CAPP: Impact Assessment Law Ruling May ‘Reset’ Canadian Energy Policy

On Wednesday, the leader of a major oil and gas advocacy group stated that the recent Supreme Court of Canada decision, which struck down significant parts of the federal government’s impact assessment law last week, has the potential to reshape the policy direction in the country, favoring energy development.

During a panel discussion following a business group lunch in Calgary, Canadian Association of Petroleum Producers (CAPP) CEO Lisa Baiton said that the federal government has imposed “layer upon layer” of regulation on the oil and gas industry in recent years.

She said the industry has been damaged by a “pancake-ing” of regulations from multiple federal policies, including the promised emissions cap for the oil and gas sector and the recently introduced clean electricity regulations.

Formerly known as Bill C-69, the federal impact assessment law established a number of criteria for evaluating the potential environmental effects of major projects on the federal level.

However, according to Baiton, the legislation was too broad, which increased the level of regulatory uncertainty and made a lot of companies hesitant to make development investments.

The Supreme Court ruled last Friday that the law is unconstitutional because it interferes with provincial authority. Baiton argued that the decision, which was welcomed by business groups across the country, could be a game-changer.

“This changes a lot in terms of resetting the policy landscape,” Baiton said, adding that while her group is optimistic, it is still waiting to see how the federal government reacts.

“It’s a significant shift, but we still need to be vigilant,” she added.

The federal government’s environmental impact legislation, according to Environment Minister Steven Guilbeault, can be improved with a few modified sections.

He has also stated that later this fall, as planned, regulations will be released to limit greenhouse gas emissions from oil and gas production and that these regulations will not be affected by the recent court decision.

However, Baiton expressed optimism, saying that the court’s decision would make it more difficult for the federal government to ignore provincial interests in energy development.

The oil and gas industry, for instance, argues that a harsh limit on the sector’s greenhouse gas emissions would significantly restrict companies’ ability to raise production.

Another major issue, according to Baiton, is the federal government’s clean electricity regulations, which Alberta claims are impossible to implement by the deadline set by the federal government.

“We have significant concerns with the (clean electricity regulations) as proposed,” said Baiton.

“With respect to the oil and gas sector, we are both a large producer and a large user of electricity.”