Canada’s federal and provincial governments are facing new calls to speed up industrial approvals in the wake of the U.S. delay on the TransCanada Corp. Keystone XL pipeline.
Some of the country’s most senior energy executives say the country faces an urgent need to streamline regulatory approval for major new projects – including new pipelines and export terminals on the West Coast – and fix thorny problems with how aboriginal consultation is done.
The U.S. decision earlier this year to delay its Keystone XL decision has been an “A-ha” moment for oil and gas companies, pointing to the need to break Canada’s dependency on the U.S. as its sole export market, said Murray Edwards, the vice-chairman of Canadian Natural Resources Ltd. But as the industry looks to access Asia, it now faces many of the same issues as Keystone in gaining approval for massive new projects that face substantial opposition.
“The lesson of Keystone XL ... means we must get the regulatory process right, for the sake of the economy and for the sake of the environment,” Mr. Edwards told a Bennett Jones business conference Friday.
The stakes, he warned, are high for a country that stands to lose more than half a trillion dollars in revenue if growth is blocked in oil and gas – Canada’s most economically important industry. Existing export pipelines, for example, are expected to be full by 2015 or 2016, he said. That means new lines are needed.
To do that, governments, oil producers and pipeline companies must “urgently work together in a tightly co-ordinated effort” to create solutions, he said. Among the fixes he called for are mandated deadlines for approval decisions, a system that selects only one level of government to oversee a regulatory review, and new rules surrounding engagement with first nations, who Ottawa has a duty to consult. There is little doubt that the Keystone delay has caused broad soul-searching among Canadian executives.
“Our increased access to our next-door neighbour, the U.S., is not a given any more,” Lorraine Mitchelmore, Royal Dutch Shell PLC’s Canadian president, said Friday.
But lengthy regulatory processes are hampering Canada’s ability to sell into fast-growing new markets, and she argued that there isn’t much time to act. “Canada needs to get into the game within this decade, while there is still a strong demand for our products,” she said. “Missing the opportunity today may mean missing it forever, because everybody is trying” to access Asia.Report Typo/Error