March 29, 2012 / 9:23 PM / in 6 years

Canada to speed up approval of big energy projects

OTTAWA (Reuters) - Canada, intent on boosting development of the oil-rich tar sands, will speed up the process for approving big energy and industrial projects such as pipelines.

The federal budget, released on Thursday, also said the right-of-center Conservative government would crack down on political activity by charities, some of which have strongly criticized Ottawa’s focus on energy exports.

The government, which has long complained about the complex approval system for pipelines and mines, said it would impose firm time limits on regulatory hearings, ensure that each project was only reviewed once and cut the number of environmental assessments.

At stake, it said, was up to C$500 billion ($500 billion) in investment in new Canadian projects over the next decade.

“Those who wish to invest in our resources have been facing an increasingly complicated web of rules and bureaucratic reviews that have grown over time, adding costs and delays that can deter investors and undermine the economic viability of major projects,” said the budget document.

“We need a regulatory system that reviews projects in a timely and transparent manner, while effectively protecting the environment.”

Ottawa and the 10 provinces share responsibility for regulation, which can mean some major projects are examined twice. Public hearings into proposed mines and pipelines can drag out the review process for up to seven years.

The government said it would impose a maximum 24-month limit for reviews. Hearings by the National Energy Board, the federal energy regulator, will be capped at 18 months and standard environmental assessments will take no more than 12 months.

The news angered environmentalists, who oppose all-out development of the tar sands on the grounds that extracting crude from the clay-like bitumen is energy-intensive and contributes to climate change.

“Canadians should be very worried. What the government is doing is putting the interests of big corporations, big oil companies, ahead of the interest of the public,” said Steven Guilbeault of the green group Equiterre.

“We will have very limited ability to question companies on the impacts of these projects on our communities, on our water reserves ... The remedy is far worse than the problem now.”

The Conservatives - who have close ties to the energy industry - also said they would eliminate the National Round Table on the Environment and the Economy, which provides analysis and policy advice.

The government says Canadian prosperity relies in part on development of the Alberta tar sands, which are estimated to contain 170 billion barrels of crude and are the world’s third-largest oil resource.

The budget document said the sands could contribute C$2.3 trillion to Canada’s gross domestic product over the next 25 years and support 480,000 jobs per year.

Canada exports nearly all of its oil to the United States, where a glut in supplies means Canadian crude is trading at a significant discount. The Conservatives want to boost shipments to booming Asian markets.

The new faster approval process would in theory help Kinder Morgan Energy Partners KMP.N, which wants to double the capacity of its existing Trans Mountain pipeline from the tar sands to the Pacific Coast.

The government did not say whether it might apply the new time limits retroactively.

The National Energy Board has just started public hearings into plans by Enbridge Inc ENB.TO to build a pipeline from Alberta to the Pacific Coast and so many people have applied to take part that the process could take two years.

Finance Minister Jim Flaherty said the “one project, one review” rules would apply to the Northern Gateway but gave few details.

The government, which blames what it calls foreign-funded groups for whipping up opposition to the pipeline, says it will restrict the ability of charities to fund organizations which engage in political activities.

“It’s unbelievable ... it seems we live less and less in a state of law and more and more in a dictatorship,” said Guilbeault.

Charities are already subject to strict rules which say they can spend 10 percent of their time and activities on politics. Flaherty said existing rules would be enforced more rigorously.

“We’ve had a lot of concerns and complaints expressed by Canadians that when they give money to charities they expect the money to be used for the charity’s purposes, not for political or other purposes ... there is clearly a need in our view for more vigilance,” he told reporters.

In other moves designed to help resource development, Ottawa said it would extend a temporary 15 percent mineral exploitation tax credit for investors in flow-through shares by another year to March 31, 2013.

Editing by Jeffrey Hodgson and Randall Palmer

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