Posted on June 16, 2020
DURING the height of the global pandemic, Canadian Premium Sand (CPS) released its Plan B for its proposed frac-sand mine and processing facility on the east side of Lake Winnipeg. Quite frankly, Plan B is even worse than its original plan.
In a late-March press release, CPS announced that its new preliminary feasibility study had “a revised capital cost of C$124 million before contingency, including C$8 million in expected short-line rail infrastructure upgrades north of Winnipeg, representing a dramatic improvement from the previous estimated capital cost of C$204 million.”
How did CPS come to save $80 million dollars, by its own estimation?
First, it has done away with the construction of the processing facility that was to have been constructed at the mine site location. This means almost all the promised local jobs have been eliminated. Also gone are the trucking jobs that would have been needed to transport one million tonnes of processed frac sand annually to a Winnipeg transload facility.
Instead, CPS now wants to move one million tonnes of raw, wet frac sand from its proposed rip-and-strip mine operation, located near Hollow Water First Nation, a three-hour drive northeast of Winnipeg, and barge the frac sand across Lake Winnipeg to somewhere on the west side.
This raw frac sand would then be unloaded from a yet-to-be-disclosed docking facility near Dunnottar, to be processed at a facility to be constructed close to the existing rail line and to the barge docking facility. From there, the frac sand would be transported to market by rail.
I am sure those who live full-time or seasonally on the west side of Lake Winnipeg near Dunnottar will not be happy at the prospect of having hundreds of truckloads of frac sand going to and from the barge docking location to the frac-sand processing facility during prime cottage season. Surely that would have an effect on property values.
Along with traffic issues, residents in the area might also be concerned with the proposed stockpiles of processed frac sand stored outside at the CPS processing facility, which could cause silicosis with long-term exposure.
CPS will also need a docking facility at Seymourville, close to where its mine will be located, where I suspect they will have to stockpile large volumes of frac sand before it is barged over to the west side of the lake. This no doubt will cause concern for people living in Seymourville.
In order to move one million tonnes of frac sand via barge from the east to the west side of the lake, CPS stated it would need a 4,700-tonne payload barge with a 2,000-horsepower pusher to move the barge. CPS would need to employ two of these 86-x-16-metre barges, each having a four-metre draft when fully loaded, going twice a day every day until freeze up in order to move one million tonnes of frac sand.
CPS states they would contract these barges from a Burlington, Ont.-based marine company. How that company will get them to Manitoba, and where they will winter them in Manitoba, is not answered in CPS’s updated preliminary feasibility study.
Another issue arises from an examination of marine charts for Lake Winnipeg. The waters in and around Dunnottar are far too shallow to accommodate barges with a four-metre draft when fully loaded, so unless CPS plans to dredge the waters in the area on a regular basis, it is not clear how it could dock these monster barges.
CPS received its environmental licence from the province to proceed to the production phase back in May 2019. It is set to expire in May 2022. The licence contains more than 90 conditions that must be met before CPS goes into full operation. A full year has now passed since CPS was issued its licence, and not one of those conditions has been met.
In fact, CPS has yet to make a final investment decision to proceed to the production phase of its proposed development.
The company has also stated it will not be ready to proceed to production until sometime in 2022, when its environmental licence is set to expire. CPS would then need both to submit a notice of alteration to its existing environmental licence to proceed before it expires, and secure approval of this new plan from the province.
CPS will also need a number of federal permits as well for its new proposal, as Lake Winnipeg is a federally regulated body of water with a thriving commercial fishing economy.
Before anything can happen, however, CPS needs to convince potential investors to cough up at least $124 million, if not more, to get this project into production. Given that we are now at the beginning of a global economic depression that some economists say could last a decade, and with shale oil and gas exploration all but dead in North America for the foreseeable future, there is very little appetite for frac sand or for investors to invest in a risky frac-sand venture.
CPS should pull up stakes now and take its losses. Failing that, What The Frack Manitoba will be keeping a very close eye on how this development unfolds, to ensure both CPS and the province are held accountable.
Don Sullivan is a landscape photographer, former director of the Boreal Forest Network and served as special adviser to the government of Manitoba on the Pimachiowin Aki UNESCO World Heritage site portfolio. He is a research affiliate with the Canadian Centre for Policy Alternatives – Manitoba.
Source: winnipegfreepress
