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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2007

Vol. 12, No. 6 Week of February 11, 2007

Mac process will help Alaska gas line

Regulator says Canada's experience with its northern natural gas pipeline will make things go more smoothly for Alaska's pipeline

Amy Spittler

Petroleum News

Scott Streiner says Canada’s experience with the Mackenzie gas pipeline review has beenven enlightening for his government, and has paved the way for the Alaska gas line’s environmental assessment (EA) and regulatory process in Canada.

Streiner, vice president of program delivery for the Canadian Environmental Assessment Agency, spoke at the annual Meet Alaska conference in Anchorage on Jan. 19.

“There have been some design flaws, and we’re fixing them. We’re in an ideal position to design a process that is more efficient. With the Alaska gas line we want to hit the ground running,” he said.

The Canadian EA and regulatory process currently being used was modeled in part after processes followed by two U.S. agencies — the Environmental Protection Agency and the Federal Energy Regulatory Commission.

The regulatory bodies in Canada adhere to the Canadian Environmental Assessment Act that came into effect in 1995. Under that legislation the federal government is required to conduct an environmental assessment if the government itself is the proponent of a project, if the government is providing funding or land for a project, or if the government has to issue permits or authorizations in order for a project to proceed.

The permits and authorizations “trigger” is the most relevant to pipeline development, he said.

Authorizations must be issued by the National Energy Board, and in most cases, by other federal departments and agencies as well.

“It’s the environmental assessment process that my agency, in consort with two organizations in the Northwest Territories, is overseeing for the Mackenzie gas pipeline,” Streiner said.

Canada has three types of environmental assessments

Under Canadian law there are three types of environmental assessments: screenings, which cover the vast majority of relatively simple projects where the environmental impacts are unlikely to be substantial; comprehensive studies for larger projects; and independent review panels for the most complex or controversial projects. Panel members are appointed by the government to do a thorough review of the potential environmental impacts of the proposed project and to make recommendations to the government about how these impacts might be mitigated.

For large projects such as the proposed Mackenzie natural gas pipeline, “and in all likelihood the Alaska gas pipeline, referral to a panel is almost always how the EA is done. That decision rests with our federal minister of the environment,” Streiner said. John Baird currently serves in this position.

“These review panels are not decision-making bodies. They are advisory bodies. But typically panel hearings garner a significant amount public attention and they are conducted in accordance with principles of autonomy and independence,” Streiner said.

“We at the agency provide support and advice to them, but ultimately it is the panel members that are charged with making recommendations to government.”

The main steps in that review process are “of course, the initial submission of a project description, followed by an application to the National Energy Board,” Streiner said. “As much as possible, we at the agency try to encourage project proponents to provide maximum detail in those applications. That’s no different than the practice of U.S. regulators, including FERC. The more information we have at the front end about potential parameters of projects, the better we can design the review process.”

Coordinated review process the goal

Streiner explained that once the referral is made to a review panel, “We strive to ensure a coordinated review process that involves bringing together all the potential players who have to review an application. As much as possible, we want all the environment assessments and regulatory requirements dealt with by a single panel.”

The panel then holds public hearings and provides the agency with a report, which then goes to the government for a response, after which regulatory permitting can take place. “So the process is relatively straightforward, at least in principle. Although, as we’ve seen with the Mackenzie gas pipeline, there can be challenges implementing the process in practice for the biggest projects.”

But “some of the publicity which has been attached to the Mackenzie gas project is unduly negative. The process has proceeded more smoothly and more effectively than some people may believe having read media reports,” Streiner said.

Aboriginal communities included

Streiner also addressed the inclusion of aboriginal communities in the regulatory process. “In contrast to Alaska, not all land claims have been resolved in Canada. There are still outstanding land claims involving various First Nation groups. But under the constitution of Canada, there is a requirement, which has recently been the subject of litigation, to consult aboriginal people when a major project is proposed in their traditional territory, whether or not they have outstanding land claims” he said.

This has resulted in an evolving public policy framework.

“The basic message coming out of the jurisprudence is that engagement with aboriginal communities should begin as early as possible, the engagement should be meaningful, and it should be an opportunity for aboriginal communities to fully articulate their interests and concerns with respect to proposed projects,” Streiner said.

By fall 2007, and possibly earlier, Streiner expects the Mackenzie panel report to be given to the government. From the establishment of the review panel to the submission of its report will have taken roughly two years. This includes planning hearings, holding hearings, dealing with interventions, writing and translating the report, and then moving forward into regulatory decision-making.

Streiner admitted that there have been some delays in the process for the Mackenzie project, but said that they were related less to environmental assessment than to economic issues the proponents needed to address.

“So far, litigation launched by Aboriginal groups has not resulted in any substantial delays in the review process, and the government has been fairly mobilized in the face of that litigation to try to resolve the issues being raised,” he said.

“We’ve learned a lot through the Mackenzie gas process,” Streiner said. As the largest and most complex environmental assessment and regulatory review ever undertaken in Canada, “we certainly have learned about the kind of information we require at the front end of a process and this insight will help us as the Alaska gas pipeline takes shape. We’ll be able to communicate to the proponents precisely what type of information they need to be gathering to ensure the process starts with the kind of detailed information base that allows us to proceed expeditiously.”

“The bottom line is our expertise has been strengthened, including the capacity of the government of Canada to review major pipeline proposals in the north. We will have available to us all the learning attained through the Mackenzie process for future major pipeline builds,” he said.

Alaska review 18-20 months

And once the agency has details regarding the portion of the Alaska gas pipeline that will go through Canada, it will begin designing the process with other government organizations.

“We want to use the most robust public review process available to us,” Streiner said. The review will take 18-20 months, starting from the moment the agency receives a full, detailed application until the moment the government is able to issue the necessary authorizations. “And that’s consistent with the federal legislation in the United States,” he noted.

Preparatory work for the Alaska gas line has been under way since 2000, he said.

“Decision makers have undertaken discussions intended to talk about the possible design of a review process; we also share information coming out of Alaska on how the political situation is unfolding, including the positions of the Governor and Legislature.

“We share that information and we talk about what the implications might be for the evolving shape of the project review process.”

In his closing remarks Streiner stressed the importance of the relationships between all concerned parties; of building relationships internally within and among Canadian governments, with American colleagues, and with the aboriginal communities along the pipeline route.

“Clearly this is going to be a complex review process and something that we’ve all learned is that the efficacy of these processes usually goes up in tandem with the quality of relationships among the people running them.”






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