The federal government plans to provide greater certainty for oil sands and pipeline developers that they won’t be held back by concerns about greenhouse gas emissions so long as they fit under Alberta’s existing regulatory plan.
Industry has raised concerns that Ottawa’s proposed environmental assessment regulations will impose a tough climate test, creating new uncertainty for energy project developers.
However, Ottawa and the Alberta government are discussing ways to exempt many oil sands projects from federal reviews altogether, while sending a clear signal that pipeline projects and oil sands mining developments that fit under Alberta’s 100-megatonne emissions cap would viewed as consistent with Canada’s plan for hitting its climate-change targets.
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While no decisions have been finalized, the federal Liberals are eager to send reassuring signals to the Alberta-based oil and gas industry, even as Premier Rachel Notley campaigns aggressively to ensure the Trans Mountain pipeline expansion project through British Columbia gets completed.
Ms. Notley was a key ally of Prime Minister Justin Trudeau in forging the pan-Canadian climate accord in December, 2016, on the expectation that her government’s policy to rein in greenhouse gas emissions would help win support for the pipelines needed to expand the province’s crude export capacity.
Federal Environment Minister Catherine McKenna has indicated that in situ oil sands projects – which use steam to extract bitumen from underground – could be excluded from a list of projects that must be reviewed under the Impact Assessment Act now making its way through Parliament.
The federal government does not currently conduct environmental assessments of those in situ projects, leaving that review in the hands of the province. However, the Liberals pledge to review climate impacts on any project that triggers a federal review.
Environment Canada is now consulting on what types of projects should be reviewed by Ottawa and what would be excluded from the list. When she unveiled the legislation in February, Ms. McKenna said in situ projects could be exempted because they are covered by provincial regulations – including a future cap on oil sands emissions − that are part of the pan-Canadian climate deal.
“If the federal jurisdiction is solely based on climate, and there is a cap on emissions that fits within our plan, then a project could be exempted,” Ms. McKenna’s press secretary, Caroline Thériault, said Tuesday.
As well, Ms. McKenna will soon be launching a strategic impact assessment on climate change that will assess Canada’s plan to meet its 2030 target. That assessment would again make clear that Ottawa would approve projects that are covered by provincial climate regulations that are consistent with the pan-Canadian strategy.
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“The strategic impact assessment on climate change will provide clarity to project proponents on the government’s view of the climate impacts,” Ms. Thériault said.
The government intends to complete the project list and the climate assessment prior to the legislation coming into force in late 2019. Meanwhile, projects will be reviewed under existing regulations.
Ottawa is currently not on track to meet its 2030 emissions target, with the gap having grown to 66-megatonnes owing in part to increasing oil sands production, according to a federal report produced in December, 2016. Ms. McKenna insists the Liberal government will put Canada on a path to achieve its target.
Environmental advocates have criticized the federal Impact Assessment Act for not including a clear climate test that would turn down any project that would significantly add to Canada’s greenhouse gas emissions.
“If it is indeed the case that the federal government is working alongside Alberta to consider exemptions for the oil and gas and pipelines, it just turns the whole intention of the legislation on its head,” said Catherine Abreu, executive direction of climate Action Network Canada.
“The federal government admitted the public had lost confidence in the existing process and it needed to be overhauled. If that is true, it needs to be overhauled for all projects, particularly those that are most controversial.”