Inside an Australian Miner’s Brawl with Alberta Regulators

When the Alberta Energy Regulator asked an Australian coal prospector to improve selenium monitoring and uphold the law at a proposed mining site, the firm’s CEO not only refused but threatened to sue individual members of the agency.

At one contentious meeting the executive compared dealing with the regulator to being examined by a “meddling” proctologist.

Documents obtained by The Tyee show that Peter Doyle, then CEO of Montem Resources, not only fought a request to establish monitoring for the fish-killing toxin and water pollutant at Tent Mountain, but entered into a two-year-long dispute process with the regulator.

Montem is also one of several Australian companies suing the United Conservative Party government for alleged damages totalling $15 billion after the government placed a moratorium on coal development in the Rockies in 2022.

After the lawsuits were filed, the province quietly rescinded the moratorium this year and opened up the Rockies to foreign coal speculators.

But as a 256-page collection of Alberta Energy Regulator documents, briefing notes and correspondence related to the dispute under the title “Record of the Decision Maker” shows, Alberta regulations and decisions made in the public interest were constantly challenged by Australian coal speculators long before the lawsuits.

“The tone and language of contempt articulated in the document... is shocking and disturbing,” noted William Donahue, an environmental scientist who formerly served as chief monitoring officer and executive director of science in Alberta’s Environmental Monitoring and Science Division.

“It pulls back the whole curtain on how government and industry view regulation, especially when it concerns selenium, and it makes a farce of the idea that there is functional independent regulation of the coal industry in Alberta.”

The Tyee reached out to Doyle for comment and has not received a response.

High selenium levels

Selenium is one of several toxic contaminants created by open-pit coal mining in the Canadian Rockies.

The mineral, along with other heavy metals and nitrates, seeps from crushed rock piles and then fouls waterways, where it poses a threat to fish, public health and water security.

The Alberta government has documented that even after they are shut down, coal mines continue to release contaminants into waterways for decades. Even mines reclaimed to regulatory standards continue to leach selenium.

The dispute between the Alberta Energy Regulator, or AER, and Montem Resources began shortly after the company announced plans to reopen a legacy coal mine in the Crowsnest Pass.

In 2020 Montem Resources, then a penny stock listed on the Australian Securities Exchange, applied to the regulator to reactivate Tent Mountain, a coal mine that had been closed since 1983.

The abandoned mine, scarred with old pits, crushed rock piles and settling ponds, straddles the British Columbia and Alberta border south of Crowsnest Pass. It had been leaching selenium and heavy metals into the local watershed for years.

Yet as the Alberta Wilderness Association noted in a 2021 letter to federal officials, Montem suggested that the abandoned mine site didn’t need a new environmental impact assessment, or EIA, because a study completed 47 years ago adequately described the kind of mining Montem wanted to do — which “had not changed significantly in nature.”

The company also told investors that it planned to ship hard coking coal to Asia as early as 2022. Coking coal is used in iron and steel production.

However, the AER and the federal government disagreed with Montem’s position that the old assessment still applied.

The federal government ordered an impact review while the AER told the company in January 2021 that it needed a new study. “In the absence of a current EIA report, the AER cannot know whether consequences from the activities proposed in this project can be predicted and the impacts can be addressed.”

Shortly afterwards, in June 2021, the AER learned that water monitoring performed by Alberta Environment had found “elevated levels of selenium in Crowsnest Creek downstream of the Tent Mountain site.”

Concentrations at a settling pond below Tent Mountain were found to be 151 micrograms per litre. The Alberta environmental limit for aquatic protection remains two micrograms per litre. The federal guideline is one microgram per litre.

Selenium pollution can affect the behaviour and development of fish, resulting in deformations, cancers, reproductive failure and extinctions.

An AER briefing note also said the findings posed “reputational risk issues to the AER and towards AEP [Alberta Environment and Parks] or others should information on the elevated selenium levels become public prior to AER actions on this matter.”

Lorne Fitch, a retired fishery biologist for the Alberta government, confirmed to The Tyee that after 40 years of blasting overburden at Tent Mountain had leached selenium and sediment into Crowsnest Creek and East Crowsnest Creek, cutthroat trout no longer existed in those waterways.

“Their disappearance was confirmed with environmental DNA sampling in 2020,” said Fitch. In the 1980s the biologist regularly inspected the damaged watershed and often found creeks blackened by coal dust.

“It’s abundantly clear,” added Fitch, “that coal mines and trout cannot coexist. When coal mining starts, fish eventually disappear, especially with a callous attitude as Montem has shown.”

‘Will go to all your bosses and sue’

Because active coal mines in the Rockies all have active selenium monitoring plans, the AER formally requested that Montem Resources begin active selenium monitoring and reporting of its proposed project under the Environmental Protection and Enhancement Act.

But when six members of the AER met with four members of the company, including Montem CEO Doyle, in September 2021 to discuss the issue, the regulators received a hostile earful.

According to AER briefing notes, Doyle “stated that adding regulatory requirements is unacceptable” because nothing had changed at the mine site for decades and the mine had been reclaimed.

Doyle added that his company “would not do such monitoring.” Moreover, Montem “will go to all your bosses and sue.”

There was no way Montem could “accept regulators reaching into ‘barely breathing coal companies’ and adding new requirements.”

AER staff tried to interject, explaining that monitoring and reporting was not “a major change” and would just bring the company into alignment with other regulated coal mines.

But that didn’t stop the tirade.

Doyle expressed concern about issues arising from non-compliance with monitoring and added that the company was not interested in remediation. He added that Alberta Environment and AER could do all the monitoring they wanted: the liability lay with Alberta and not Montem.

According to a two-page AER briefing summary on the meeting, Doyle then stated that he did not want to be contacted by AER for any more meetings on such matters and “that from now onwards, Montem’s legal counsel will talk to the AER’s legal counsel” and Montem would file an appeal “and take legal action if they were asked to do any additional monitoring.”

Doyle compared dealing with the AER to having an unwelcome prostate exam, saying “the AER was good at getting the glove in place and reaching further up.”

At that point AER staff called the meeting off due to “Montem stating they will take legal action as well as the inappropriate conduct.”

Montem then appealed the AER’s monitoring decision. During a two-year-long dispute process with the regulator, Montem’s lawyers accused the AER of “regulatory over-reach.”

Montem staff or legal representatives also explained in subsequent meetings that Tent Mountain was not yet an active mine and it had been reclaimed. The company noted that “the source is the selenium percolating through the waste rock piles that have been reclamation certified.”

‘The go berserk approach’

Drew Yewchuk, a former staff lawyer with Calgary’s Public Interest Law Clinic and now a PhD student, said the dispute offered a window into how other companies treat the Alberta Energy Regulator.

“I think some of the Australian companies were convinced to come to Alberta by being told the regulator would let them do absolutely whatever they wanted, and they are angry that is not exactly true. But this is not that different from how a lot of other corporations act when dealing with the regulator. The resource extraction industry is packed with libertarians, and they all feel this way about regulation.”

He added that “corporations in polluting industries tend to take one of two strategies with environmental regulators — to suck up to them and offer to ‘help’ with their own experts, or to consistently go berserk and say every regulatory action is Stalinism.

“I don’t know exactly how common each approach is, but the ‘go berserk’ approach is not unheard of,” said Yewchuk.

Other Australian developers operating in the province have taken aggressive legal measures to maintain mining rights for coal in southern Alberta’s Rockies.

When provincial and federal regulators rejected the Grassy Mountain open-pit coal project as uneconomic in 2021, Gina Rinehart, the billionaire owner, contested the ruling in three different courts. Her company also launched two outstanding lawsuits against the Alberta government.

One accuses Alberta’s government of engaging in a conspiracy “to deny the Grassy Mountain Project in bad faith, based on the political atmosphere in the Province.”

Rinehart’s company, Northback Holdings, has also minimized the risk of selenium pollution. Its CEO, Mike Young, has repeatedly framed selenium as a natural and manageable issue for coal companies. “It is an issue that people worry about but for us it’s an education issue because selenium is something you need.” (Selenium is an essential trace mineral that becomes toxic to people in large amounts.)

Five Australian coal speculators including Montem Resources have also sued the Alberta government for a total of $15 billion in damages.

The lawsuits claim that the province’s 2022 moratorium on coal mining in the Rockies’ eastern slopes (now revoked) prevented them from developing coal properties.

According to the AER account of the dispute, the issue with Montem was not resolved until June 2023. That’s when the AER actually reduced requirements for “acute lethality” monitoring.

But at that point the company had already switched its name to Evolve Power and changed its stated plans for Tent Mountain. It proposed a so-called renewable project to make electricity by using mine wastewater for a pumped hydro energy storage project. TransAlta Corp. purchased that project early this year.

In January a new study by Alberta government researchers revealed that water sampling in 2021-22 found selenium concentrations had topped 185 micrograms per litre in a lake below Tent Mountain’s spoil pile — more than 90 times the environmental limit. Samples from Crowsnest Creek showed up to 23 micrograms of selenium per litre in Crowsnest Creek — more than 10 times the limit.

Farther downstream, the researchers reported, a sediment core from Crowsnest Lake recorded “increases in sediment, selenium, lead, carbon, nitrogen, and polycyclic aromatic compounds that closely tracked the history of mining at Tent Mountain.”

About 70 per cent of Alberta’s population opposes coal mining in Rocky Mountain watersheds.