3.0 The joint AENV-DFO water management framework

ALBERTA ENVIRONMENT
FISHERIES AND OCEANS CANADA
WATER MANAGEMENT FRAMEWORK:
INSTREAM FLOW NEEDS AND WATER MANAGEMENT SYSTEM
FOR THE LOWER ATHABASCA RIVER

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The goal of the Framework is to minimize risk to the aquatic ecosystem while balancing water requirements for human use. The Framework was developed following certain principles:

1. Minimize risk to the aquatic ecosystem by providing a high level of protection supported by appropriate research, monitoring, habitat compensation, and mitigation where required.
2. Provide greater protection for sensitive periods relative to less sensitive periods.
3. Provide for adequate operational withdrawals and enough time for industry to build the required infrastructure and develop new operating procedures if a more stringent management system is required.
4. Establish a water management system that is adaptive to new information with an open process for incorporating changes on a defined schedule.
5. Allow flexibility to issue limited approvals to deal with short-term "upset conditions" (including emergencies or other situations that require a change in operations). A process for evaluating temporary approvals and associated compensation requirements will be delivered early in Phase 2.

Current ecological thought on IFN indicates that natural processes are maintained by minimizing changes in the natural flow pattern so that variability of flows within and between years, is maintained. Referred to as the natural flow paradigm, maintenance of seasonal flow magnitude, frequency, timing and duration should create conditions that are generally protective of aquatic ecosystems (Golder 2004, Poff et al. 1997). While the maintenance of natural hydrologic patterns may provide some protection of natural ecosystem processes, this concept does not tell us how much water the river requires to maintain its natural character or, in other words, how much water we can remove while maintaining the natural aquatic ecosystem. Better understanding of the effects of reduced flow on aquatic ecosystems is needed to make these decisions. Therefore, appropriate monitoring programs need to be designed and implemented, and the effects of reduced flows need to be identified and investigated, especially given the increasing demand for water use.

AENV and DFO are recommending a precautionary approach, implemented in phases with ongoing review, so that monitoring which improves the understanding of the effects of water withdrawals can be incorporated in a water management system that will protect the ecological integrity of the aquatic ecosystem of the lower Athabasca River.

3.1 Description of Framework Phases

3.1.1 Phase 1 of the Water Management Framework (September 2006 to September 30, 2010)

Table 1 presents the Phase 1 Water Management Framework. Three management zones (green, yellow and red) have been designated to manage the increasing risk of impacts as river flows decrease. These zones are defined by the flow conditions within the river. Maximum withdrawals for each management zone have been established that are increasingly restrictive, according to the increasing risk to the aquatic ecosystem.

Table 1. The Phase 1 Water Management Framework

Flow Condition/ Season	Environmental Implication	Management Action
When River Flow is Above the Cautionary Threshold (CT) - Maximum of HDA80 or Q90 Green	Flows are sufficient-impacts to aquatic ecosystem are negligible.	All licensees operate normally and operate within the conditions of their licences. Maximum cumulative withdrawal is 15% of instantaneous flow. Not likely to result in impacts to fish habitat, not likely to require a Fisheries Act Authorization (See Section 3.3 for details)
When River Flow is Below the CT - Maximum of HDA80 or Q90 but Above Q95 Yellow	Natural low flows occurring. Assume aquatic ecosystem may experience stress from a 15% withdrawal	Total cumulative diversion rate is 10% of the average of the HDA80 and Q95. Maximum cumulative withdrawals: Winter = 15 m3/s, Spawning = 5% of the HDA80 flow or 34 m3/s, whichever is less, Summer = 34 m3/s. Recent and new licences will include conditions that mandate incremental reductions. Is likely to result in impacts to fish habitat and may require a Fisheries Act Authorization (See Section 3.3 for details)
When River Flow is Below Q95 Red	Natural low flows may limit habitat availability. Increased duration and frequency of habitat loss due to water withdrawals should be minimized	Mandatory reductions and use of storage. Total cumulative diversion rate is 5.2% of historical median flow in each week. Maximum cumulative withdrawals: Winter = 15 m3/s, Spawning = 5% of the HDA80 flow or 34 m3/s, whichever is less, Summer = 34 m3/s. Applies to all licences in a variety of ways. Is likely to result in impacts to fish habitat and may require a Fisheries Act Authorization (See Section 3.3 for details)

Note: Definitions of terms used in this table can be found in Section 4.0

In all cases in Phase 1, when a withdrawal for a given flow condition results in the Athabasca River dropping down to a lower flow condition, the management action applied will be that of the lower flow condition. For example, if the river was 1 m³/s above the CT and therefore still in the green zone, the yellow condition restrictions would take effect if total withdrawals were greater than 1 m³/s.

The Green Management Zone - water availability is sufficient

Most of the time, there is enough flow in the River to meet environmental and human needs. In this zone water flow is sufficient, therefore up to 15% of the instantaneous flow in the river will be available for industry use. This 15% maximum cumulative diversion rate was determined by applying the chronic (long-term), intermediate and acute (short-term) metrics developed for the South Saskatchewan River Basin (SSRB¹) to the most sensitive fish life stage and reach in the lower Athabasca River (see Appendix 3 for details).

The Yellow Management Zone - Cautionary Threshold

The IFN for the Athabasca River identifies a threshold, which the Phase 1 Framework has used as a Cautionary Threshold (CT). This threshold is defined by flows corresponding to the 80% habitat area exceedence. Habitat area values below this level occur 20 percent of the time.

• A target of 10% of instantaneous flow was determined as a protective level of withdrawal during yellow conditions. For ease of implementation, the maximum withdrawal has been pre-calculated as 10% of the average of the HDA80 flow and the Q95, which historically through winter weeks is within +/- 1 m³/s of the instantaneous values. The weekly values are presented in Table 5.
• Maximum withdrawal caps have been implemented for flows during yellow conditions allowing no more than 15 m³/s (winter) to a maximum of 34 m³/s (spawning and summer).

The Red Management Zone - Potential Sustainability Threshold

The Framework identifies a Potential Sustainability Threshold (PST) that is consistent with the thresholds where the ecosystem is expected to experience significant change, according to international contributions to IFN determination (e.g. Hardy 2005). The PST is defined by the 95% flow exceedence. Flows below this value occur five percent of the time. Details for establishing both the CT and the PST are presented in Appendix 3.

• A target for maximum withdrawals of 5.2% of historical median flow in each week has been adopted to ensure the sustainability of the aquatic ecosystem is not threatened.
• Maximum withdrawal caps have also been implemented for flows during red conditions allowing no more than 15 m³/s (winter) to a maximum of 34 m³/s (spawning and summer).

Allowance For Dynamic Ice Behaviour

Due to substantial stakeholder concern, the draft recommendations (AENV January 2006) for relaxed thresholds during ice formation and break-up have been removed.

1. Instream Flow Needs Determinations for the South Saskatchewan River Basin, Alberta, Canada (Dec. 2003), available on-line at: http://www3.gov.ab.ca/env/water/regions/ ssrb/IFN_reports.asp

3.1.2 Phase 1 Effects On Modeled Habitat Availability

The amount of habitat loss under Phase 1 is shown in Table 2 and contrasted with habitat loss using an accepted IFN method that fully protects the lowest flows. In Table 2, both the IFN and Phase 1 result in habitat losses from natural flow conditions. Phase 1 minimizes losses as far as is possible, balancing the current understanding of infrastructure constraints and water needs with low additional risks to the aquatic ecosystem. These habitat losses at low flow during Phase 1 are believed to be a small risk in the near-term. Continued monitoring will be used to better characterize these risks.

Table 2. Comparison of habitat losses (%) from Natural for an IFN and for the Phase 1 Framework.

3.1.3 The Phase 2 (Long-term) Water Management Framework Process

A water management regime for the Framework is based on the concept that the aquatic ecosystem of the lower Athabasca River and its associated fisheries will be protected. The Framework will undergo review and modification in Phase 2 as ecosystem knowledge improves and socio-economic considerations are taken into account. Phase 2 will continue to provide a high level of protection for the lower Athabasca River while evaluating water management options and our understanding of the complex ecosystem, through western science and traditional knowledge. Phase 2 also provides a process for incorporating an adaptive management approach based on new information, and improvement in the Framework where required. As previously stated, current IFN methods suggest that a more restrictive withdrawal regime may be required during sensitive time periods and flows to achieve protection in Phase 2 with greater water withdrawals.

The specific details of the Phase 2 process will be determined through consultation with regional stakeholders in 2007 (see Table 3).

Table 3. Phase 2 Timelines.

Activity	Completion Date	Regulatory Backstop Deadline
Workplans for Habitat Requirements Group (including plan for addressing Ecosystem Base Flow), Water Requirements Group Engineering/Procedural Requirements and Socio-economic Group	January 1, 2007	March 31, 2007
Industry integrated water management plan for implementing Phase 1	January 31, 2007	May 31, 2007
Consultation on Phase 2 Process	July 1, 2007	October 31, 2007
Collection and Review of information; develop Phase 2 Framework and Implementation plan	July 1, 2009	October 31, 2009
Final Consultation on Phase 2 Framework and Implementation Plan	June 30, 2010	August 1, 2010
Begin Implementation	September 30, 2010

If stakeholders cannot agree on the path forward by the deadline dates, the regulators (DFO and AENV) will make the required decisions by the regulatory backstop dates indicated in Table 3.

As more science and traditional knowledge is collected, the assumptions used to develop Phase 1 will be verified, and information on four key areas – water requirements, habitat requirements, engineering requirements and water resource values will be incorporated. Water requirements include determining how much water is used for normal operation, now and in the future. It does not include emergency requirements. Habitat requirements will include gathering of information to better determine what the Athabasca River requires to ensure that its aquatic environment is maintained during oilsands operation. Engineering requirements will include gathering of technical and economic information to determine what mitigation is most feasible for industry. Water resource values will address the importance of the water to all users.

In Alberta's Draft Framework (January 2006), there was a recognition that some level of low flow could occur in the Athabasca River where water withdrawals for industry would effectively stop. This level of flow is typically referred to as the ecosystem base flow (EBF). Research will be directed towards addressing the definition of an EBF in Phase 2.

Phase 2 development and implementation will include, but not be limited to:

• Development of monitoring program(s) to test if changes occur and provide for further implementation of IFN metrics/ methods
• Development of research program(s) to test the assumptions and new hypotheses of IFN for the Athabasca River
• Developing an understanding of technical solutions for water use including enhanced efficiency and reduction in inventory in tailings material
• Acquisition of socio-economic information and cost-benefit analyses
• Consultation and Review

Activities that are already underway or that are expected to begin, in support the Framework, include:

1) Assessment of Routine Operation Water Requirements – Led by industry

• Determine existing (2005) water use.
• Determine planned water use.
• Estimate undisclosed water requirements.
• Identify non-routine water requirements that may be a concern – e.g., are time-sensitive.

2) Assessment of Habitat Requirements - Led by regulators

• Investigate improvements in habitat modelling and complete modeling for all reaches of the lower Athabasca River.
• Develop a better understanding of relationships between instream water availability (river flow) and aquatic ecosystem requirements (e.g. habitat).
• Develop a monitoring program that detects fish population response to changes in river flow and other industrial developments in the lower Athabasca River.

3) Assessment of Engineering/Procedural Requirements – Led by industry

• Develop a complete assessment of mitigation alternatives.
• Address technical issues associated with their implementation.
• Provide a cost/benefit analysis of mitigation alternatives.

4) Assessment of Water Resource Values/Socio-Economic Assessment – Led by multi-stakeholder group (e.g. WPAC or CEMA)

The assessment of social, traditional, recreational and commercial values of the Athabasca River have been on-going for decades with respect to oil sands development. However, these have largely been in relation to project specific outcomes and a comprehensive assessment with respect to water allocations is considered to be the most poorly developed of the four topics listed here. An appropriate lead for synthesizing existing studies and embarking on a specific understanding with respect to water allocations has not yet been identified.

Each working group is responsible for completing their workplan by January 31, 2007. The workplans should include deliverables, proposed budget, and timelines for completion of work by the Framework deadline of July 1, 2009.

Development of Monitoring and Research programs

The Framework was chosen recognizing the substantial complexity in directly equating low river discharge with impacts on the aquatic ecosystem. Definitive relationships between low flow rates and impacts do not exist for the lower Athabasca River and are rare in the international scientific literature, particularly for large rivers like the Athabasca River. Thus, the Phase 1 Framework has defined zones of risk (green, yellow, red) that are approximations of protective targets for the maintenance of in-stream flow needs. Within these zones, the framework has identified withdrawal rates that are believed to limit the risk to acceptable levels. However, these risks are acceptable under the understanding that strong research and monitoring programs are in place to support adaptive management.

The Framework has adopted protective targets on the assumption that habitat is limiting under all flow conditions. However, the withdrawals permitted under the Framework are not risk-free. Because some level of risk is inherent in allowing even limited withdrawals at low natural flows, strong research and monitoring programs must be designed immediately with the goals of relating flow and habitat conditions with biotic success and sustainability. Suitable indices of biotic health and sustainability, and of ecosystem health in general must also be identified.

1. Monitoring program: A monitoring program, such as the Regional Aquatics Monitoring Program (RAMP), should be augmented to adequately detect change in fish populations due to loss of habitat and connectivity. The monitoring program should be open to external review by river ecosystem and fisheries specialists. Data should be available to the public, an expert panel should review the monitoring program regularly, and changes deemed necessary to accomplish the objective of detecting change and supporting basic research should be incorporated.
2. Research: Research should be conducted to reduce uncertainties in IFN determination for the lower Athabasca River. Uncertainties should be identified by a group such as the CEMA - Surface Water Working Group (SWWG), reviewed by stakeholders, and used to develop research projects with river ecosystem and fish experts to reduce these key uncertainties.

Develop technical solutions

There are many potential methods for meeting the future water demands of the Wood Buffalo region. For oilsands, enhancing the efficiency of water use is by far the most attractive as it reduces withdrawals at the same time as reducing the amount of water stored in tailings. Water stored in tailings may represent the most pressing environmental liability in this region and this can be addressed by enhancing the efficiency of water use, and finding ways to either recycle or treat and discharge these waters. Off-stream storage, one potential solution to alleviate water shortages in the winter only increases the pressure on summer weeks, reduces the need to find water efficiency solutions and relocates environmental liability to the storage site while not addressing the future liability of tailings water.

Alberta Environment and DFO requested that oil sands developers provide an outline of initiatives that would support the goal of reducing the impacts of water requirements on the Athabasca River. An industry workshop, with attendance from water management experts for the mining operations, was held on May 11, 2006 to develop an inclusive list of water management options. This list of initiatives will form the basis for investigation of feasibility, benefit, practicality and cost and have been broadly categorized into:

• Integrated water management
• Technological/operational improvements
• Education/awareness
• Habitat loss and mitigation technical improvements

The process for delivering a recommendation on best practices and management options to meet industrial water needs has formally begun. It is important to note that a considerable amount of existing and planned technological/operational improvement related research is currently underway by the oil sands industry largely directed through the Canadian Oil Sands Network for Research and Development (CONRAD). As large research efforts are already underway, it is expected that new information on innovations will be available in the near future.

With respect to the integrated water management component, AENV and DFO have requested a recommendation on implementing Phase 1 from industry by January 2007.

Acquisition of socio-economic information and cost-benefit analyses

The Framework does not adequately include socio-economic considerations in the Phase 1 implementation. However, both AENV and DFO are bound by regulatory requirements to include socio-economic considerations. Socio-economic assessment of balancing water needs, environmental impacts of those needs and the environmental and social costs of mitigative/ management options is essential in developing Phase 2. The appropriate forum for initiating a socio-economic assessment may be through a combination of Watershed Stewardship Groups (WSG) and a Watershed Planning and Advisory Committee (WPAC) for the lower Athabasca River as outlined in Alberta's Water Strategy.

Consultation and Review

Critical to the successful adaptation to a Phase 2 Framework and its potential evolution into an approved Water Management Plan is the consultation and review process. Consultation and review will continue on an as requested basis until a formal process is established.

An overview of the timelines for the Phase 2 process are presented in Table 3. There will be a number of decision points and sub-timelines within this broad overview. At all times, AENV and DFO will be prepared to backstop the process to ensure the schedule remains on track.

3.2 Implementation of the Framework

3.2.1 Area of the Framework

The Framework will guide regulatory decision-making in upcoming applications and will provide a challenge to adaptive and cooperative management principles. The Framework will be adapted as needed based on further knowledge. Reaches 4 and 5 of the lower Athabasca River are in the area of increasing oil sands and industry activity (Figure 1) but, based on current knowledge, Reach 3 contains spawning habitat and appears to be more sensitive to withdrawals. Reach 5 begins slightly downstream of Fort McMurray and ends upstream of the confluence with the Steepbank River. Reach 4 is downstream of Reach 5, ending upstream of the confluence with the Firebag River. Reach 3 is downstream of Reach 4, ending upstream of the confluence with the Embarras River.

Figure 1. Athabasca River Instream Flow Needs Reach (Segment) Boundaries.

Reaches 4 and 5 have each been assigned two Framework values for each week of the year. These values separate the green-yellow Cautionary Threshold (CT - HDA80 flow) and the yellow-red Potential Sustainability Threshold (PST - Q95) condition boundaries (Table 4).

3.2.2 Phase 1 Flow Boundaries and Withdrawal Restrictions

Instantaneous flows for applying the Framework will be determined as follows:

• Reach 5: Daily recorded flows at the Athabasca River gauge below Fort McMurray.
• Reach 4: The sum of daily flows from the Athabasca River gauge below Fort McMurray and the gauge at the mouth of the Steepbank River.

Table 4. Phase 1 Values (m³/s) for defining green-yellow and yellow-red boundaries on a weekly basis.

• Yellow is defined by an amount of habitat loss which is specific to the reach for which it was calculated and is therefore not comparable between reaches.
• Red is defined by flow and should be comparable between reaches except during weeks of rapidly changing flow when numbers can be lower in Reach 4. This occurs in week 35 (Aug 27), when late summer precipitation consistently causes a rapid but short-lived increase in flow.

Table 5: Phase 1 maximum withdrawal in Reach 4 for each week

3.2.3 Short-Term AENV Diversion Licences

Companies may encounter unforeseen complications that require more water than planned. Collectively these are termed "upset conditions" and include emergencies or other situations that require changes in operations. Under these conditions, short-term diversion licences may be granted on a case specific basis. Guidelines for the review of short-term diversion licence applications, their longevity and levels of "Best Management Practices" while operating under a short-term diversion licence will be developed early in the Phase 2 process.

3.2.4 Proposed Implementation Methods for Phase 1

While current oilsands water use has generally been below the most stringent limits identified within the Phase 1 Framework, current licences have allowed for maximum amounts that could cumulatively exceed them. Further project development will add to the cumulative demands that are now subject to the Phase 1 limits. Water sharing or other water management options will be required to meet Phase 1 limits. The first licensed additional withdrawal will be by Canadian Natural Resources Limited in mid-2007. The Phase 1 Framework addresses cumulative withdrawals and recognizes that each company has a different capacity to deal with restrictions in water availability. AENV and DFO have directed industry to provide a plan to implement this framework by January 2007 in regards to water sharing generally and with respect to meeting the restrictions imposed by Phase 1. Pending this recommended implementation plan, the following text provides an initial view on how water sharing might occur while recognizing that the final recommendation may be different:

• Senior (Syncrude, Suncor), recent (Albian, CNRL, Shell, UTS) and new licence holders will not be impacted in green conditions given current and projected allocations.
• During yellow conditions, the Phase 1 (Table 1) cumulative maximum withdrawal criteria will be met. All licence holders will implement water use efficiencies that limit their withdrawals. All license holders will contribute to monitoring for adaptive management and monitoring programs will be implemented.
• During red conditions, the Phase 1 (Table 1) cumulative maximum withdrawal criteria will be met. Oil sands water users are currently developing a plan for allocating restricted water availability among licence holders. The industry developed plan has been requested by January 2007.

AENV is currently evaluating restrictions, as a percent of average annual allocation for each licence holder, as one method to meet the Framework should industry fail to deliver a working implementation plan by January 2007. In consultation with industry, a draft conceptual plan has been established that balances existing and proposed licensed withdrawal rates, allocations and the full utilization of on-site water storage capacity to meet the red-zone restriction during the worst years on record. This draft is currently being reviewed for accuracy, and a more detailed water balance accounting by AENV is underway. If this backstop approach is required, it will be open for review in early 2007.

3.3 Fisheries Act (Canada) Section 35(2) Authorization Requirements under the Phase 1 Framework

The Framework specifies water diversion limits that industry will be expected to meet. The proposed limits will minimize the harmful alteration of fish habitat to levels expected to maintain healthy and productive fish habitat and fisheries. However there will likely be some reduction in fish habitat from natural levels. Section 35 of the Fisheries Act prohibits the harmful alteration disruption or destruction (HADD) of fish habitat unless authorized by the Minister of Fisheries and Oceans (DFO). A reduction in the amount of fish habitat due to flow diversion could be considered a harmful alteration and may require authorization under the federal Fisheries Act. According to DFO's Policy for the Management of Fish Habitat, no such authorizations are issued where the HADD is unacceptable. Where the HADD is considered acceptable in the circumstances, habitat compensation for the habitat loss will be required.

Based on DFO's best current information, the Athabasca River IFN defines the river flows below which diversions could result in impacts to fish habitat and would therefore require authorization under S.35(2) of the Fisheries Act. Diversions that do not reduce flows to levels below the IFN would not be expected to result in impacts to fish habitat. Water diversions will be evaluated based on their expected diversions above and below the IFN, and authorizations or authorization amendments will be issued as appropriate. The paragraphs below outline likely Fisheries Act authorization requirements for oilsands projects under the Framework.

Existing Water Withdrawals

Since Syncrude and Suncor obtained licences to withdraw water from the Athabasca River prior to the implementation of the habitat provisions of the Fisheries Act they did not require Fisheries Act authorizations. However, any future change in operations that results in increased impacts on fish and fish habitat is subject to current legislation and may result in the requirement of a Fisheries Act authorization. As indicated above, based on current instream flow modelling and current scientific understanding, increased impacts to fish habitat are likely to occur if current diversion rates reduce the Athabasca River flows below the IFN (i.e., in the yellow or red zone according to the Phase 1 recommendation).

Previously Authorized Projects

The Albian Sands withdrawal is authorized under the Fisheries Act. There are specific conditions in the authorization dealing with diversion rates (maximum diversion of 4.17 m³/s, or 1.8% of river flow, whichever is lower). Any increase in Albian Sands water withdrawals that exceed the existing authorization when flows are below the IFN would likely require a new Fisheries Act authorization or an amendment of the existing authorization.

New Projects

Water withdrawals from the Athabasca River by future oilsands projects may require Fisheries Act authorization if withdrawals are expected to reduce the instantaneous river flow below the IFN.

Authorization Conditions

Each Fisheries Act authorization will include mitigation, monitoring and fish habitat compensation conditions that the proponent will be required to develop and implement. Required monitoring will likely include: reporting on water withdrawals and river flows; monitoring of fish habitat impacts as a result of flow change; completion of instream flow and habitat modelling studies; and monitoring of habitat compensation works. Letters of credit may be required, and would be expected to be adequate to complete monitoring and compensation conditions of the Authorization.

Authorization Expiry

Any Fisheries Act authorizations issued during Phase 1 will be subject to review and appropriate action by DFO to ensure consistency with the Framework post-2010. New authorizations or authorization amendments may be issued at that time for each project as required, incorporating any changes coming out of the Phase 2 process. DFO will work with AENV to coordinate the respective regulatory processes to the greatest degree possible.