Northern Albertans affected by the devastating wildfires in and around Fort McMurray have experienced challenging, and in some cases, life-changing, times recently. The impact on communities and businesses, particularly on the energy sector, is significant, and will pose challenges for some time. It has been inspiring to see how this tragedy has brought out the very best of generosity and kindness in Canadians.
Energy workers were struggling even before the fires in Alberta. Low commodity prices combined with regulatory uncertainty and delayed energy infrastructure projects hinder Canada’s energy sector, and negatively impact its competitiveness.
In January 2016, the Liberal government introduced an unclear and duplicative interim review process for energy infrastructure projects that outline intentions to base decisions on science and facts, consider the views of the public and effected communities, meaningfully consult Indigenous peoples and accommodate their rights and interests, and assess direct and upstream greenhouse gas emissions linked to the projects under review. Liberal ministers tout their announcement will “provide greater certainty” and “restore confidence” in Canada’s regulatory process.
This is confusing because these measures already characterize Canada’s regulatory process for energy project assessments and approval. Both Canada’s energy producers and the Government of Canada have a long history of consultation and partnership with First Nations in energy development. This relationship-building is incorporated into the existing review process, and First Nations and Métis companies, partnerships and employment certainly underpin Alberta’s oil and gas sector. In fact, oil sands companies employ among the highest numbers of First Nations workers in well-paying jobs of any businesses in Canada, and First Nations and Métis-owned companies are involved in oil and gas from production to service and supply provision, generating benefits and opportunities for their own and surrounding communities.
Stakeholders are concerned about this “new” approach. Alex Ferguson, the Vice President of the Canadian Association of Petroleum Producers, told the Standing Committee on Natural Resources recently that “we’ve scratched our heads a little bit…” about specific requirements and measures, and how it differs from Canada’s long track record of world class regulations and stringent assessment. He said the interim process is “a bit up in the air”. Others, like Katrina Marsh of the Canadian Chamber of Commerce, say they “don’t fundamentally believe that the environmental assessment processes run by the federal and provincial governments are broken.” The new requirements for upstream greenhouse gas emissions from pipelines are also worrying, given pipelines do not emit GHGs and that upstream emissions fall under provincial jurisdiction. This is not a bar to which any other major infrastructure in Canada is held.
The federal approach is causing uncertainty, delays, higher costs and creating a lack of confidence in the oil and gas industry. The Liberal government is undermining the stability and predictability of one of Canada’s most vital sectors that provides crucial economic benefits to all Canadians. In fact, the sector contributes $17 billion dollars annually to all levels of government to fund essential government programs and services. The industry is important in 12 of Canada’s 13 provinces and territories, and is the single largest private sector investor in the country, with $81 billion dollars in capital projects in 2014. The contribution of oil and gas companies to the Canadian labour force is considerable. More than 440,000 Canadians work directly and indirectly in the oil and gas sector, from coast-to-coast-to-coast.
The review process was independent, scientific, evidence and fact-based, and has always consulted with communities and the public, before the interim measures were announced. While the former Conservative government trusted the expert work and recommendations of the National Energy Board, the Trudeau Liberal government has created an entirely parallel additional layer of bureaucracy not to supplement the NEB process, but to duplicate it. They’ve even said that if the NEB recommends a project for approval, the Cabinet may not approve it.
So much for thorough decision-making based on facts and science, and not on politics.
Shannon Stubbs is the Member of Parliament for Lakeland, and the Official Opposition Deputy Critic for Natural Resources.