INDUSTRY PUSHES BACK ON ENERGY EXEMPTIONS
Says Bill C-69 will politicize oil, gas decisions
OTTAWA • Industry groups are warning Ottawa against introducing certain exemptions on a project list set to be released under Bill C-69 this fall, saying such a move would politicize decisions over which oil and gas projects will be subject to new federal regulations.
The warnings come in response to a proposal by Ottawa to force some oilsands projects to face stricter federal environmental reviews if Alberta scraps its hard cap on oilsands emissions, now set at 100 million tonnes per year. The move was widely viewed as a political snare for United Conservative Party leader Jason Kenney, who has threatened to axe some of Alberta’s climate policies if he wins the upcoming provincial election.
The decision by Ottawa would put so-called “in situ” oilsands developments on a list of projects that specifies what kind of industrial activity will be subject to tough new federal environmental assessments. Under current legislation, in situ projects, which use steam to loosen up bitumen reservoirs deep below the earth’s surface, are only subject to provincial reviews.
Tim McMillan, CEO of the Canadian Association of Petroleum Producers, said Ottawa is “holding the hammer over industry” with its project list, and has long called for in situ developments to fall under provincial jurisdiction.
“If you have a good rationale, let’s talk about it,” McMillan said. “But if you’re going to put on the list only to exempt it off, even though you have no rationale, that just doesn’t make sense.”
His comments add to growing concerns over Bill C-69, a sprawling piece of legislation that will substantially broaden the scope of environmental reviews for major projects such as pipelines, hydro dams and offshore oil wells. Lobby groups have been putting pressure on Ottawa as it prepares to release its project list this fall, calling for relief on certain pipeline expansions, in situ projects and offshore programs.
Earlier this year, Environment and Climate Change Canada released a discussion paper that laid out guidelines for what projects might be subjected to environmental assessments under C-69. It said in situ oilsands facilities “could be” added to the project list, but said they could also be “exempted from federal assessment if a jurisdiction has in place a hard cap on greenhouse gas emissions.” Alberta is the only province with a hard cap on oil-related GHG emissions.
A spokesperson for Environment Minister Catherine McKenna declined to specify when the project list would be released. She said in situ projects could be subject to review under those environmental conditions because GHG emissions are “shared jurisdiction,” and therefore require some level of climate policy to be in place. “We are working to depoliticize the process — criteria for major projects have been made public, with decisionmaking based on science and evidence,” Environment spokesperson Caroline Thériault said in a statement.
CAPP has also called on Ottawa to remove offshore exploration drilling programs from the project list. Such drilling programs may take just three to six months to complete, the group said, but take years to secure regulatory approvals.
Meanwhile, the Canadian Energy Pipelines Association has asked for a sizable extension to its thresholds for pipeline projects that are subject to federal review. Currently, any pipeline that crosses provincial borders and is longer than 40 kilometres is subject to a federal assessment; CEPA has asked that threshold to be expanded to 500 kilometres.
“This impact assessment review should only be for those major, nation-building infrastructure projects,” said Chris Bloomer, head of the CEPA.
Such concessions could go a long way in quieting industry criticism of C-69, which has been widespread ever since Kinder Morgan Canada’s Trans Mountain pipeline was quashed by a Federal Court of Appeal ruling in August.
Bloomer has been among the fiercest critics of the legislation, telling a House committee this year that it was “difficult to imagine that a new major pipeline could be built in Canada” under the looming C-69 changes.
Last month, Alberta Environment Minister Shannon Phillips called on Ottawa to “stop dithering” and release the project list.
Alberta, as well as several industry lobby groups, have said Bill C-69 creates unnecessary regulatory overlap between the provinces and federal government. The bill’s opponents say many regulatory decisions are best left to provincial bodies like the Alberta Energy Regulator or the Canada-Newfoundland and Labrador Offshore Petroleum Board.
Environmental groups have called on Ottawa to include in situ projects on the list, saying to do otherwise would mark a contradiction in the Liberals’ environmentally-minded climate policies.
“That’s like saying you’re going to study the environmental impact of road vehicles and then giving a free pass to SUVs and transport trucks — it doesn’t make any sense,” said Patrick DeRochie at Environmental Defence.
The in situ process involves injecting steam through well bores as a way to tap deeper bitumen seams. Because most near surface oil deposits have been tapped in northern Alberta, analysts expect that as much as 80 per cent of future oilsands growth will come through in situ methods.
“Really, the future of oilsands expansion, if there’s going to be any expansion, is in situ oil production,” DeRochie said.
Bill C-69 is currently in second reading in the Senate. A committee is expected to study the bill this winter.