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Canada Budget Said to Have Measures to Speed Energy Reviews

Canada's Prime Minister Stephen Harper
Stephen Harper, Canada's prime minister. Photographer: Victor J. Blue/Bloomberg

March 20 (Bloomberg) -- Canadian Finance Minister Jim Flaherty plans to include new measures to expedite environmental approvals for energy projects in next week’s budget, as part of efforts to build new pipelines that will help the country tap into growing Asian demand for oil, a person familiar with the document said.

Prime Minister Stephen Harper’s Conservative government has vowed to speed the regulatory review process for projects such as pipelines, as the country seeks to build oil-exporting capacity after President Barack Obama in January denied TransCanada Corp. a permit for its Keystone XL pipeline to the U.S. New rules to quicken approvals will be part of the March 29 budget, the person said on condition they not be identified because the fiscal plan hasn’t been made public.

Harper has said diversifying Canada’s energy exports is a “national priority” as it will reduce reliance on the U.S. and help Canadian producers generate higher prices by easing a glut of oil in storage facilities around Cushing, Oklahoma. Canada sits on the world’s third-largest pool of oil reserves and Harper last month led a delegation of more than 40 business executives and five ministers to deepen energy links with China.

“If we do not act quickly to fill the demand for these commodities, the opportunity will pass us by,” Natural Resource Minister Joe Oliver said in a statement today as he announced plans to hold cross-country meetings to promote Canada’s resource industries. “That is why regulatory modernization is an economic fundamental we have to get right.”

Montreal Speech

Oliver is scheduled to give a speech in Montreal on March 27 to the Economic Club of Canada, according to the organization’s website.

“The Department will not speculate about the contents of the budget,” said Jack Aubry, a spokesman for Canada’s finance department. Patricia Best, director of communications for Oliver, didn’t immediately return a message seeking comment. Similar requests for comment from the Prime Minister’s Office were not returned.

In a Feb. 11 interview with Bloomberg News, Oliver said regulatory changes will include hard deadlines for reviews.

“One of the things we absolutely need is firm and enforceable timelines from the beginning of the process to the end,” Oliver said. “You say it’s going to take x months or years and it has to be done in that time.”

More Authority

Oliver declined to say in the interview whether the rules, some of which will require legislation, would apply to projects that have already been proposed. He said the measures will include giving regulatory bodies such as the National Energy Board more “authority” to keep reviews within specified timeframes.

The government needs to make sure environmental reviews are done in a thorough manner to ensure the country’s energy resources are developed in a “sustainable” way, said Claude Gravelle, a lawmaker for the main opposition New Democratic Party.

“The oil sands are not going anywhere, we’re not going to miss any opportunities,” Gravelle said in a telephone interview.

The government began hearings in January on the proposed Northern Gateway pipeline by Enbridge Inc. to move crude from Alberta’s oil sands to British Columbia’s coast, where it could be shipped to Asian markets. The pipeline has become a flashpoint with environmentalists and Harper’s government.

4,000 Requests

Regulators have received more than 4,000 requests by individuals to testify at public hearings. Environmental and aboriginal groups say the project will increase the risk of an oil spill off the coast of British Columbia. The regulatory panel has said it plans to complete the review by the end of 2013.

The government will be looking more closely into complaints that environmental groups backed with foreign money are seeking to overload the regulatory process, Harper has said. Oliver has mentioned Tides Canada as a group channeling U.S. money to pipeline opponents.

Merran Smith, director of Tides Canada’s Energy Initiative, said in a Jan. 10 statement the “contrived” assertions were a “red herring.”

China could start receiving oil from the Gateway pipeline as early as late 2016 if the company clears regulatory hurdles in two years, Enbridge Chairman Patrick Daniel told Bloomberg News in an interview Feb. 9.

Kinder Morgan Energy Partners LP, the second-biggest U.S. pipeline operator, has said it will decide by the end of March whether to move ahead with a $3.8 billion expansion of its Trans Mountain oil-sands pipeline, the only pipeline currently carrying crude and refined products from Alberta’s oil-sands region to Canada’s Pacific Coast.

To contact the reporters on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net;

To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net; David Scanlan at dscanlan@bloomberg.net

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