March 30, 2012 / 9:28 PM / 6 years ago

New Canada reviews to apply to existing projects

OTTAWA/CALGARY (Reuters) - Streamlined rules for approving mines and pipelines in Canada will apply to existing environmental reviews and could have an impact on Enbridge Inc’s proposed Northern Gateway oil pipeline, Natural Resources Minister Joe Oliver told Reuters on Friday.

Canada’s Conservative government on Thursday said it would soon unveil measures to speed up the process of environmental assessments for projects, including setting firm timetables for formal hearings.

The Northern Gateway is a contentious project and so many people have asked to comment that the public hearing - which started in January - is now scheduled to wrap up towards the end of 2013, a full year later than initially planned.

Asked whether the new rules could affect the Northern Gateway, Oliver replied: “Yes, it could, because the whole point of having the proposed legislation dealing with reviews that are currently going on is that we want to make sure that those reviews, like the new ones, will be done in a timely fashion.”

Green activists say Ottawa is trying to push through projects as quickly as possible, and say the consequences could be an environmental disaster.

The Conservatives, keen to boost development of northern Alberta’s oil-rich tar sands, say the current system of assessing projects for their impact on the environment is far too complex and lengthy and therefore needs to be simplified.

Oliver said the new rules would contain transitional measures to ensure they applied to existing reviews.

“Because they are in different stages they are not all going to be treated the same,” he said. “They can’t be treated the same, they shouldn’t be treated the same. They have to be treated according to where they are in the process given what we want to achieve.”

The C$5.5 billion ($5.5 billion) Northern Gateway pipeline would move 525,000 barrels a day of oil sands-derived crude 1,177 km (731 miles) to the Pacific Coast from Alberta. It faces strong opposition from environmental and aboriginal groups.

Last year, the Joint Review Panel weighing the application was forced to lengthen the schedule by about a year to accommodate more than 4,000 people who registered to participate in the proceedings.

JP Morgan analyst Lawrence Eagles said the new rules could to blast open the bottleneck in moving Canadian crude, which is now forced into the U.S. market, where it gets a much lower price than oil sold on overseas markets.

New supply lines to the West Coast, such as Northern Gateway and Kinder Morgan Energy Partners’ proposed Trans Mountain expansion, are designed to lift the value of Canadian oil by opening up Asian markets.

Eagles wrote in a research note that the new regulations could make Northern Gateway operational by 2016 or earlier.

“Add in the Trans Mountain pipeline and the implication is that Canada could be shipping considerable volumes of oil into the Pacific Basin within four years,” he said.

Oliver said he hoped to unveil the new rules in a matter of weeks and said he wanted to be able to enforce the time limits on hearings. He did not give details.

He points to the seven years it took to approve Imperial Oil Ltd’s Mackenzie Valley Arctic gas pipeline project as an example of what he wants to avoid. Work on the pipeline has not yet started.

The Canadian Energy Pipeline Association welcomed the idea of fixed timetables, saying they would bring certainty.

“It’s fair to say that Mackenzie is a good example of the fact that you were dealing with a project that had no specific timelines associated with the review process and went on forever,” said spokesman Philippe Reicher.

“It would make sense to me not wanting to see a similar situation on any major project. It’s not in the best interest of anybody, quite frankly.”

($1=$1.00 Canadian)

Reporting by David Ljunggren; Editing by Peter Galloway

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