Close to Market

Definition:

“Close to market” is generally understood to mean: in close proximity to where the aggregate will ultimately be “consumed” (i.e. used in road and rail beds, drainage, etc.), or processed into other materials that are partially composed of aggregates (concrete, etc.).

Description:

The Provincial Policy Statement (PPS) 2.5.2.1 dictates: As much of the mineral aggregate resources as is realistically possible shall be made available as close to markets as possible. Demonstration of need for mineral aggregate resources, including any type of supply/ demand analysis, shall not be required, notwithstanding the availability, designation or licensing for extraction of mineral aggregate resources locally or elsewhere.

Gravel Watch Ontario feels that siting extraction close to market is not always appropriate and can lead to preferential treatment of aggregate extraction over other valuable land uses.

Discussion:

Superficially, sourcing a resource near to where it will be used, close to market, seems like a common sense approach, and in some cases this is true. Doing so can reduce transportation costs, heavy truck traffic on roads, the environmental impacts of noise and carbon consumption; and the infrastructure costs of building and maintaining highways, bridges, etc.

All things being equal, siting aggregate extraction as close to market as feasible is good policy; however, all other things are often not equal.  More often, the closer an extraction site is to the high-demand, the closer they also are to densely populated communities.

Aggregate extraction operations inherently bring with them noise and vibration; increased traffic; dust and air quality impacts; destruction of farmland; threats to groundwater, surface water, wells and the natural environment; intrusion into cultural heritage resources; and many other negative impacts. Proximity to sensitive receptors (a.k.a. people) is an issue.

Ironically, this close-to-market advocacy is NOT pursued when virgin aggregate is being blended with reprocessed aggregate-bearing industrial waste (a.k.a. “recycled aggregate” – see our Anti-Glossary) into asphalt at the extraction site The aggregate industry advocates for close-to-market policy when it relates to sourcing virgin aggregate; but advocates against it when it relates to bringing industrial waste great distances from urban markets to rural extraction sites for reprocessing and blending, then returning the material to the urban areas for consumption. A model driven by a desire for reduced transport and carbon production would seem to call for virgin aggregate to be transported to the urban area for blending with the recycled material closer to where it will be consumed. This contradiction may lead observers to question whether the industry’s support for a close-to-market mandate is driven more by profit and convenience than by concerns for the environment.

Case Study:

A large aggregate operator in Alberta, Standard General, has developed an efficient and cost-effective rail system to bring high-quality aggregate to its Edmonton processing facility from extraction sites 240 and 350 kilometres away. According to the company’s website:

“Gravel Supply by Rail is more cost effective and more environmentally friendly than traditional means of gravel transportation. Each rail car can hold the equivalent of roughly 3 gravel trucks and wagons, so each train load of 100 cars is taking the equivalent of 300 trucks off of the road network every day, making our roads safer and avoiding costly wear on our highway infrastructure. Shipping by Rail also emits roughly 52% less CO² than the equivalent in trucks.” View Standard General’s “Gravel by Rail” story here:

http://standardgeneraledmonton.ca/gravelsupplybyrail.php

Gravel Watch Ontario is of the opinion that a close-to-market mandate unnecessarily tips the playing field in favour of extraction, at the disadvantage of other land uses, and can result in operations being sited where they should not be. The economics of more distant transit should be an adequate balancing mechanism, without the addition of the close-to-market mandate.