TORONTO - Residents and businesses in northern Ontario will be exempted from the province's proposed plan to restrict the burning of used motor oil -- a move that local environmentalists say is unsatisfactory at best.

The Ontario government is mulling a regulation that would forbid burning used motor oil in space heaters, an effort to cut down on unnecessary emissions in the most crowded parts of the province.

The ban would not apply in the areas north and west of the Mattawa River, Lake Nipissing and the French River, or in and around Manitoulin -- mainly because there's no other alternative for disposing of used oil.

"What really rankles me is that we're having this industrial use imposed upon us (in the north),'' said Brennain Lloyd, spokeswoman for the North Bay-based evironmental group Northwatch.

Lloyd said it doesn't make sense to impose a total ban in order to protect what she estimates is 15 per cent of the provincial land mass, when it ignores the same standards for the rest.

"To just say no approach, no response, just ignore the problem . . . I don't think that's satisfactory,'' she said. "It would have been a more responsible approach for the ministry of the environment to develop some infrastructure in the north for refining of those used oils.''

"It's not good because it does add elements to our environment,'' agreed Paul Wyatt, chair of the Friends of Misery Bay, an environmental group near Manitoulin Island, where the exemption will also apply.

"All sorts of elements that are constantly being added . . . which will eventually build up enough to cause problems for people in Toronto, not just (for people) in the north.''

The government says some 700 businesses, most of them in southern Ontario, are responsible for the release of metals, halogens and sulphur into the environment by burning the oil.

"We know that these toxins impact the nervous system and the immune system...especially in the local level,'' said Lindsay Mack, spokeswoman for the Ministry of the Environment.

Research has concluded that the practice is most harmful to those nearest the source, Mack added. The exemption is necessary simply because there's little else to do with the oil in northern Ontario, she said.

"By no means does it mean that we are not concerned about local air quality, but it comes down to the fact that we had limited disposal options.''

Usman Valiante, an environmental policy analyst from Orangeville, who has followed the issue in Ontario over the last decade, agrees that there is probably no easy fix for the problem.

"On pure environmental principles, it's not a good idea to burn oil,'' said Valiante. "But, it's better than pouring it on the ground and certainly there if there are no collection options, there are few other things to do with it.''

And because burning off used oil to heat a home or business can result in significant energy savings, many will continue to burn away their used reserves despite the potential risks.

Robert Beaudoin, who owns a 1,000-square-metre auto shop in Longlac, said he saves up to $4,000 a month during the coldest part of the winter using used oil collected from his customers to heat his shop.

''For us, it is very, very important,'' Beaudoin said of the savings.

''You add it up over a couple of years, that's a lot of money. With the economy being the way it is right now, it's a big, big advantage to being able to use it.''

Jurgen Matuszewski, who owns a service station in Elliot Lake, said he pays 10 cents in recycling costs for every litre of oil he buys, even though he gives it away for free to avoid paying the disposal fee.

''It's not chicken feed, let me tell you,'' said Matuszewski, who buys more than 700 litres of oil a month for oil changes alone.

For Matuszewski, burning used oil is the best solution -- especially when it comes to staving off the biting cold of northern Ontario.

"I don't see any problems with it as long as it is disposed of right and transported right.''