Environmental regulations take heat at the Global Petroleum Show
CALGARY, ALBERTA, JUNE 13, 2018. Dennis McConaghy, Author of Canada after the Keystone XL, told Canadians on Tuesday that Canada’s new regulatory review process for energy projects has to change.
His comments target Environment Canada’s new Impact Assessment Act, which broadens the scope of environmental assessments and gives Environment Canada more discretion to veto energy projects like pipelines even before an assessment begins.
Speaking at the Global Petroleum Trade Show in Calgary, McConaghy said “The current government should stand down from its current legislation (Bill C69). Trust me, it'll only make things worse and will probably be the death now of private capital for any major (energy) infrastructure in this country.”
Bill C69 introduces Environment Canada’s new Impact Assessment Act and Impact Assessment Agency of Canada. Launched in February 2018, they replace the Canadian Environmental Assessment Act, 2012, and the Canadian Environmental Assessment Agency.
The new act expands consultations with stakeholders and calls for greater respect for indigenous knowledge.
“What (Environment Canada) could actually do is clarify what represents adequate consultation,” said McConaghy. All of these energy projects have been beset with litigation after the approval stage. They get approval and then there are cases brought before courts. And certain courts are prepared to let these claims overhang the approval process.”
Recent court challenges beset the $7.4-billion Trans Mountain pipeline in 2017 and overturned approval for Enbridge's Northern gateway pipeline in 2016. In both cases indigenous groups claimed that Canada failed to consult with First Nations on the pipeline projects.
“The claims all have the same characteristic, consultation was inadequate,” McConaghy said. “But what does inadequate mean? Was it the (joint federal-provincial consultation and accommodation) report that you didn’t like? Or were there actual gaps in your understanding of what the project actually was? A functional country actually has to give clarity to that. And they have to reduce the risk of the courts second-guessing adequate consultation. Frankly, that is one of the biggest doubts and risks that overhangs the Kinder Morgan project.”
The new Act calls for a 180-day planning phase and consultations with the public, local jurisdictions, federal agencies and indigenous peoples before the assessment begins. The legislated timeline is shorter now, and Environment Canada can “stop the clock” during the planning and assessment phases, leading to further uncertainty.
“We have to get the politics out of these projects early not late. By that I mean that the regulatory process should fundamentally be a technocratic not a political exercise,” said McConaghy. “It should be about setting conditions on the construction and the operation of the project, ensuring that legitimate stakeholder impact, environmental impact and safety risks have been addressed through reasonable conditions.”
McConaghy said that the “reasonable conditions” should achieve global standards of risks, “because there's no absolute guarantee that there won't be a future incident with any piece of infrastructure.”
The new Impact Assessment Act also calls for alternative means of carrying out the project in a technically and economically feasible manner. Resource companies must show they have deployed the best available technologies and contributed to sustainability without hindering the Canadian Government’s ability to meet its environmental obligations and climate change commitments.
Sustainability is now mandatory for energy companies and defined as “the ability to protect the environment, contribute to the social and economic well-being of the people of Canada and preserve their health in a manner that benefits future and present generations.”
McConaghy said projects must be delegated to regulators, explaining that this would restore conditions and private-sector capital risk getting major infrastructure projects approved.”
