Battle over Bill C69 demonstrates Notley govt support for Alberta oil and gas industry

Notley government, CEPA, Alberta oil and gas industry united in opposition to Bill C69, demand for amendments

Shannon Phillips is not happy with the state of Bill C69, the Trudeau Government’s new legislation to regulate environmental impact assessments of projects like pipelines, and she was in Ottawa Wednesday asking the Senate to fix it. By doing so, the Alberta environment minister has squarely aligned the Notley NDP with the oil and gas industry.

This is an important point because a common complaint in Alberta these days is that Rachel Notley and her government are anti-energy. Nothing could be further from the truth. Pick your criterion and the evidence since 2015 is clear that Alberta energy policies have consistently supported expansion of production and construction of new pipelines.

Bill C69
Rachel Notley, Alberta premier.

As the Premier told Energi News in an exclusive interview last month, the reason is obvious: creation of good paying jobs

I’ve always said, and I think I’ve been pretty consistent, that my perspective on our energy industry and the oil sands has always been viewed through the lens of trying to ensure that working people have long-term sustainable employment,” she said.

That same lens is how Albertans should view Phillips’ efforts to wrangle amendments to Bill C69, complex legislation that removes assessment from the National Energy Board and gives responsibility to a new entity, the Canadian Environmental Impact Assessment Agency.

As Energi News explained in the Oct. 11 deep dive on Bill C69, industry believes the NEB is the proper body to asses pipeline projects. The Trudeau Liberals disagree, having bought into the argument that the NEB is a captured regulator that has lost the confidence of Canadians. As a consequence, industry has lost confidence in the federal government’s ability to design an assessment regime investors can trust.

Phillips isn’t quite that distrustful.

“We support the government of Canada’s intention to modernize the assessment process. We support the goals of greater confidence in our regulatory system, of ensuring that climate change is appropriately assessed within environmental assessment, and we support a regulatory approach that promotes certainty and public participation,” she said during a press conference in Ottawa. 

But she echoes industry’s demand for greater clarity and certainty in the legislation.

Bill C69 cannot pass in its current form,” she said. “As a minister and a government that has just faced one of the most significant recessions in a generation, [we] understand that large projects and resource development are going to power our economy for years to come and we need that certainty in order to put Canadians and Albertans to work.”

Phillips outlined four objections to Bill C69 in its current form, which has already been passed by the House of Commons and is now being considered by the Senate.

One, she called for immediate publication of the “designated projects list.”

“That is something that is very important for investors certainty and it certainly levels the playing field with respect to what is captured by the new impact assessment legislation and what is not,” she said.

“Without knowing what the definitions and the conditions around how the designated project list would work, there are various concerns that may be founded or unfounded, but we won’t know until we see what’s on that list,” added Chris Bloomer, CEO of the Canadian Energy Pipeline Association, in an interview.

“We’re being told not to worry, that concerns will be fixed in the regulation your concerns, but nobody is buying that. I don’t think we are in trust mode.”

Bill C69
Prof. Martin Olszynski, University of Calgary.

University of Calgary law professor Martin Olszynski says Phillips is unlikely to be successful on this point.

“There is a long history of not releasing the regulations until after a bill is passed. Same with CEAA [Canadian Environmental Assessment Act] 1992, for sure, and I think CEAA 2012 as well,” he said in an email to Energi News. “Though, of course, that would be grand.”

Two, Phillips want limits on the discretion of the federal minister to pause the assessment process, thereby extending timelines and adding significant cost for proponents.

“We need to make sure that timelines are appropriate and that ministerial discretion is appropriately fettered and that reasons for pausing in any approval process are well defined within the legislation,” said Phillips.

Olszynski says delays are often the result of proponents either taking a long time or refusing to provide information requested by the review panel, which results in stretched timelines. He adds that demands for mandated timelines should include adequate resources – both human and financial – for the new assessment agency and especially indignenous communities that must be consulted as required by the Canadian Constitution Act of 1982.

“Minister Phillips can ask for greater certainty around timelines and ministerial discretion, but that can also backfire on proponents during what are by necessity complex, time-consuming processes,” he said in an interview.

Three, exemption of oil sands in situ projects and intraprovincial pipelines because the only “federally regulated environmental effect is greenhouse gas emissions.”

“In Alberta, those greenhouse gas emissions are both priced and subject to the 100 megatonne oil sands emissions limit. So, they’re both priced and regulated from our perspective,” said Phillips.

Bloomer says that provinces that do not have a climate plan, such as Saskatchewan, risk having the new federal assessment process applied to major projects: “specifically in Alberta, that’s SAGD (steam assisted gravity drainage used for in situ production). That’s a real concern, which is what Minister Phillips expressed in her statement.”

Olszynski says Alberta’s demand is “almost certainly going to be the case. In situ has never been subject to federal environmental assessment, even though they probably should. Same with intraprovincial pipelines.”

Four, exclude downstream emissions as grounds for rejection of any projects under review, a significant issue for industry after TransCanada withdrew its Energy East application last Oct., citing the NEB’s decision to include downsteam emissions (combustion of oil by consumers) as part of the project assessment.

Olszynski says he believes the federal government has already signaled that it won’t include downstream emissions, though he doesn’t have a source for his opinion.

Environmental assessment experts interviewed for the Energi News Bill C69 investigative report, including Olszynski, are not nearly as negative about the new legislation as industry and the Alberta government. In fact, they view it as a logical progression in many respects from the CEAA 2012 introduced by the Stephen Harper Conservatives, an approach Bloomer and others say is much better.

Even though Notley is viewed as a close ally of Prime Minister Justin Trudeau on climate and energy issues, that isn’t the case with C69.

The Premier told Energi News that her government had been working quietly in the background to persuade Ottawa that changes to the legislation are necessary. Those arguments seem to have fallen on deaf ears and Phillips has clearly been charged with leading a more public criticism.

Will those efforts be successful?

Bloomer says that industry has been engaged alongside the government in Alberta for over two-and-a-half years in this regulatory reform process without much progress.

“I think Minister Phillips says that she hasn’t been listened to. So, in that regard, we feel like we haven’t been listened to,” he said.

According to Phillips, senators appear to be listening, but the odds of amendments from the chamber of sober second thought being accepted by the Liberal-controlled House are slim and it looks like Alberta is poised to lose this battle.

If that happens, Albertans should at least acknowledge that the Notley government and industry waged war side by side.

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