February 28, 2019 / 4:14 PM / 6 months ago

Alberta premier warns energy bill could hurt slumping oil sector

CALGARY, Alberta (Reuters) - Alberta Premier Rachel Notley warned Canadian senators on Thursday that a slump in the country’s energy sector could deepen if the federal government passes proposed legislation to change how major projects like pipelines are assessed.

FILE PHOTO: Alberta Premier Rachel Notley speaks to the press following the First Ministers' Meeting in Montreal, Quebec, Canada, December 7, 2018. REUTERS/Christinne Muschi

Notley appeared before a Senate committee considering Bill C-69, aimed at revamping Canada’s major project environmental assessment process.

Proponents say the bill will streamline the approval process and rebuild public trust the environmental concerns are being addressed. Critics predict it will create new uncertainty, deterring investment in the oil sector.

Canada produces some 4.9 million barrels per day of oil, making it the world’s No. 4 producer. But rising output has outstripped new pipeline capacity, leading to a build up in storage, which last year sent the price of Canadian crudes tumbling.

Alberta, Canada’s main oil-producing province, estimates the bottlenecks cost the Canadian economy some C$80 million ($60.8 million) per day.

The land-locked province is desperate for new oil export pipelines, but regulatory and legal hurdles have delayed projects like an expansion of the Trans Mountain line to the Pacific Coast.

“We agree that the process for approving infrastructure projects needs to change,” Notley told the committee on Energy, Environment and Natural Resources. “But we cannot swap one broken system with another broken system.”

Prime Minister Justin Trudeau’s Liberal government unveiled the draft of Bill C-69 last year. Supporters say the changes will improve the consultation process with indigenous people, thereby reducing hurdles that have crippled major projects in recent years.

Critics say it will give too much power to government, allowing ministers to veto projects before a review even begins.

Notley suggested a number of amendments, such as more clarity on what factors will be considered when assessing a new project and excluding projects already reviewed at the provincial level.

“We do not want to have needless duplication of efforts on projects that are squarely within provincial jurisdiction,” Notley told reporters after her testimony.

She also asked for firm time limits for project assessments and for the federal government to consider the socio-economic impacts of a project.

The bill is also unpopular in neighboring oil province Saskatchewan and has prompted complaints that Ottawa politicians are not listening to western Canadians, said Martha Hall Findlay, president of public policy think-tank the Canada West Foundation.

“There’s a tremendous amount of frustration. People want to be heard,” she said.

The bill is before the Senate committee, which can offer amendments based on testimony by experts and affected individuals. It still faces a number of additional steps before becoming law.

Additional reporting by Julie Gordon in Ottawa; editing by Chizu Nomiyama, Jeffrey Benkoe and David Gregorio

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