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Canada’s Liberal Government Lays Down Energy Project Principles

Canada's three-month-old Liberal government Wednesday added a formal political layer to the national approval apparatus for large, federally regulated oil and natural gas projects.

The natural resources and environment ministers, Jim Carr and Catherine McKenna, announced five principles for the federal cabinet to follow in ratifying or rejecting recommendations of the National Energy Board and Canadian Environmental Assessment Agency.

While the cabinet in Ottawa has always had the final say on federal regulatory agencies' law court-like and often highly technical decisions, the new provisions establish guidelines for the political oversight stage of cases for the first time.

The new dimension responds to public demand that emerged under the previous Conservative government and prompted the Liberals to include a review of regulatory review processes in their election campaign platform, the ministers said.

They added that fully reviewing the regime by consulting all concerned, devising change options and enacting reforms would take years. The review is expected to focus mainly on native and environmental affairs. During the study period, the Liberals pledged to enforce on themselves the principles, including:

  • No current project sponsor will be asked to return to the starting line; reviews will continue within the established legislative framework and in accordance with aboriginal treaty provisions, under the auspices of relevant responsible authorities and northern regulatory boards;
  • Decisions will be based on science, traditional knowledge of Indigenous peoples and other relevant evidence;
  • The views of the public and affected communities will be sought and considered;
  • Indigenous peoples will be meaningfully consulted, and where appropriate, effects on their rights and interests will be accommodated; and
  • Direct and upstream greenhouse gas emissions linked to the projects under review will be assessed.

As a practical matter, the main immediate effect of the commitments will be extensions of legislated decision deadlines for two major pipeline proposals: tripling capacity of the Edmonton-Vancouver Trans Mountain oil conduit to 900,000 b/d, and partial conversion of TransCanada Corp.'s natural gas Mainline to 1.1 million b/d of oil service.

The cabinet will give itself seven months to make a final decision on Trans Mountain instead of the former Conservative regime's promise of four months. Time allowed for the larger, more complex TransCanada case will be extended to 27 months, including six more for the regulatory agencies and four for the cabinet.

Liquefied natural gas export schemes on the Pacific and Atlantic coasts are also liable to be affected, but growth projects for the cleanest fossil fuel are far less contested than oil plans and were not specifically mentioned by the federal announcement. "We're not afraid," BC Natural Gas Development Minister Rich Coleman said as he visited Ottawa for a briefing on the new national guidelines.

Canadian industry captains gave no immediate response while corporate lawyers reviewed the carefully worded political commitments. But business sources indicated the announcement was no surprise because it was foreshadowed by the Liberal campaign platform and widespread understanding that elected leaders of all partisan stripes have been looking for ways to minimize the political risks of energy project decisions.

In Alberta, the chief oil- and gas-producing jurisdiction, Environment Minister Shannon Phillips described new pipelines as a priority for the New Democratic Party (NDP) provincial regime, just as they were for the Conservative dynasty the NDP defeated at the polls last May.

Phillips said in a statement, "We have made very little progress in that direction under the former federal government's rules. If these new rules will allow the issues to be heard and then to get to a decision, then they will have helped the process."

The provincial minister added that the NDP has already taken action to improve public acceptance of pipeline and oilsands projects by serving the official national target of restoring public trust in energy and environmental regulation.

The NDP "released a robust climate leadership plan in November which places Alberta among the world's environmental leaders," said Phillips.

"We expect this plan to become part of the assessment that is done through the review process and we believe that we have a good story to tell, one that can help get approval for pipelines to tidewater."

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