TORONTO — Canada's oil and gas sector is hopeful the federal government will live up to its budget-day pledge to speed up the time it takes to build major infrastructure projects.
The Liberal government announced last week that it will unveil a plan aimed at speeding up the federal permitting process for major infrastructure projects before the end of the year.
The promise was part of a federal budget that also contained a host of tax credits and incentives for clean electricity, hydrogen, critical minerals and other technologies the government believes Canada must invest in to meet its international climate commitments.
But for many in the Canadian oil and gas sector, it's that promise of swift regulatory approval for new projects that remains key.
“It’s still about permitting," said Enbridge Inc. chief executive Greg Ebel, at an annual oil and gas conference taking place this week in Toronto.
"We can put all the incentives you want in place. Whether it's a production credit or an investment tax credit, you can't use the stuff if you can't build (the project)."
The oil and gas sector is Canada's heaviest emitter of greenhouse gases and is under intense pressure to lower its carbon footprint.
Industry executives say doing so at a pace that's satisfactory to the federal government will require billions of dollars in investment in new infrastructure — including a proposed $16.5-billion carbon capture and storage transportation line that a consortium of oilsands companies known as the Pathways Alliance is considering building in northern Alberta.
The oil and gas industry has successfully lobbied for an investment tax credit for carbon capture and storage and has also received a government commitment to de-risk such projects by essentially guaranteeing a fixed price of carbon for operators.
While it has yet to make a final investment decision, the Pathways Alliance — whose membership consists of Canadian Natural Resources Ltd, Cenovus Energy, ConocoPhillips Canada, Imperial Oil, MEG Energy and Suncor Energy — said it intends to apply for regulatory approval for its carbon pipeline as early as this fall.
But Rhona DelFrari, executive vice-president of Cenovus, said if the group is to have any hope of meeting its 2030 emissions reduction goals, its project will need to encounter a smooth and painless permitting process.
"We can't hit any targets if it's going to take years, and then you could end up in the courts," DelFrari said.
For much of the past decade, Canada's energy sector has complained of lengthy permitting timelines and regulatory uncertainty slowing down everything from major oil pipeline projects to the development of a liquefied natural gas (LNG) industry in this country.
Perrin Beatty, CEO of the Canadian Chamber of Commerce, said pipelines, mining, and infrastructure development in Canada have a history of falling into a gauntlet of regulation, “where projects drag year after year after year.”
“It causes people to write off their investment and to walk away," Beatty said in an interview last week.
"In many instances, an early ‘no’ would be better than an indefinite ‘maybe’ that ties up your capital for many years.”
South of the border, companies have raised similar complaints. U.S. President Joe Biden has pledged to improve communication and co-operation among federal agencies to accelerate permitting and environmental reviews in that country.
Derek Evans, CEO of MEG Energy, said the oil and gas industry is committed to getting to net-zero greenhouse gas emissions by 2050. But he said how fast that occurs depends on a number of factors, including permitting speed. And he said 2030, by which Canada has pledged to cut its emissions by at least 40 to 45 per cent below 2005 levels, is not far away.
"The question is, 'how fast do you want us to go?'" Evans said. "But we've got to get started. The clock is ticking."
— With files from Christopher Reynolds
This story by The Canadian Press was first published April 5, 2023.
Amanda Stephenson, The Canadian Press
