oils Sands Project – the EIA refers to IOR’s general safety, health and environmental management but does not provide the Mikisew Cree any assurance that specific socio-environmental effects arising from the project will be managed in such as way as to minimize impacts to First Nations lands and peoples. More specific details relating to the Project description and its environmental aspects as described in the EIA are required; • How the EMS/EMP is integrated with the environmental impact assessment and associated environmental and social risks. Little or no reference in the EIA is provided as to how this will be done; • Provide a conceptual schedule for implementation, including timelines; • Provide an organizational framework for the EMS, including responsibilities; • Identify socio-environmental risks and priorities arising from the EIA and identify options as to how they will be addressed; • Identify how socio-environmental risks are to be addressed by project phase – e.g. there is no reference as to how environmental management will be addressed in construction versus operations; • Provide budgets for the above. No written response to the above was provided to the Mikisew.

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Forward Looking Recommendations The Reviewer recognizes that environmental management is a process carried out throughout the Project life cycle and that complete details on the structure and organization of the Project EMS may not be completely available at the time of Application. However at this time, IOR should disclose to stakeholders their intent toward EMS implementation and provide a framework approach as to how this will be specifically undertaken for the Kearl Mine over the life of the project. As discussed in the Statement of Concern, this information was not provided in the Application. Best environmental management practice, as dictated by ISO 14001:2004 states that proponents should decide whether to communicate externally about its significant environmental aspects and if so establish and implement methods how this information is communicated to stakeholders. By seeking a Statement of Concern from the Mikisew Cree, it is evident that IOR has decided to communicate externally regarding the environmental aspects and related impacts of the Kearl Lake Project. On their website, Imperial Oil Resources affirms their commitment to maintaining a safe work environment enriched by diversity and characterized by open communication, trust and fair treatment. In regard to Management Systems, IOR commits to the following: We recognize the importance of dialogue with audiences that have an interest in our operations – including investors, customers, suppliers, employees, communities, governments and non-governmental organizations (NGOs) – and are committed to open and ongoing communication with these audience. This engagement enables us to increase our understanding of and present ideas on such matters as governance and social, environmental and energy issues. Listening to and learning from others enhances our decision making, strengthens our relationships, and helps us succeed as a business, which in turn enables us to make a strong contribution to . In conclusion, it is the opinion of the Reviewer that IOR has not responded in an adequate manner to the aforementioned questions about environmental management systems raised in the Mikisew Statement of Concern, consistent with the ISO 14001:2004 standard and their stated public commitment to corporate citizenship. The Reviewer recommends that the Mikisew Cree seek more information from IOR as to how they will manage the environmental aspects of the Kearl Project, specifically the following: • Provide a framework to the proposed EMS for the Kearl Mine project, its structure, content and organization; • How the proposed EMS is to be integrated with the Application and its documented management of environmental and social risks (environmental aspects); • How IOR will verify the implementation of its environmental and social commitments made in the Kearl Mine Project Application. It is recommended that IOR consider the

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establishment of a commitment registry to track the implementation of Application commitments. Additionally documentation of successful implementation should be provided to both regulators and stakeholders alike; • How the proposed EMS will be integrated with community based monitoring requirements of First Nations. The Mikisew should be consulted as to how the effects of the Project will be mitigated and how successful these mitigation efforts are. Furthermore, the Mikisew request involvement in an independent monitoring of the success of proposed mitigation measures in order to minimize project environmental and social impacts on the land and aboriginal way of life, and • That IOR commit to an ongoing dialogue with the Mikisew Cree as to the success of the Kearl Mine Project environmental and social management system, including summaries of external reviews and audits.

4. Tailings Management

Mikisew remain concerned regarding the ability of the Consolidated Tailings Technology (CT) to produce a landscape which allows traditional uses to occur unimpeded. The reviewer believes that IOR is making best efforts to understand and implement CT but is concerned that an open and peer reviewed research process in not available.

The reviewer has requested that IOR provide detailed technical data either published or unpublished including raw data to support IOR’s choice of this technology.

IOR has indicated that Syncrude and Suncor (Response 64) have accumulated large data sets and produced positive results for surface reclamation options. In offering certainty to Mikisew, the reviewer cannot comment on these results without assessing the raw data upon which these claims are made. IOR indicates it has supported tailings research at Syncrude for 20 years. CT technology is being put forward for most mining projects. For this reason, IOR should be willing to provide for public evaluation all background data upon which they are basing tailings assumptions.

IOR indicates that reclamation uncertainty remains; that no CT deposits have as yet been reclaimed. The reviewers are concerned that the long-term stability of CT presents uncertainties for final landscape design and management, including tailings dams and end pit lakes. This uncertainty increases uncertainty related to water quality, land capability and final land use scenarios.

IOR indicates that in a worst case scenario the implications of CT not meeting the on-spec targets would be to change to a different depositional technology yet to be developed. IOR should indicate what the management solution would be for CT type tailings already deposited. The IOR approach to this project scenario begs the following questions:

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• How long does IOR anticipate waiting to make a decision on this process issue? • Will the decision be based on Syncrude and Suncor data? • Does IOR anticipate making this decision based on Kearl Lake operational experience? • Would Kearl CT tailings then be reprocessed using this newly developed technology and does IOR consider this feasible based on the present CT knowledge base?

IOR indicates their tailings research has lead to significant advancements. IOR has no plans to continue research into dry landscape reclamation on CT deposits (response 76). With no proven reclamation scenarios yet in place, how does IOR intend to optimize the SFR to ensure both consolidation and dry landscape performance? Will IOR rely on Syncrude data and therefore be bound by the requirements placed on Syncrude?

5. Liability and Closure Management Answers to the concerns posed by Mikisew in their statement of concern were not provided by IOR in their Supplemental Information. There are however comments within the SIR which clarify technical aspects related to closure management.

Mikisew believes that IOR should answer the questions posed even if the answer is to pass responsibility for an issue to the government. In this regard Mikisew understands that certain issues must be addressed through policy and regulation.

In an August 31, 2006 meeting IOR presented the Mikisew and the reviewer a synopsis of IOR’s approach to liability management and reclamation security. The reviewer is of the opinion that increased government will be required to address Mikisew concerns.

The following comments are directed at clarifying the Mikisew’s concerns related to the Aug 31, 2006 presentation.

1) Imperial is dedicated to appropriate liability management over time using progressive reclamation and other sound operational practices

What is considered appropriate liability management by IOR may not address the concerns expressed by Mikisew in this regard. Appropriate may be what the general society is willing to accept. However Mikisew has specific concerns related to their location and land use. Appropriate liability management may be considered something different to Mikisew. Given the present uncertainties (response 64) Progressive Reclamation should be discussed in the context of Oilsands where end landscape

2) Imperial Oil completes regular field and facility liability estimates for upstream assets and incorporates new information into the estimate

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The concept of equivalent land capability being reestablished at oil sands mine sites is being questioned by Mikisew; this in context of restoring traditional land use and native plant communities. Has IOR requested information in this regard from Mikisew in order to incorporate new information into estimates for mine sites? The reviewer believes it may be more appropriate to use information from coal mine sites in developing estimates for oil sands. IOR in this context be relying on Syncrude and Suncor data and experience. In submissions at EUB hearings experts have brought into question the costs for progressive reclamation if restoration of traditional land use is required.

3) Imperial will learn from: a) Syncrude's experience b) Imperial's experience with remediation and reclamation of: well sites, batteries, plant sites and Green Zone reclamation in Cold Lake c) Imperial’s long operating history and solid foundation for such assessments and estimates d) ExxonMobil's worldwide experience e) Imperial and ExxonMobil's research capabilities f) Imperial's participation in CEMA and the associated research efforts and combined lessons learned from the oil sands industry

The reviewer believes IOR’s global experience and will be applied diligently. The reviewer believes that the information upon which IOR relies for liability evaluation is accurate and current. The reviewer in reflecting Mikisew concerns believes that IOR’s reliance on the Syncrude experience may resulting in an underestimation of the liability costs associated with remediation, reclamation and restoration of the Kearl Oil Sands mine site. The reviewer believes that achieving the landscapes and land uses described in the EIA including Traditional Land Uses may be represent a considerably higher liability than presently reflected by reclamation security deposits placed with Alberta Environment.

4) Accounting for Uncertainty a) There are unknowns in the final reclamation process for oil sands b) Liability assessments are based on the best knowledge available at the time c) Although there is some debate on certification endpoint, Imperial will base the estimate on the reclamation endpoint information provided in the EIA and consistent with current guidelines d) Potential changes to this endpoint will then be reflected as appropriate in the subsequent version of the liability estimate e) Regular updates to the liability estimates will account for different mine footprint, changing costs and reclamation requirements f) The reclamation security posting will be updated as required by AENV

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The reclamation endpoint in the Kearl EIA reflects the current belief that natural invasion of native plants will occur if the landforms can be put into a condition that support native species establishment. However the reviewer is of the opinion that although achievable, considerably greater effort will be required for reclamation and restoration than is presently anticipated. This effort will result in much higher costs and therefore greater residual liability than presently being represented by industry including IOR. The reviewer is of the opinion that AENV must reflect this uncertainty in the security posting required by oil sand operators.

5) AENV work on draft MLMP ongoing with industry input

Mikisew has requested involvement in the development process to ensure Aboriginal Standards are considered. Mikisew believe that given their priority land use position, their input should be solicited during this process. The reviewer is of the opinion that seeking Mikisew input during the development process would serve rather than hinder the MLMP development process.

6) There are no plans or expectations to have a fenced area in the final reclaimed landscape

Will all areas of the site be accessible, suitable and fit for Traditional Land Use?

7) Post Closure a) Imperial will meet its post closure monitoring obligations b) In general the site reclamation strategy will result in a landscape that is designed to be self-sustaining c) Imperial expects to maintain access to the site for the following: i) Complete any site reclamation and remediation required for certification ii) Maintain reclaimed sites to certification iii) Maintain monitoring and pumping as required around the tailings area iv) Monitor the landfill to regulatory closure as required d) Monitoring will continue until an acceptable regulatory endpoint is reached

Mikisew has expressed the concern that mine sites will be industrial facilities which require perpetual maintenance. The reviewer is of the opinion that the approach provide by IOR is a very clear statement of uncertainty. IOR appears to anticipate the need for some or a number of perpetual maintenance requirements. Does IOR anticipate any of these requirements limiting their ability to obtain reclamation certification? Does AENV anticipate providing reclamation certification while these activities are ongoing?

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