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March 2010

Vol. 15, No. 11 Week of March 14, 2010

Lowering barriers to energy growth

Canadian government delivers on promise to ‘untangle a daunting maze of regulations’; eliminates separate environment assessments

Gary Park

For Petroleum News

A promise to reduce red tape facing Canada’s major energy projects — one that spans the four years since the government of Prime Minister Stephen Harper was elected — now seems destined for action.

The federal budget released March 4 included a commitment to shift responsibility for environmental reviews to the National Energy Board from the Canadian Environmental Assessment Agency.

The move won’t have any impact on the Mackenzie Gas Project, but is seen as a plus for future northern, oil sands and pipeline proposals.

Brenda Kenny, president of the Canadian Energy Pipeline Association, said a change would have reduced by years the decade-long process of advancing the MGP by saving a “huge amount of time before the project even got under way.”

Dave Collyer, president of the Canadian Association of Petroleum Producers, said only that the focus on regulatory efficiency is a “positive” step.

Untangling needed

In a speech opening a new session of the Canadian Parliament, the government said Canada’s “energy resource endowment” represents an unparalleled economic advantage that must be leveraged to “secure our place as a clean energy superpower and a leader in green job creation.”

As the world’s seventh largest crude oil producer backed by the second largest proven reserves after Saudi Arabia; the third largest natural gas producer; and “by far” the largest supplier of energy resources to the world’s largest marketplace in the United States, Canada must “untangle the daunting maze of regulations that needlessly complicates project approvals, replacing it with simpler, clearer processes that offer improved environmental protection and greater certainty to industry,” the government said.

That requires a special emphasis on the Arctic and the importance of a strategy to realize the potential of Canada’s North, it said.

But the Joint Review Panel that handled the environmental and socioeconomic impacts of the MGP took much longer than scheduled and overshot its original budget by C$10 million before delivering its final report in November.

Reform promised

The government said it will “reform the northern regulatory regime to ensure the region’s resource potential can be developed where commercially viable, while ensuring a better process for protecting our environment.”

The Harper administration said it will also give northerners a greater say over their future and accelerate the process of turning more power over to the territorial governments — Northwest Territories, Yukon and Nunavut.

The government also pledged it will “continue to vigorously defend Canada’s Arctic sovereignty (by) mapping resources and waters (and taking steps) to increase marine safety and reduce pollution from shipping and other maritime traffic.”

As well, it said, Canada will work with other northern countries to settle boundary disagreements.

Environment Minister Jim Prentice said the objective is to have first-class environmental assessments, while eliminating duplication in the regulatory process.

But Linda Duncan, environmental spokeswoman for the opposition Liberal party, said it is a fallacy that there is duplication of environmental reviews between the federal and provincial governments.

She questioned whether the NEB will place the same importance as the Canadian Environmental Assessment Agency on evaluating a project’s impact on land, water, air and wildlife.

No major new spending

The budget contained no major new spending on climate-change programs other than C$80 million for a tax incentive program that encourages retrofitting homes to improve energy efficiency.

Prentice said there is “no need for us to increase the budgetary resources of the department of environment to deal with climate change issues.”

He said the government intends to announce later in March new Canada-U.S. emission standards for automobiles and will follow that with regulations for heavy trucks, ships, trains and planes.

In addition, Prentice said, there will be aggressive measures to reduce emissions in the power sector, although only cautious steps will be taken in the industrial sector, including the oil sands, to ensure the government does not drive jobs and investment out of Canada.

Finance Minister Jim Flaherty said Canada will continue to offer C$500 million in subsidies for the fossil fuel industry to invest in new technologies to capture carbon dioxide emissions from their operations and place those gases in storage.

However, environmental groups say Ottawa is failing to provide support for investment in clean technology or to impose limits on carbon dioxide emissions to achieve its goal of a 17 percent reduction in greenhouse gas emissions over the 15 year period from 2005 to 2020.

Tom Weis, director of renewable energy for the Alberta-based Pembina Institute, said the government apparently views the economy and the environmental as adversarial, unlike other governments around the world and even some of Canada’s provincial governments.






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