Canada floats new review rules for pipelines, other projects

Bloomberg

The Canadian government is proposing consolidating environmental reviews under a single agency while adding a new approval step for proponents of pipelines and other major projects — in what it says is a bid to both strengthen and clarify environmental rules.
The proposal would add a requirement for an “early engagement” phase for projects that the government says would lead to “clear guidance” for industry on how a full assessment will proceed, and how long it will take. The move is aimed at industry frustrations that Canada’s existing environmental approval process is already a maze — unclear, time-consuming, legally fraught and under the watch of multiple agencies.
The proposal, contained in a discussion paper, lays out a framework that comes after a review of environmental assessment rules, fisheries laws and the National Energy Board, which oversees pipelines in the country with the world’s third-largest proven oil reserves. A wide range of projects are subject to environmental assessments. The changes would only impact new ones, as Prime Minister Justin Trudeau’s government has said existing proposals such as TransCanada Corp.’s Energy East pipeline won’t be sent back to square one.
The proposal raises the prospect of greater “cost recovery” from the oil and gas industry, while also focusing on ensuring a “single window” agency for federal environmental approvals and permitting while expanding the power of people to intervene in the process and making more data publicly available.

COURT CHALLENGES
Major energy projects in Canada have regularly run into a tangle of court challenges, evolving government policy and environmental protests, raising doubts about their fate. Trudeau introduced interim rules early last year before approving a pair of pipelines while rejecting a third — which had already been approved by his predecessor before being blocked by the courts.
The discussion paper proposes expanding the review of projects to consider a broader range of factors — including economic benefit, which is presently considered generally only in a final cabinet decision on any major proposal. The new assessment system will consider “both positive and negative impacts of a project,” the discussion paper says.
So far, the paper has won positive reviews from energy-industry groups. Canadian Energy Pipeline Association Chief Executive Officer Chris Bloomer said that while his organization is taking time to fully review the paper, it supports the principles laid out in the document and is “encouraged” by its content. Canadian Association of Petroleum Producers Executive Vice President Terry Abel said his group backs the proposal as well.
“They’ve done a really good job of identifying opportunities where there could be improvements, and it’s reflective of the broad range of input they’ve heard,” Abel said in an interview.

CUMULATIVE EFFECT
The proposed system will pay greater attention to so-called cumulative effect, or the total impact over time of a single project, and others near it, on the environment. That measure in particular could ripple through regions with high levels of industrial development, such as Alberta’s oil sands, the heart of the country’s energy sector.
The federal government is proposing to expand the ability of opponents and proponents to weigh in on a project by eliminating a test of which participants were given “standing,” by the NEB while also allocating more “participant funding,” the document says. It also commits to a process that “advances the government’s commitment” to the United Nations Declaration on the Rights of Indigenous Peoples, though stops short of fully committing to the declaration. The UN document places an emphasis on “free, prior and informed consent” of indigenous peoples, though Trudeau’s government argues that doesn’t amount to a veto on energy projects.
The scale of environment assessments will be “aligned” with the scale of a project and its impacts, the discussion paper says. The report commits both to peer-reviewed science and incorporating indigenous knowledge in reviews. The proposal also pledges “greater participation of indigenous peoples on assessment boards and review panels and in regulatory processes.” The NEB regulator will remain in Calgary, but board members and hearing commissioners will no longer have to live there, the paper says.