Background. Overview: Rail Yard Expansion. NOVA Chemicals Joffre Site Project Description: Proposed Rail Yard Expansion

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1 NOVA Chemicals Joffre Site Project Description: Proposed Rail Yard Expansion Accompanying the Application to Lacombe County for Rezoning and a Development Permit January Background In mid-2012, Lacombe County provided a Development Permit for NOVA Chemicals Joffre Site Polyethylene 1 (PE1) Expansion Project, and approval for an associated construction access road approach. At the time of these applications, NOVA Chemicals advised the County that as part of the PE1 expansion there would be a requirement for additional rail car storage and operational needs. Since that time, NOVA Chemicals has reviewed a number of options related to these rail requirements, and has prepared a detailed engineering design for the preferred option. We have also completed the following studies: geotechnical, topsoil conservation / reclamation plan, stormwater management plan, and wildlife / habitat assessment. Stakeholders have been provided an overview of the rail yard expansion plans and their input has been sought. This Project Description is part of our rezoning / development permit application to Lacombe County, and provides an overview of the proposed rail yard expansion. Overview: Rail Yard Expansion By 2015, we expect an approximate 30% increase in rail traffic entering and leaving the Joffre Site in order to deliver to our customers the 40% increase in polyethylene product associated with the expanded PE1 facility. We are proposing an area west of the existing rail yard (see diagrams page 2), west of the road allowance, for additional rail car storage of approximately 450 cars by Proposed infilling of the existing north yard includes one new rail track and the extension of another, adding approximately 96 new rail cars. On another project unrelated to the PE1 expansion, there is an infill of two tracks for 60 new rail cars. There also will be three new tracks to / from the new PE1 loading barn to be constructed as part of the PE1 expansion. Along with proposed expanded storage track area, our logistics personnel are also working with rail service providers to facilitate the effective and safe rail movement of the additional cars. Annual Rail Shipment Information Current: 10,500 hopper cars; 7,500 tank cars Daily Polyethylene Rail Car Loading Current: cars / day Potential Additional: cars / day Potential Fleet Additions 2014/15 1,200-1,400 rail cars

2 Enlarged view of proposed re-zoning area for rail car storage Location of Proposed Rail Yard Expansion; Approvals Required NOVA Chemicals operates an existing rail yard to the north of the Joffre Site. The proposed rail yard expansion is to the west of the current rail yard, located in the E1/2 of W4M. NOVA Chemicals owns the land proposed for the rail yard expansion. The proposed area involves approximately 40 hectares (100 acres) of land. This area provides for both the current proposed rail storage expansion, as well as possible longer term needs. We are identifying this future potential in order to provide stakeholders a more complete view of the rail yard beyond The west side of the area is limited by a pipeline right of way which is not included in the rezoning application as it cannot be developed further. Currently, the 40 hectares associated with this application are leased for agricultural production (cultivated), and zoned Agricultural District. We are applying to Lacombe County to rezone this area to Heavy Industrial District and for a Development Permit. A County road allowance splits the two yards. At a minimum, agreements with Lacombe County will be required for the spur lines to cross the road allowance at the north and at the south. For safety and security reasons, NOVA Chemicals would prefer to acquire the road allowance in order to allow its full closure. We are pursuing this possibility with Lacombe County. Proposed Re-zoning For Expanded Rail Car Storage (+/- 100 acres) Joffre J offre Site Site We also submitted in early an application to Alberta Environment and Sustainable Resource Development (AESRD) under the Alberta Water Act with respect to drainage management for the proposed expanded rail yard. The north rail yard is not a specified activity regulated under the Environmental Joffre Site Protection and Enhancement Act and therefore not considered under NOVA Chemicals existing industrial approval. Alberta Transportation will be notified with regards to the final design and safety considerations. Project Access Road Expanded PE1 Facility Area Shown to the left is the Joffre Site with the proposed location of the PE1 Expansion largely within the site s existing footprint. At the top left is the detailed design of the existing rail yard (north of the site) and proposed expansion (to the west). A naturalized wetland area is being proposed as part of the stormwater management plan. 2

3 Surrounding Land Use The general area is mainly in agricultural production, with a mixture of cultivated land and pasture, with the exception of NOVA Chemicals Joffre Site and some other peripheral industrial operations. There is also oil and gas activity in the area. The proposed yard is located approximately 1.2 kilometres (km) southwest of the Hamlet of Joffre. The future land use concept map for Lacombe County (in the Municipal Development Plan), shows the proposed yard area as a potential future industrial area. General Site Conditions The proposed location of the development is in the Paskapoo geological formation, the Beaverhills Moraine, and located in the Black soil zone. The topography is characterized as gently rolling to rolling. There are a flowing spring and drainage channels that join and flow through the middle of the parcel and continue to the east. Options Considered In evaluating an appropriate location for the new rail yard, areas to the east and west of the existing north yard were considered, as well as other existing NOVA Chemicals rail yards around the Joffre Site. Due to operational and geotechnical restrictions to the west of the Joffre Site (adjacent to the PE1 Expansion Project), no further analysis was conducted there. The areas to the west and east of the current north yard were evaluated considering operations, safety / environment, constructability and community. Weighing the prioritized criteria, the west option is favourable mainly for the following reasons: Expansion to the west is further away from the majority of residents (Hamlet of Joffre) and from Jones Creek; Operationally, the physical access to the interchange tracks is shorter and more direct with this option; and Constructing to the west allows for physical separation of the new yard from the existing yard; this is preferable in terms of safety considerations. The following considerations favour the east option, but did not outweigh the benefits outlined above: More cultivated agricultural land will need to be taken out of production for the west option; More drainage and some additional design improvements are required for the existing yard with the west option (see page 6 Stormwater Management Plan); and The area to the east is currently zoned as Heavy Industrial District, while the area to the west requires rezoning. Expected Project Schedule Rail Yard Expansion Project planning, design, engineering Lacombe County Development Permit / rezoning application submitted County review / decision anticipated AESRD application under the Water Act submitted AESRD review / decision anticipated Alberta Transportation notification NOVA Chemicals Board approval for PE1 Expansion Project Rail yard expansion construction begins Rail yard available for expanded PE1 facility January March January Spring Early Early Mid- Fall

4 Project Considerations Safety, Environment, Community NOVA Chemicals values and encourages the input of stakeholders into our operations and for the proposed expansion. We are committed to the ethics of Responsible Care which include: Environmental protection and resource conservation Occupational health and safety Process, operations and transportation safety Timely and transparent communication. The following considerations have been incorporated in the design of the new rail yard: Construction of the yard will create a surplus of clay fill material. Creative solutions for storage of the material for long-term reclamation are being investigated with the potential opportunity for berms that could shield rail-related noise and visibility of the yard from a number of directions. Some tree removal will be required, but we are committed to net-zero tree loss. We will determine the best locations for tree replacement also considering the opportunity to help shield rail-related noise and yard visibility. Most stringent reasonable drop shields for high-mast lighting are included in the design to minimize backlight spill and ultimately mitigate light trespass and sky glow. Perimeter access roads for emergency response and maintenance purposes are included. As with all our projects and operations, NOVA Chemicals will work with the construction contractors on the site Good Neighbour Strategy to reduce construction-related impacts. Temporary construction facilities are expected to be maintained inside the proposed development footprint. During, our staff as well as rail carrier representatives will provide the community with more information and ask for input on operations and rail traffic to / from the site. Rail operations are sensitive to community noise impacts and the focus on responsible operations continues. In the past NOVA Chemicals maintained a self-imposed curfew limiting night-time rail activities. Due to the increase in expected traffic to the site, and the constraints of our primary rail carriers, a curfew will likely no longer be able to be maintained. Economic Overview The proposed rail yard expansion will entail an investment of approximately $30 million. 50% to 80% of project spending is expected to be sourced from local Alberta labour and materials suppliers About 80,000 construction work hours over about 18 months between Average workforce in the range of 15 to 30 people Expected incremental operations employment in the rail yard of five or six has been included in the overall PE1 expansion numbers (25 to 35 permanent new employees). The rail yard expansion will require materials and service contracts. NOVA Chemicals will finalize our procurement and contracting plans by mid-. No construction contract has been awarded at this time. Construction will be split into at least two contracts: civil / electrical construction rail construction. 4

5 Consulting with Stakeholders The proposed rail yard expansion is part of the overall PE1 Expansion Project stakeholder consultation program. As promised to stakeholders, we are providing more information on associated project infrastructure as it becomes available. We value stakeholder input and suggestions at any phase of the PE1 expansion, including the rail yard expansion and other activities. The following chart provides an overview of the stakeholder contacts and resulting input we have received to date related to the rail yard expansion. Stakeholder Contact Agricultural leaseholder one-on-one meetings to discuss proposed plans Adjacent neighbours to Joffre Site rail yard on-going one-on-one meetings to discuss proposed plans, noise and other considerations Considerations / Commitments Made by NOVA Chemicals Identified ways to retain as much adjacent land as possible in agricultural use during both construction and operations; review stormwater management plans. Potential use of berms, new tree plantings and other noise and light mitigation measures. Review stormwater management plans. In keeping with Responsible Care and our Good Neighbour Strategy, work with contractors to minimize construction noise and other impacts; adhere to this strategy for new and ongoing rail operations. Joffre Community Advisory Panel (JCAP) updates and input sought at Fall and Winter 2012 meetings; input received through Responsible Care reverification process Fall 2012; plan updates and discussion with rail logistics / operations personnel in Broader community rail yard expansion plans presented at October 2012 Community Open House; information provided in December 2012 community newsletter SiteLine; ongoing economic development presentations and updates for surrounding communities and business organizations; updates on community web site Lacombe County Mutual Aid Organization (LCMAO) update meeting December 2012; additional meetings to provide more information on rail plans / operations Albert Environment and Sustainable Resource Development (AESRD) Alberta Transportation Lacombe County Council and Development Staff ongoing updates; Council presentations slated for February and March Measures as identified above, plus considerations related to the safe movement of trains in the area. Review potential for rail crossing delays and other traffic impacts and obtain input on mitigation opportunities. Ensure expanded rail operations continue to meet all Responsible Care commitments safety, environmental, community. Business and employment opportunities continue to be available to local Alberta labour and materials / services suppliers. Considerations related to the safe movement of trains in the area. Ensure LCMAO is aware of all operational changes that may impact emergency response. Water Act application related to stormwater management plan. Notification on the final rail yard design and safety considerations. Reflect County recommendations / requirements in rail yard expansion design and operations. 5

6 Highlights of Rail Yard Expansion Studies Geotechnical The geotechnical investigation included 26 test holes within the proposed footprint. Typical findings were a 0.2 to 0.9 metre (m) layer of topsoil, underlain by a layer of silty sand up to a few metres in depth, followed by firm clays. Study recommendations include provisions for track support of 6-inch ballast and 10-inch sub-ballast, supplemented with non-woven geotextile and / or geogrid in areas where subgrade stabilization is required. Topsoil conservation / reclamation plan A topsoil conservation and reclamation plan was prepared to ensure topsoil will be handled and stored in a manner in which the proposed footprint can be returned to an equivalent land use capability at some time in the future. Stormwater management plan A stormwater management plan was prepared for the proposed development area as there are existing drainage channels that traverse the site and there is a flowing spring that also connects to the main channel and flows east. The plan proposes a naturalized wetland on the west side of the new yard in order to control flows and prevent flooding downstream. The plan also recommends some improvements to the culverts underneath the existing yard and a release pond on the east side of the existing yard to provide sediment control prior to release through a French drain (an open drainage channel covered with gravel / rocks) into Jones Creek. The plan is subject to AESRD approval. Please contact us for more information or to provide us your views and input: Community Relations at / joffresite@novachem.com Wildlife / habitat assessment A wildlife habitat and wetland survey was conducted for the east half of the section where the proposed rail yard is located. Some small existing wetlands and the intermittent drainage channel were identified as well as potential migratory bird habitat. Mitigation recommendations were included in the report which NOVA Chemicals will adopt, such as the removal of trees before nesting begins. The complete studies are included with the application to Lacombe County. is a registered trademark of NOVA Brands Ltd.; authorized use/utilization autorisée. Responsible Care is a registered trademark of the Chemistry Industry Association of Canada and a registered service mark of the American Chemistry Council in the United States. 6