Natural resources? Cut the red tape

One of many things for Ottawa to address as it drafts Canada’s post-pandemic economic recovery: red tape.  

delay.jpgRed tape – the elaborate and time-eating processes of application, review, public input, hearings, evaluation and (if lucky) final approval of major natural-resource projects in Canada.

One oft-cited example is the $11.4-billion Pacific NorthWest LNG project in BC that was cancelled by Petronas and its overseas partners in July 2017.

Looking for construction to start in early 2015, Petronas filed its formal Project Description with what was then the Canadian Environmental Assessment Agency in February 2013. The agency posted it publicly on 02 February 2013.

The agency eventually delivered its final findings (requiring many conditions to be met) on 27 September 2016.

  • Elapsed time: 3 years, 7 months, 26 days. (1,334 days in all.)

In contrast, look at Cheniere Energy Inc.’s experience with the U.S. Federal Energy Regulatory Commission (FERC).

Cheniere filed the Project Description for its Sabine Pass LNG project in Louisiana on 31 January 2011 and formal evaluation began.

The project received on 16 April 2012 the FERC order granting authorization to begin construction.

  • Elapsed time: 1 year, two months, 17 days  (442 days).

(Cheniere dispatched its first shipload of LNG, to Brazil, on 24 February 2016, and has since then delivered more than 1,100 cargoes, and more than 75 million tonnes of LNG, to ports and buyers around the world.)

And then there’s the classic Canadian case of the proposed Energy East oil pipeline, first announced in August 2013, to carry oil from Western Canada to refineries and port terminals in New Brunswick (and possibly Quebec). 

TransCanada Corp. submitted the formal proposal to what was then the National Energy Board on 30 October 2014.

Two years, nine months and 28 days later, on 23 August 2017, the National Energy Board moved the goalposts:

The board announced (after that 1,029 days of process) that that it would now take into account — for the first time on any pipeline project — not just the emissions generated by the pipeline, but the impact of upstream and downstream GHG emissions from potential increased production and consumption of oil resulting from the project.

And on 05 October 2017, TransCanada announced that it would no longer go ahead with the project.

Such red-tape delays caused the Alberta government of Premier Jason Kenney to introduce, on 11 June this year, Bill 22: the Red Tape Reduction Implementation Act.

It proposes 14 revisions of government regulations. Among them, oilsands projects approved by the province’s energy regulator would no longer need authorization from cabinet. The government said this would help streamline the process for energy development projects by 10 months.

And now Ontario is also planning to slash red tape on energy projects: Under its COVID-19 Economic Recovery Act, it proposes changes to the Environmental Assessment Act that would focus on projects that have the highest impact on the environment.

The changes would reduce timelines by half, from six to three years for the largest projects, and match the level of assessment requirements with the level of environmental impact to enable the acceleration of projects.

(Both the Alberta and Ontario bills are still in process in the legislatures.)

As the Canadian Federation of Independent Business notes: “Business licences for lemonade stands, permits to transport tadpoles to show-and-tell and inspectors demanding safety documentation for Windex. . . .

“Hundreds of thousands of hours and billions of dollars are wasted on red tape every year.”

Which is why the federation in launched in 2011 its Red Tape Awareness Week. This year’s week ran from January 20-24, 2020.

For the January 2021 version, could we look to celebrate some real cutting of red tape on natural-resource projects in Canada?

Do you like this?