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Energy sector looking for aid and regulation delays as throne speech looms

Canada’s fossil-fuel sector is looking to this month’s throne speech for signs the federal government is not throwing in the towel on oil and gas.

At the same time Canadian climate strikers are threatening mass protests if the same speech doesn’t show a plan to eliminate all greenhouse-gas emissions produced by human activities in less than a decade.

Screen Shot 2020-06-08 at 5.12.34 PMTim McMillan, president of the Canadian Association of Petroleum Producers, says Prime Minister Justin Trudeau can use the throne speech Sept. 23 to send a signal to international investors that Canada’s oil and gas industry is a solid opportunity for investment.

He says the planned clean-fuel standard meant to force oil and gas companies to emit less greenhouse gas is out of whack with Canada’s main competitors for that investment and if the new standard isn’t postponed, many companies will simply not be able to comply.

Earlier this year Ottawa scaled back the requirements of the standard over the first few years to give companies more time to recover from the economic crisis caused by COVID-19, but McMillan says that is not enough.

Trudeau is also, however, facing pressure from thousands of Canadian youth in the Climate Strike Canada movement who say the throne speech is Trudeau’s “last chance” to convince them he really is a climate-change leader.


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New rules to speed up approvals for exploratory drilling off Newfoundland

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The Canadian government is moving ahead with new rules it says will speed up approvals for exploratory oil and gas drilling off the east coast of Newfoundland, but conservation groups are warning the changes undermine environmental protections.

Natural Resources Minister Seamus O’Regan issued a statement last week saying the new regulation will improve the efficiency of assessments while upholding the “highest standards” of environmental protection.

“Our government recognizes that Newfoundland and Labrador’s ability to rebound from the COVID-19 pandemic will depend largely on a strong, resilient and innovative offshore,” O’Regan said.

Three environmental groups have launched a federal court challenge, arguing exploratory drilling off Newfoundland will now be green-lit without proper environmental assessments.

The Ecology Action Centre, Sierra Club Canada Foundation and World Wildlife Fund Canada argued earlier this month that the science behind the new “regional assessment” or RA process is flawed.

Lawyer James Gunvaldsen-Klaassen, whose firm Ecojustice is representing the groups, argued that the regulation “flies in the face” of the purpose of environmental scrutiny under the new Impact Assessment Act.

The court later decided the case can proceed to a judicial review, but denied the group’s request for an injunction.

“The federal government stated that it intended to use the flawed RA and a loophole in the … legislation to allow for a broad exemption of all future offshore exploratory drilling in the region,” the groups said in a statement Thursday.

“Left unchallenged, this would set a poor and dangerous precedent for regional assessments, which could otherwise be a promising new mechanism under the Impact Assessment Act.”

O’Regan said the new regulation will help the oil and gas industry remain competitive because it will provide investors with “more predictability and certainty.”

As well, O’Regan said the regulation strengthens conditions to ensure projects adhere to environmental protection standards.

The Newfoundland and Labrador government said the new assessment process will shorten timelines to as little as 90 days. The province said the existing process can take up to 900 days.

“This is a significant improvement over the previous process which caused considerable delays,” the province said in a statement.

Siobhan Coady, Newfoundland and Labrador’s natural resources minister, said the province can now “explore its offshore and hopefully make some great discoveries.”

Provincial officials say the delays started in 2010 when the responsibility for offshore environmental assessments were shifted from the Canada-Newfoundland and Labrador Offshore Petroleum Board to the Canadian Environmental Assessment Agency.

According to the Canadian Association of Petroleum Producers, environmental assessments for exploratory wells in other countries take far less time to complete: 44 days in Australia; 96 days in the U.S. Gulf of Mexico; 79 days in Norway; and 18 days in the U.K.

During a recent industry conference in St. John’s, Coady warned that with oil prices plummeting, companies are closing and jobs are being lost.

In mid-March, Equinor and Husky Energy announced the decision to defer the Bay du Nord offshore development project due to falling oil prices and the economic downturn as countries responded to the novel coronavirus.

In addition, Hibernia has recently suspended its drilling program, the Terra Nova refit for May has been suspended and the West White Rose project has been deferred.

The Newfoundland and Labrador Oil and Gas Industries Association has said in order to remain competitive with Norway, the United Kingdom and Australia, the federal government needs to provide a renewed program of “incentives for offshore exploration.”

The offshore industry accounts for close to one third of the province’s GDP, 13% of wages and 10% of all jobs.