Alberta Premier Rachel Notley is planning another tour to Toronto and New York to talk up the Trans Mountain pipeline expansion to business leaders.<\/p>\n
It\u2019s certainly good exposure for her re-election campaign. It probably won’t change investors’ pessimistic views of Canada’s oil and gas sector.<\/p>\n
Here’s the problem. Aside from Canada’s dysfunctional handling of the Trans Mountain project, governments (including Alberta’s) have burdened energy companies with so much new regulation, so many new costs, and are on a path to make regulatory reviews of big energy projects so much more political, investors have tuned out and moved to jurisdictions where governments aren\u2019t kneecapping their companies to meet commitments on climate change.<\/p>\n
The message couldn\u2019t be clearer than in the Canadian Energy Pipeline Association\u2019s recent response to Bill C-69, the Impact Assessment Act, introduced by the federal government in February and now making its way through Parliament.<\/p>\n
The group warns that instead of restoring trust in Canadian energy regulation, the bill, one of Prime Minister Justin Trudeau\u2019s priorities, ensures no other major pipeline project will ever be built in Canada.<\/p>\n
That\u2019s a bold statement from a lobby group, but no hyperbole. The Alberta-based oil and gas sector is that disillusioned with Ottawa\u2019s relentless energy industry re-engineering.<\/p>\n
The organization \u2014 which represents historic Canadian companies like TransCanada Corp., Enbridge Inc. and Pembina Pipeline Corp., whose shares are held by many Canadians in their RRSPs \u2014 doesn’t mince words in its submission to a parliamentary committee:<\/p>\n
\u201cCurrently there is profound uncertainty in advancing new major pipeline projects. We now have a significant problem as a sector and as a country in accessing new markets for our products around the world. The development of new projects is grinding to a halt. CEPA member companies that have material assets in other countries are actively pursuing those opportunities because of the uncertainty and potential implications of further potentially seismic regulatory changes that will directly impact the pipeline sector. Our sector is suffocating because of it.\u201d<\/p>\n
The group complains that on top of the regulatory \u201cpoison\u201d doled out by Canadian governments in the past two years \u2014 including the tanker ban off the British Columbia coast, proposed methane emissions regulations, provincial greenhouse gas emissions regulations, B.C.\u2019s restrictions on transporting bitumen, lack of clarity on Indigenous rights \u2014 the federal Liberal\u2019s regulatory reforms \u201cdouble down on the factors that created the toxic regulatory environment for major projects that this regulatory review process was intended to fix.\u201d<\/p>\n
Specifically, CEPA says the bill expands reviews to serve the whole buffet of Liberal priorities \u2014 climate change, gender-based analysis, Indigenous reconciliation, sustainability tests, making them more rather than less political.<\/p>\n
It also sidelines the National Energy Board, which has all the expertise to review big projects, and puts a new agency in charge with no track record and a broadened role to implement the government\u2019s political agenda, CEPA says. Instead of shortening review timelines, as the government promised, the new process extends them to 29 months from 18 months, not including more months required to complete an impact assessment report.<\/p>\n
\u201cIt is difficult to imagine that a new major pipeline could be built in Canada under the Impact Assessment Act,\u201d CEPA says. \u201cWe are concerned that the government has effectively frustrated regulatory reform in order to advance their climate change agenda and has baked broad policy subject matters into an otherwise very technical decision-making process. CEPA does not see anything \u2026 that will attract energy investment to Canada.\u201d<\/p>\n
That’s not how Ottawa’s sees it. Caroline Theriault, spokeswoman for federal Environment Minister Catherine McKenna, said better rules are needed to review resource projects worth more than $500 million in investment in the next decade.<\/p>\n
\u201cSince forming government we have done more to support Canada\u2019s energy sector and get our resources to market in over two years than the Harper Conservatives could deliver in a decade,\u201d she said in an emailed statement.<\/p>\n
\u201cOur goal is one project, one review \u2014 we will streamline the process and coordinate with the provinces and territories to reduce red tape for companies and avoid duplicating efforts in reviewing proposed projects. We are making the process more predictable and timely, to clarify the process to engage stakeholders effectively, and identify potential issues with project proposals up-front. These better rules will increase regulatory certainty and clarity, encouraging investment in Canada\u2019s natural resources sectors. The environment and the economy go together, and these rules will ensure good projects move ahead.\u201d<\/p>\n
Notley has been working with Ottawa to address industry angst over the regulatory reforms by advocating an exemption for pipelines and oilsands from climate assessment tests.<\/p>\n
Chris Bloomer, president and CEO of CEPA, said his group would welcome more clarity on how Bill C-69 intends to assess a major pipeline project\u2019s impact on climate change commitments.<\/p>\n
However, \u201cwe have consistently emphasized that broader policy issues should not be dealt with in project specific reviews,\u201d he said in an emailed statement.<\/p>\n
\u201cWe also remain concerned that, beyond the climate change test, the proposed changes in Bill C-69 do not provide the certainty that our industry needs. As companies look for jurisdictions to invest capital, they will factor in things like uncertainty, associated costs and potential delays. If Canada is perceived as a place where these risks are too high the capital will go elsewhere.\u201d<\/p>\n
Notley\u2019s tour in early May will involve meetings with business leaders, U.S. and Mexican governors, and Canadian premiers.<\/p>\n
What\u2019s really needed is a push in Ottawa to send regulatory reforms back to the drawing board so everyone agrees they deliver what was promised: to restore trust in Canada\u2019s regulation of major energy projects.<\/p>\n
Financial Post<\/p>\n