Providing coverage of Alaska and northern Canada's oil and gas industry
May 2019

Vol. 24, No.21 Week of May 26, 2019

Stirring Canada’s pot in Parliament

Senators assert their role, calling for changes in legislation, changes that industry leaders describe as ‘critical’ to their future

Gary Park

for Petroleum News

Two bills before the Canadian Parliament that petroleum leaders have warned are “critical” to their industry’s future now face a head-on collision with the government of Prime Minister Justin Trudeau.

Both have gone through an unusually bumpy ride in the Senate, an appointed body that serves as the so-called chamber of “sober second thought” in Canada’s Parliament, but whose role is mostly that of a rubber-stamp for government legislation.

Bill C-48 and Bill C-69 have come under fierce attack in recent weeks, mostly because they are seen as singling out Alberta - the bedrock of Canada’s oil and natural gas production - for discriminatory attention from Environment Minister Catherine McKenna.

Viewed by many in Alberta as a zealot who wants to shut down the oil sands sector, McKenna issued a recent tweet accusing Conservative Leader Andrew Scheer (tipped to defeat Prime Minister Trudeau in this October’s national election) of “scheming behind closed doors with wealthy (energy) executives to gut environmental protection laws, silence critics and make pollution free again.”

Banning tanker traffic

That stirred a backlash against Bill C-48 to ban tanker traffic off British Columbia’s northern coast and Bill C-69, which aims to overhaul the environmental review process for large scale resource projects such as pipelines and oil sands development.

In an attack without parallel from a federal cabinet minister, McKenna claimed that Scheer’s meeting with the industry discussed “deploying litigation as a tool” to silence environmental critics.

Bill C-48 would ban tankers carrying more than 90,000 barrels of conventional crude or “persistent” oil (which is a thick slurry that is difficult to move or clean) from loading or unloading on the B.C. coast between the northern tip of Vancouver Island and the Alaska border.

Bill viewed as serious threat In

the forefront of those attacking the legislation, Senator Doug Black said there was no precedent for the ban anywhere else in the world.

Alberta Premier Jason Kenney said the bill represents a serious threat to Alberta’s and Canada’s economic interests, adding “we believe it must be scrapped.”

He also threatened to launch a constitutional challenge against the legislation if it moved forward.

The last, slender hope of either amending or scrapping the bill rested with a Senate committee that voted 6-6 to urge the Trudeau administration not to proceed with a final vote on Bill C-48.

Kenney praised the committee vote as a “victory for common sense and economic growth.”

Described as fulfilling promise

Transport Minister Marc Garneau said Bill C-48 is the “fulfillment of an election promise we made to protect the coast ... from the risk of a major oil spill.”

It would essentially rule out oil pipeline projects in northern British Columbia by prohibiting tankers from loading or unloading crude at ports in the region.

Alberta Sen. Paula Simons said she might have endorsed a temporary legal restriction on tankers to allow further research, arguing the bill only locked in a measure based on limited research more than 40 years ago after the Exxon Valdez disaster.

She said the bill was a “big middle finger to the province of Alberta ... when it was not a good time for the people of Alberta to be provoked.”

However, some critics have warned that even if the Trudeau administration stalled passage of the bill through Parliament it would be little more than a token gesture given that Bill C-69 effectively gives the government power to reject any plans for tanker terminals.

A different Senate committee from that which reviewed Bill C-48, attached 187 amendments - reduced from an earlier 250 - to Bill C-69 as the Senators lined up with the provinces of Alberta and Saskatchewan in showing their frustration with 15 years of federal failures to increase Canada’s oil pipeline capacity.

Key changes they called for would require the environment minister to get written approval from the finance and natural resources ministers before a project could be rejected; a reduction in timelines for project reviews to 510 days from 600; and limits on the role of foreign-funded environmental activism.

Kenney said he was pleased with the suggested amendments, noting he told the Senate committee that the bill needed “complete reconstructive surgery.”

Scheer vowed to repeal the bill if it becomes law and he becomes prime minister in the fall.

He proposed to establish a “dedicated right of way” across Canada from the Pacific to the Atlantic for projects such as pipelines.

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