On January 30, 2017, Regina City Council approved an extension and renegotiation of the Western Potash agreement. The motion passed, with one against.
For a summary of the decision check out the Regina Leader Post coverage by Craig Baird. Here are some highlights from the article:
"The original agreement from 2012 had the city supplying Western Potash with effluent water from the wastewater treatment plant to run at its proposed mine near Milestone. The mine was expected to be up and running by now but the price of potash has fallen from $900 per tonne in 2008 to $200 today, delaying the project.
With the new pricing, Western Potash now wants to start with a pilot plant that will expand to a full-scale operation at a later date. Originally, 2.8 million tonnes of potash were to be processed per year, but 146,000 tonnes will be processed instead and it will use much less effluent water than originally planned. Construction of the plant is expected to begin later this year.
With the extension now in place, Western Potash has until June to pay the standby fee. The city will now negotiate a mutually beneficial amendment to the agreement to optimize the effluent reuse from the wastewater facilities of the city. Effluent water from the city would be used to flush out potash and dry it on the surface. Currently, effluent water goes into Wascana Creek after being treated."
I encourage residents to read the full report and motion.
What's missing from the article are the financial and environmental concerns raised by Councillors. For the record, I have confidence in Administration's ability to negotiate a deal that is in the City's best financial interest. Basically, a change in the contract is intended to enable the City to find new markets and customers for treated waste water, otherwise known as effluent. It's not sewage or poop, it's water. It's also a means of raising new sources of revenue for the City, which I support. But my questions focused on the implications of our success, namely the environmental impact. Let's take a look at the report:
1. Environmental Implications
This area of the Province has limited water resources; providing access to effluent for industrial use reduces the use of raw water from the water system. As well, by re-using effluent from the WWTP, less effluent enters Wascana Creek. An Environmental Assessment was completed by Western Potash and received Provincial approval in 2013.
2. Policy and/or Strategic Implications
The Administration’s recommendation to enter into renegotiating the agreement with WPC is consistent with the City’s Official Community Plan, as it will “minimize social and environmental impacts and improve the health and safety of the city and region”, OCP Health and Safety Goal #2. As well, it will “foster an environment conducive to economic vitality and competitiveness which supports the standard of living of residents in Regina and the surrounding region”, OCP Economic Development Goal #1.
The water here would be used for Western Canadian Potash's proposed Milestone mine project, which is still on the drawing board. With the collapse of potash prices the mine's future and timeline is uncertain, thus the renegotiation. In 2012 the City and Western were keen to develop this partnership, but recent developments suggest that the company is seeking lower cost options and may no longer require effluent, as outlined in a December 2016 report.
"Pilot Project water supply. Western has a previously negotiated an agreement with the City of Regina to use treated effluent for a 2.8 mtpy conventional solution mine.Although the Company maintains this agreement, the Pilot Project requires substantially less water volumes and construction of a pipeline to transport effluent to the site is not cost effective.MPC therefore intends to secure groundwater from a local deep well for the Pilot Project, which is below any potable or agriculture ground sources，and will not affect domestic or agricultural water safety."
The summary of my concerns were as follows:
1. Should Regina commodify water?
2. Should we commodify water for the purposes of solution mining?
3. As we commodify treated waste water, does this not create a disincentive to further improve the quality of the effluent?
4. To what extent does selling waste water align with OCP goal #1 and #2?
Since the meeting I have had a chance to discuss the water issue with local experts. We know that this corner of the province lacks surface water, but are we facing drought like conditions that should prohibit the selling of water? That's underdetermined and the environmental assessment of the project was given a green light for a reason. But when we are thinking of contracts with third parties that are +45 years, we might consider plugging environmental clauses into the relationships. If water tables drop and we suffer shortages, can we turn the taps off? What if treatment technology changes to such an extent that the effluent is near drinking quality? Should we still sell it? Are provincial water usage regulations sufficient? Should the City participate in solution based resource extraction? True, it might be better that Milestone use effluent over groundwater and other fresh water sources, but could solution mining itself be part of the problem?
These are the concerns that were going through my head when I voted against the motion. Otherwise, I have confidence in fellow Councillors and City staff who brought this issue before Council for a decision.
What should Council consider when it has a chance to review the renegotiated settlement in June of 2017? Let me know.