May 16, 2012 / 9:46 PM / 5 years ago

CNRL exec backs Ottawa's changes to environment reviews

* “Nice Canadians” seen too ready to compromise

* Economic benefits need to be considered more

* Company has been moving some crude by rail

By Jeffrey Jones

CALGARY, Alberta, May 16 (Reuters) - Canadian government moves to quicken economic gains by shortening environmental reviews for big energy projects and de-clawing some oil industry critics are on the right track, a senior executive at Canada’s largest independent oil explorer said on Wednesday.

John Langille, vice-chairman of Canadian Natural Resources Ltd, said he believes there has been too much compromise with those who do not want projects to move forward under any circumstances, and that has led to overly cumbersome rreviews for developers.

“Fundamentally, I have to agree with the federal government that our regulatory system has become too much of an onerous task to get approval for projects,” Langille told reporters after a company-sponsored investor meeting.

“In some cases, we‘re, maybe, nice Canadians - we want to try to compromise with everybody, so when someone opposes something we want to try to compromise with them. Maybe as Canadians we have to stop doing that to a certain degree.”

Prime Minister Stephen Harper’s Conservative government has packed some big changes to environmental assessments and approvals into a sweeping budget bill. New rules would apply first to Enbridge Inc’s C$5.5 billion Northern Gateway oil pipeline, the subject of hearings that started in January.

The project, which would move crude derived from Alberta’s oil sands to the Pacific Coast, faces opposition from environmentalists and some aboriginal groups.

Changes include putting time limits on hearings, restricting participation to those deemed directly affected by projects or having relevant expertise, and removing the final say on approvals from the regulators and giving it to the federal cabinet.

Government ministers have also been highly critical of pipeline opponents, saying many are radicals bent on delaying the process or are tools of wealthy U.S. interests that would benefit by Canada’s oil remaining landlocked.

Canadian Natural is one of the country’s largest producers of heavy oil, which has been priced at a deep discount to international crudes, partly because of a glut in U.S. Midwest and Midcontinent markets. It plans to expand its 110,000 barrel a day Horizon oil sands project in northern Alberta.

Langille said it is important that Canada consider more of the economic benefits from energy infrastructure projects and also developments proposed by other industries, such as mining.

“I think the feds are going down a path that ultimately will get us to a better result than we are today,” he said.

He declined to comment on whether he believed Ottawa is demonizing industry critics.

He said, however, that indefinite periods for approvals are a major concern when companies seek to meet their own deadlines.

“I don’t mind going through the process - don’t get me wrong - I think it’s very good that we have set up processes where we do look at things and make sure at the end of the day they’re doing right,” Langille said

“I just think there’s a much better way to streamline the process - you don’t have to drag them out as long as sometimes they’re allowed to drag out - that’s all.”

As Canadian Natural waits to move its crude on projects such as Northern Gateway, TransCanada Corp’s Keystone XL pipeline to the U.S. Gulf Coast and a line to get crude to Eastern Canada, it has resorted to sending small amounts to Houston by rail, in addition to the oil it moves on regular pipeline links to U.S. markets.

Executives said the company is moving 7,000 barrels a day by rail, at a cost of $12-$15 per barrel. This is seen as short-term solution, Langille said. Spot pipeline rates for the same distance would be $8-$9 a barrel.

The railroads do not have extensive loading facilities in Alberta for oil, so that limits volumes, he said.

“We are not approaching it as end-all, be-all. Pipelines are still by far the best solution to get oil from where it gets produced to the refineries,” he said.

The company has 120,000 barrels a day of capacity booked for Keystone XL, which now faces a second round of U.S. scrutiny after TransCanada reapplied this month to build it.

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