Canada shift on reviewing energy projects critiqued

CALGARY, Alberta (Reuters) - Ottawa’s plan to shift responsibility of environmental assessments to Canada’s main energy regulator fails to address fundamental problems surrounding major oil and gas projects, a green think tank said on Friday.

Steam rises from nearby oil refineries over the city just before dawn in Edmonton, Alberta December 8, 2009 file photo. REUTERS/Andy Clark

But the oil industry, which had complained that the regulatory process for such developments as oil sands projects and pipelines was overly cumbersome and expensive, welcomed the streamlining initiative.

Canada’s federal budget, delivered on Thursday, contained a provision to move impact assessments from the Canadian Environmental Assessment Agency to the National Energy Board and Canadian Nuclear Safety Commission, which the government said have more expertise than CEAA.

“The way to actually streamline the assessment process is to address some of the environmental issues up front and do the planning there. I don’t see how that’s going to be helped by making that move,” said Simon Dyer, oil sands program director for the Pembina Institute, which is critical of the approval policy for major energy developments.

He said federal authorities should formulate regional standards for such things as water use, wildlife habitat and monitoring so developers can address them in the early planning stages rather than fostering an adversarial process.

Finance Minister Jim Flaherty announced the assessment measure as part of an effort to cut red tape in industry.

The C$16.2 billion ($15.7 billion) Mackenzie Gas Project in the Far North, for instance, has been vetted by both the National Energy Board and a Joint Review Panel that included the federal assessment body. The process has taken several years.

The JRP released its report on the environmental and socioeconomic impacts of Mackenzie at the end of last year and the NEB is expected to hear final arguments in April, so the changes will not affect that project.

But future oil and gas developments will benefit from the government’s move, said Greg Stringham, vice-president of the Canadian Association of Petroleum Producers.

He said he did not believe that environmental standards would suffer under the new system.

“To have the CEAA delegated to the NEB does provide a cleaner single window going forward,” Stringham said. “It doesn’t change the regulations that all these projects have to go through, but as we’ve seen with some of the joint review panels and so on, putting it with the NEB really will, I believe, improve the process.”

Reporting by Jeffrey Jones; Editing by Frank McGurty