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Digging is done at Albian Sands, the mining operation portion of the Athabasca Oil Sands Project. The Jackpine mine is one of the two mines that make up Albian Sands.Dieter Blum

Federal and Alberta regulators have conditionally approved Royal Dutch Shell's multibillion-dollar Jackpine oil-sands mine expansion despite their findings that it would have a number of adverse environmental impacts.

A joint review panel, appointed by the federal Environment Minister and the provincial energy regulator, ruled that the project's effects on wildlife and vegetation will be significant, but that it is nonetheless in the public interest.

Alberta and Ottawa will now make their own determinations based on the findings, which come 5 1/2 years after Shell first applied to build the 100,000-barrel-a-day expansion. Shell's Athabasca Oil Sands Project currently produces 255,000 barrels a day.

The panel made 88 recommendations to governments and set out 22 conditions for Shell concerning mining, conservation, tailings management and other aspects.

In its decision, the review panel noted that the mine, 70 kilometres north of Fort McMurray, Alta., is surrounded by several other oil-sands projects, and that it will have positive economic benefits in Alberta and in the rest of the country. It said Alberta had identified bitumen mining as a "priority use" for the region.

However, the panel also said that the project would have numerous and varied ecological impacts both by itself and cumulatively with all the other development in the area, and that "weighed heavily" on its assessment.

"The panel finds that the project would likely have significant adverse environmental effects on wetlands, traditional plant potential areas, wetland-reliant species at risk, migratory birds that are wetland-reliant or species at risk, and biodiversity," the panel wrote. "There is also a lack of proposed mitigation measures that have been proven to be effective."

Shell said it was pleased with the green light and was reviewing the conditions and recommendations.

"Since 2007, we have strived to improve the public's understanding of the project through extensive consultation with people across the region and have submitted over 18,000 pages of information and evidence," Shell said in a statement.

Environmental groups were disappointed. Simon Dyer, policy director at the Pembina Institute, an environmental think tank, said Canada's reputation is being put further at risk as it keeps approving oil-sands projects in the absence of adequate rules for global warming or wetland protection.

"It's the same old stuff," Mr. Dyer said.

Follow Jeffrey Jones on Twitter: @the_Jeff_JonesOpens in a new window

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