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Alberta strikes back, putting timelines on project approvals
Gary Park for Petroleum News
The Alberta government, under conservative leader Premier Jason Kenney, has shifted its focus from dealing with COVID-19 to rescuing its floundering economy.
At the forefront of its priorities is a sweeping frontal attack on barriers to fossil fuel development.
That coincides with a report by the Conference Board of Canada that Alberta’s gross domestic product will shrink by a “historic” 6.8% this year, compared with a national decline of 4.3%, coming in the wake of COVID-19 shutdowns and a collapse of commodity prices.
Despite an economic contraction across Canada of 25% in the second quarter, the board expects a strong rebound in the second half of 2020, followed by growth of 6% in 2021.
Unemployment in Alberta is forecast to average more than 17% in the current quarter, reflecting a devastating nosedive in the petroleum industry, where companies have chopped C$12 billion from their 2019 spending.
Direct oil and gas employment has fallen by 13% in the past year to 169,000, with 7,700 jobs evaporating in April alone.
The outlook is so bad that the PetroLMI Division of Energy Safety Canada has dropped plans to issue a labor market outlook this spring, believing change is occurring so fast that it would be unable to deliver an accurate forecast.
Taking control of economic events Tired of being stalled by opposition from British Columbia and Quebec and global governments, First Nations and environmentalists, the government has opted to shift its emphasis from dealing with COVID-19 to taking control of its own economic events.
The Kenney administration is also awaiting an initial report from its Economic Recovery Council (whose 12 members include former prime minister Stephen Harper) on ways to protect jobs during the economic crisis. Also pending is an updated budget, expected in August.
Not content with just holding back, the government has suspended a wide array of environmental reporting procedures for oil sands companies; introduced legislation to set deadlines on approvals for energy projects; changed its coal policies to make it easier to develop open-pit coal mines in a sensitive section of the Rocky Mountains; and given Energy Minister Sonya Savage free rein to suggest this is a good time to build pipelines because pandemic public health restrictions limit protests against those projects.
The province has also passed legislation giving it the power to jail demonstrators for six months and/or imposing fines of up to C$25,000.
Seen as reaction to stalled megaprojects The sum total of the aggressive moves is widely being interpreted by many friends and foes of the Kenney government as a lashing out at those who have stalled megaprojects to the point where some have either been abandoned or become bogged down in protests or legal challenges.
In a previously unannounced move, the Alberta Energy Regulator, a government agency, relieved companies of the responsibility to meet environmental monitoring conditions in their operating licenses.
Those procedures cover ground and surface water, most wildlife and bird monitoring and methane leaks, all of which the AER said risked exposing its officials to COVID-19.
Chief Allan Adam of the Athabasca Chipewyan First Nation said the decision destroyed 12 years of effort to negotiate the rules and will likely result in court action by First Nations.
Rachel Notley, leader of the Opposition New Democratic Party, said the decision was a “cynical and exploitive” use of the pandemic and would turn the Alberta industry’s image into the “Wild West of environmental protection.”
That view was reinforced when the British Broadcasting Corp. and The Guardian newspaper, outspoken opponents of oil sands development, both ridiculed a comment by Energy Minister Sonya Savage that protests against pipelines will be hindered by COVID-19 measures.
On the flip side, the Canadian Association of Petroleum Producers and Suncor Energy said they had pressed for an easing of the AER environmental regulations and tighter deadlines on project approvals.
Savage said the new legislation, while taking into account environmental concerns and public safety, will allow cabinet to set timelines and end an AER process that is “onerous, unpredictable and uncertain.”
Changes to coal regulations Separately, changes to Alberta’s coal regulations, which were introduced in 1976 to protect the Rocky Mountains and Foothills, are forecast by Savage as a chance to create hundreds of jobs by “rescinding an outdated coal policy ... and (attracting) new investment.”
Robin Campbell, president of the Canadian Coal Association, said he knew of at least six companies looking to establish mines in the Foothills region and export coal to Asia for use in steel production. He said each mine would likely employ 300 to 350 people.
Shaun Flucker, an environmental law professor at the University of Calgary, said that allowing open-pit development in the identified area would be “very destructive” to grizzly bears, caribou and other wild animals as well as rivers and other waterways, including the Athabasca River that flows to the Arctic Ocean.
Savage no longer low-key? In her 15 months in the energy portfolio Savage has built a public reputation as low-key and thoughtful, reflecting her pre-government time dealing with legal and regulatory issues while employed by Enbridge and the Canadian Energy Pipeline Association.
With one swipe she shattered that carefully assembled career on an obscure industry podcast by suggesting “now is a great time” to be expanding the Trans Mountain pipeline “because (under COVID regulations) you can’t have protests of more than 15 people.”
“People are not going to have tolerance and patience for protests that get in the way of people working,” she said.
Savage said “ideological protests” that get in the way of infrastructure development “are not going to be tolerated by ordinary Canadians.”
Jason Nixon, leader of the government in the provincial legislature, said Savage “rightly pointed out (there are people in Alberta, across Canada and around the world) who have dedicated themselves to stopping Alberta’s clean natural resources from being able to enter the market.”
But Nixon insisted the Alberta government “would not prevent someone from legally protesting,” and was “not pushing for automatic approvals,” adding Alberta was only seeking to introduce a “review process that would ... make our province more competitive” against similar jurisdictions.
The United Conservative Party government argues Alberta’s approval times are twice as long as those in Saskatchewan and four times longer than Texas.
Duane Bratt, a political scientist at Calgary’s Mount Royal University, said Savage’s comments were consistent with “everything” Kenney’s government has been saying, while it fights with environmental groups and some investors by demonstrating a “very narrow interest.”
- GARY PARK
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