The Liberal government raised the heat Wednesday in the growing political battle over pipeline megaprojects, bringing in new hurdles that will add nine months to its review timeline for the Energy East project and four months for the Trans Mountain proposal.
Natural Resources Minister Jim Carr and Environment Minister Catherine McKenna announced several additional steps for projects that are currently undergoing regulatory review – prompting complaints from Conservative MPs that the Liberals are failing to support the depressed oil and gas sector.
The policy changes will affect Kinder Morgan Inc.'s proposed expansion of the Trans Mountain pipeline to Vancouver, TransCanada Corp.'s planned Energy East line to New Brunswick, the Pacific NorthWest liquefied natural gas export terminal in Prince Rupert, B.C., as well as crude-by-rail terminals and other projects now being assessed under rules adopted by the former Harper government.
Ottawa extended its deadline for a decision on Kinder Morgan's $6.8-billion project to December, and will lengthen the timeline for assessing TransCanada's $15.7-billion Energy East proposal, which is just beginning a formal National Energy Board hearing process. Ministers suggested no other decisions would be delayed.
The ministers insisted the government is not opposed to pipelines or determined to shut down the oil industry to reduce greenhouse-gas emissions, as some critics contend.
They said the Liberals needed to restore public trust in the government's assessment process so that decisions are understood – even if not universally supported.
"If we're going to attract the investment we need to sustainably develop our energy resources, then we have to better engage Canadians, conduct deeper consultations with First Nations peoples and base decisions on science, facts and evidence," Mr. Carr said. "Without the confidence of Canadians, none of these projects will move forward."
The Conservatives have been attacking the new government for failing to signal strong support for oil industry since Montreal-area mayors, led by former Liberal MP Denis Coderre, announced their opposition to the Energy East project, which would deliver 1.1 million barrels a day of crude to Eastern refineries and export terminals.
The mayors of Vancouver and Burnaby, B.C., oppose the Trans Mountain expansion and Liberal Premier Christy Clark said the company has not provided enough information on spill prevention and response.
Ms. McKenna, who will be hosting provincial and territorial environment ministers this week, said the climate assessments will not be a strict test, but that the impact of pipeline projects on emissions in the upstream oil industry will be one of many factors the government considers.
U.S. President Barack Obama rejected TransCanada's Keystone XL pipeline proposal last November after setting his own climate test that he would not approve a project that added to global greenhouse gas emissions. But Ms. McKenna said the Liberals' aim is to get the energy resources to export markets from landlocked Alberta and Saskatchewan.
"A healthy environment and a strong economy go hand in hand," the Environment Minister said. Credible environmental assessment "is the only way to get resources responsibly to market in the 21st century."
The government said all reviews now before regulatory agencies will be governed by five principles: None will be required to restart from square one; decisions will be based on science and the traditional knowledge of indigenous people; views of the public will be sought; there will be greater consultation with First Nations; and the greenhouse gas emissions resulting from projects, directly and indirectly, will be assessed.
Ms. McKenna will also lead a thorough revamping of the existing environmental assessment process, but said that effort could take a couple years.
After the announcement, Conservative natural resources critic Candice Bergen accused the government of adding unnecessary layers of consultation to the review and removing the process from the quasi-judicial hearings to the closed-door realm of the Prime Minister's Office.
"This is not good news for all those workers in the resource sector who are worried about their jobs right now," Ms. Bergen said. She said depressed commodity prices have cast a pall over the industry, and "there was no glimmer of hope" in the Liberal announcement.
Kinder Morgan said it worried about how the extended deadline would affect the project's schedule but "support[s] the principle that public confidence in the review process is crucial."
Tim McMillan, president of the Canadian Association of Petroleum Producers, said companies will be unhappy with the extended deadlines but will welcome the "clarity" of the new process. "Having the people of Canada understanding more fully the robustness of the regulatory system is what this is intended to do, and I think it will provide more public support and confidence."
Green Party Leader Elizabeth May said the Conservatives "have no one to blame but themselves" for the government's decision to supplement the formal review process.
"This government was handed a complete mess as a result of what the previous government did" in changing the rules to benefit project proponents and limit public participation in the process, Ms. May said in an interview. "If they rigorously apply all five conditions at the cabinet level, we could get a reasonable process."
Mr. Carr acknowledged that all the additional consultation and assessment will still leave some Canadians unhappy. A group of 74 environmental groups issued a statement Wednesday, urging the government to reject new pipelines to limit greenhouse gas emissions from the oil sands.
"There will be opposition" to whatever decisions the government makes on pipelines, he said. "There will be people who think things should be built tomorrow; there will be people who think nothing should be built, and then there are all kinds of Canadians who want to be satisfied that the process that led to a decision was a good one, was a fair one, and that they had their say."