The Harper government has approved Canada’s fifth oil sands mine after the project spent six years under regulatory scrutiny, prompting a senior cabinet minister and energy executives to argue lengthy reviews are unacceptable.
France’s Total SA and its partners are now free to build their proposed Joslyn North strip mine after Joe Oliver, the federal Natural Resources Minister, gave Ottawa’s blessing Thursday, while pushing for regulatory reforms.
Mr. Oliver said the approval process for projects like the Joslyn North effort should take no more than two years. His comments, made in Ottawa, come as global leaders struggle to hammer out a new climate change treaty in South Africa. Mr. Oliver’s push to speed up the approval process will further fuel criticism of Canada’s oil sands industry, which is expected to double production by 2020 to three million barrels of crude per day.
Alberta spits out 40 per cent of the country’s carbon dioxide emissions, with oil sands and coal projects representing the largest chunk of the province’s emissions. Oil sands mining efforts, while layered with environmental challenges, produce less carbon dioxide than drilling projects.
“The Joslyn project is a telling example for the need for a more efficient and effective regulatory system,” Mr. Oliver told reporters. “It is crystal clear that we need to put an end to unreasonable delays – delays that can jeopardize the viability of projects like Joslyn and harm our reputation as an attractive place to do business.”
Jean-Michel Gires, the head of Total’s Canadian operations, said that while the company is pleased approval came through, the six-year process tested Total’s patience.
“Having to explain to [Total’s]headquarters what is the process we have to go through and why do we need to go through a six-year process is quite difficult,” Mr. Gires said in an interview. “But nevertheless, we did survive.”
Those advocating a simpler regulatory process want to eliminate repetitious steps between the federal and provincial governments, for example. The decades-long Mackenzie Valley gas pipeline project also spurred calls for reform.
“We definitely welcome the fact that now the authorities both at the provincial level and the federal level want to reconsider [the process] [They]want maybe to streamline the process so it could be much more one project, one review. Potentially possible as well: Why not one regulator?” Mr. Gires said, noting this will be the first project where Total serves as the operator. “That definitely would make our lives easier.”
Liberal environment critic David McGuinty said the Conservatives appear determined to gut the environmental review process to accelerate approval of major resource projects.
He agreed some regulatory systems can be made more efficient, but said Mr. Oliver is setting unrealistic time limits.
“It’s not a question of speed, it’s a question of credibility,” Mr. McGuinty said.
Total shares its Joslyn assets with Suncor Energy Inc. , Occidental Petroleum Corp. and Japan’s Inpex Corp. Total says the estimated capital cost for the Joslyn North mine is between $7-billion and $9-billion, and it will produce 100,000 barrels of oil per day at its peak. Production is scheduled to begin in 2017. The entire Joslyn lease, covering 221 square kilometres, will churn out more than 874 million barrels of bitumen over 20 years, Total estimates.