Canadian regulatory approvals will be completed as much as a year faster for natural gas and oil projects such as long-haul pipelines as a result of an efficiency measure adopted by the Conservative regime in Ottawa, the National Energy Board (NEB) predicted.

The action, known as “substitution,” delegates to the NEB the Canadian Environmental Assessment Agency’s (CEAA) authority over all projects that also fall within the board’s jurisdiction. The measure responds to demands that have frequently been heard from industry and the country’s provincial governments ever since the specialized watchdog was created 15 years ago, national Environment Minister Jim Prentice said in an interview.

“All agree there is a need for first-class rules — but with one assessment, not two or three (including provincial environmental reviews),” said Prentice, a prominent Conservative and lawyer from the Canadian gas and oil capital of Calgary. “There is overwhelming support for streamlining,” including a formal resolution by the Council of Canadian Environment Ministers.

In practice the new policy, announced in the Tory government’s recent budget for the 2010-2011 fiscal year, which starts April 1, means the NEB alone will handle the environmental work on energy projects instead of forming only part of joint review panels including CEAA representatives.

The efficiency measure comes too late to speed up the almost six-year-old, still incomplete regulatory ordeal of the Mackenzie Gas Project (see NGI, March 22a; March 22b). The change also may not, all by itself, do much to help future Arctic gas development.

Aboriginal land-claim settlements since the early 1980s have created an array of specialized regional authorities and agencies in Canada’s Northwest Territories on top of the NEB and CEAA, which both have jurisdiction there, too. The complicated northern regulatory scene is under separate review in Ottawa, while native communities prepare to defend staunchly held views of their rights in the law courts if necessary.

Under the substitution approach, full-scale environmental impact assessments and public hearings will continue to be held. A lengthy notice of the efficiency measure circulated by the NEB said a “participant funding program” is being developed for native groups, private landowners, environmental nongovernmental organizations and others with legitimate interests in projects.

But the process will become brisker by following an example set with a pilot test of environmental regulatory substitution in a gas case decided three years ago, the NEB predicted. In the trial run, the NEB conducted both its own and the CEAA’s job in approving the Emera Brunswick Pipeline Project.

Approval was speedy — by Canadian standards for contested industrial schemes — for the 145 kilometer (90 mile), C$350 million (US$340 million) connection between the new Canaport liquefied natural gas import terminal in New Brunswick and the Maritimes & Northeast Pipeline’s export service to the northeastern United States. Although dozens of interveners challenged the project on fronts from need for the line to routing and effects on the natural and human environment, the case took only 17 months to go from the construction application filed early in January of 2006 to final approval of the pipeline in late May of 2007.

In reviewing the trial run at regulatory efficiency, the NEB pointed out that the time savings were achieved by eliminating procedural steps rather than substantial assessments or public hearings.

The former joint review process required multiple federal authorities such as the fisheries and oceans department and the Canadian Transportation Agency to identify themselves as potentially “responsible authorities” for aspects of the pipeline project. Then all the branches of the Ottawa had to agree to recommend creating a joint review panel. As a further preliminary, the panel had to use a “track decision process” that required separate public consultations plus a decision by the federal environment ministry on a formal “scope” or mandate document for a project’s environmental assessment.

In explaining how the New Brunswick prototype case will become the new regulatory routine, the NEB said it stands well prepared to take over full responsibility for environmental reviews of energy projects within federal jurisdiction over developments that cross provincial or national borders. The board reported it already has a staff of about 50 environmental, socio-economic, land use and “stakeholder engagement” specialists. The substitution power to turn the job over to the NEB has been on the books since 1995 as a dormant provision of the statute that created the CEAA, the board pointed out.

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