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Changing Currents – Chapter 6: Findings and Conclusions

Chapter Six

Findings and Conclusions

Findings

The natural resource sectors are very important for Canada’s economic prosperity and will continue to be a dominant factor in the country’s economic profile over the long term. As significant users of water already, anticipated growth of the sectors will likely result in increasing pressure on our water resources. However, specific details regarding where and when these impacts may be felt are lacking. Due to limited, dated information and data regarding water availability (surface and groundwater) and industrial water use on regional and national scales, the sustainability of the country’s water resources becomes a question.

Sector-Specific Findings

The water uses of, and issues pertaining to, each of the natural resource sectors are unique. Each has a different use and impact on the water resources on which they rely. The issues are largely local and/or regional rather than national, in comparison with the issues identified in Chapter 5. With increasing pressures due to population and economic growth, and a changing climate, these matters could develop into national issues if they are not addressed now.

Hydroelectric Power Generation

Water is critical for hydroelectric power. Because this sector will be a significant future energy source in Canada (for both internal use and export), and in light of the drive for lower-emission energy sources, it is reasonable to expect water use by the sector to rise substantially over the medium to long term. As this sector’s water use is largely non-consumptive, impacts on regional water quantities do not readily appear to be of concern. However, the timing of use is an important consideration for hydroelectric power operations and therefore will continue to be a key issue in watersheds where there are competing uses for the water. As hydroelectric facilities can have significant effects on flow regimes and water levels within watersheds, these considerations must be carefully managed on a facility and on an individual watershed basis. Prudent management is necessary to balance electricity production with the needs of other users while also considering ecological needs and fisheries requirements. Moving forward, management of hydropower facilities should be considered on a watershed basis, particularly where there are multiple facilities and users on the same river system, to address potential cumulative effects.

Fossil and Nuclear Electric Power Generation

Water availability is also a major requirement for fossil and nuclear electric power. Relative to the hydroelectric power generation sector, the fossil and nuclear electric power generation sectors use less water (intake) but have greater consumptive use, and greater potential to negatively affect water quality. These sectors will continue to count on water availability into the future. Water availability will also remain a key consideration for siting new facilities. The sector does not appear to be significantly concerned about water scarcity overall, but rather is focused on future water management to ensure a secure supply of electricity. The need to refurbish and rebuild the Canadian electricity infrastructure may alter the sector’s water use over the medium to long term. How those developments impact water use remains to be seen, and is difficult to predict at this point without knowing the future generation mix, including hydropower. The key challenge of balancing electricity production with the needs of other users, including ecosystem needs, will remain into the future. The effects on water quality from thermal and chemical discharges continue to be an important issue that the sector needs to manage to ensure ecosystems are not adversely affected.

Oil and Gas

On both a national and regional basis, the oil and gas sector uses small volumes of water in comparison with the other natural resource and energy sectors. As such, the sector does not perceive water availability to be a critical issue. It’s impact on water quality and aquatic ecosystems remains the primary issue. This is particularly true for the oil sands sub-sector, which anticipates significant growth. This pace of development will exert increasing pressures on the ecosystems on a regional basis. Similarly the anticipated development of shale gas in Western Canada warrants attention, both because of potential effects on water quality and quantities in the region. A proactive approach to planning for further oil sands expansion and new developments in shale gas in British Columbia is necessary to ensure sustainable management of the water resources in those respective regions.

Agriculture

Water is crucial to the development of products and fuel derived from crops and animal byproducts. While not the largest gross water user of the natural resource sectors, agriculture is the largest consumer of water largely due to crop irrigation. Water availability is currently an issue for farms in water-scarce regions of the country. As the sector’s need for irrigation increases because of demand for higher-value crops and efforts to convert dryland operations, the risks associated with water limitations will continue to rise. The sector may be at risk from climate change (resulting in reduced spring runoff) and prolonged cyclical drought. Water availability will continue to be a dominating issue for the sector, and as such is a key driver for water efficiencies and conservation.

Mining

Relative to other natural resource sectors, the mining sector is not a significant user of water, gross or consumptive. As such, water availability does not appear to be a constraint or risk to future operations. Mines have the ability to significantly impact water quality in the regions and watersheds where they are located, and therefore water quality is one of the most important aspects of water management for this sector. The potential for long-term effects of mine operations on the health of the surrounding ecosystems is of particular concern due to contaminants that may be introduced to the environment as a result of mining activities.

Mining operations will need to consider the effects of climate change on a mine’s water management practices. Particular effects of interest include change in the amount of precipitation, change in the timing of precipitation, and an increase in frequency of extreme events. Having a robust and adaptive water management plan will help in addressing the uncertainty related to such events.

Forest

Both forest management and manufacturing activities affect water resources, but in very different ways. Forest harvesting activities can have significant impacts on the hydrology and water quality of watersheds; therefore, sustainable forest management strives to protect forest health and build in water protection measures to minimize these impacts. The pulp and paper manufacturing sector uses large volumes of water but with very low consumptive rates. Overall water conservation is not viewed as a high priority issue by the sector, given that most of the water use is nonconsumptive and because most operations are located on large waterways in regions that are not currently experiencing water shortages. Similar to mining, the pulp and paper sector’s primary water issues pertain to water quality related to discharges and the potential effects on downstream aquatic ecosystems.

The pulp and paper industry is reinventing itself in the wake of the recent economic downturn. The sector’s recovery into new markets and product lines is uncertain, and as such its future growth and the potential implications for water resources and impacts on ecosystems remain largely unknown.

Opportunities for Innovation

Significant economic barriers for broad implementation of water-efficient technologies exist for all sectors. However, some important drivers are resulting in advancement of better water conservation and management:

• The sectors are acutely aware that water efficiency is closely tied to energy efficiency. The water-energy nexus is a key driver of water conservation efforts.
• Public pressure in some cases has led to the development and implementation of a number of technologies to improve the way water is used.
• Water quality is more closely regulated, and as such has garnered significant investment for effluent treatment and containment measures.

Still, further opportunities for improving Canadian innovation in water management continue to exist for all sectors. Although there is no one-size-fits-all approach or method for improving water use, a greater emphasis on increased knowledge transfer, research, leveraged funding through private-public partnerships, and economic instruments are examples that could enable industry to reduce its absolute and relative water footprints. This in turn will help ensure that there will be water — in the required quality and quantity — for the environment and future development.

Conclusions

The natural resource sectors are a vital part of the Canadian economy and are anticipated to grow by as much as 50 to 60 per cent by 2030. As the most significant users of our water resources, these sectors’ growth can be expected to put increasing pressure on our water resources. Exactly how much pressure and exactly where it will be exerted is unknown. This is due to a lack of reliable, accurate data on our actual water resources, and data on actual water use by the natural resource sectors.

While certain areas of the country are responding to these concerns, governance at a national level is not currently positioned to respond effectively to this problem due to jurisdictional complexity, inconsistent approaches across the country, policy fragmentation, and a lack of resources and technical, scientific, and policy capacity. By addressing these specific challenges, governments will be able to establish more effective governance structures that will enable industry to develop solutions at the regional scales where they operate.

The NRTEE has determined that in order to address the issue of water sustainability and the future of the natural resource sectors, the following four key challenges related to governance and water management will be explored in Phase II of the NRTEE’s Water Program:

• We will evaluate current water allocation approaches across the country to determine if they remain effective and appropriate means to manage water, and we will identify opportunities for improvement to water allocation going forward.

Most of the water allocation approaches in Canada are based on historical policies. They were developed in response to the division of water resources to encourage settlement and development of this country, created at a time when water was plentiful, with few if any competing uses on any given water body. This is no longer the situation. There are now competing uses for water, the prospect of increased demand and a likely reduction in supply. In light of these changing circumstances, we need to explore other water allocation approaches beyond what we have in Canada today. And specifically we need to understand how such approaches might affect Canada’s natural resource sectors.

• We will further examine collaborative governance approaches for integrated water management.

Water governance is changing across the country, with varying approaches due to differing regional demands and challenges, as well as differing watershed characteristics. Part of the change involves “collaborative” governance, resulting in the inclusion of more stakeholders in decision making than ever before. While differences exist between regional approaches, many governance issues are common across the country, including access to and understanding of good science, availability of data and information, policy fragmentation, regulatory incoherence, dispute resolution, political engagement, and financial support. Good collaborative governance principles and models exist and can be applied. The challenge is to figure out how to overcome the barriers that are preventing implementation of potential solutions.

• We will investigate strategic approaches to the collection and management of water-use data.

The evidence to date suggests that accurate, reliable data and information regarding actual water use by the various resource sectors is quite variable. Each of the sectors appear to have different regulatory requirements pertaining to water use, which differs between sectors and varies across jurisdictions. The reporting requirements also vary significantly. As a result, some sectors have a good understanding of their water use and potential areas for improvement (e.g., pulp and paper sector). Other sectors may not collectively have a solid understanding of their actual water uses, but on an individual operational basis, some proactive operators do understand and appreciate their water use. If Canada is to fully understand water use now and into the future, a comprehensive picture of actual usage across the country is necessary. This in turn must be paired with other monitoring data to ensure ecosystem flows are accounted for. This is not a simple, easy task — it will require resources, time, and commitment. Investigation of a strategic approach on how this may be accomplished is warranted.

• We will explore a full suite of policy instruments for water management in Canada, from traditional regulatory and voluntary conservation efforts to pricing and market-based instruments, which will be necessary for implementation of effective policies and strategies.

While conventional regulatory approaches play an important role in water management, market-based instruments could serve a function that to date has largely not been used in Canada. Putting an economic “value” on water may be an important approach to improving the demandside management of the resource, both to encourage efficiency and to account for the many non-market ecological goods and services provided by water. Water “valuation” can also be used to ensure that costs or benefits associated with changes in the environment are considered. Research suggests this approach may improve conservation efforts and contribute to pollution prevention.

The NRTEE believes that there is an opportunity now to put Canada on a policy path to ensure sustainability of our water and natural resources sectors. Canada needs a national approach to water governance — complemented by effective management systems — while governments are still in a position to consider all possible options and before water availability becomes constrained and turns into a critical national economic and environmental issue.