Regulatory Competitiveness of Petrochemical Projects in Alberta

Courtesy of Bennett Jones. View original article here.

On June 6, 2017, Brad Gilmour, Head of the Regulatory Department of Bennett Jones, spoke at the Petrochemical Conference organized by the Canadian Energy Resources Institute. As part of the Executive Panel focusing on the perceptions of industry, Mr. Gilmour discussed the overall regulatory competitiveness of Alberta’s petrochemical projects.

Alberta’s petrochemical projects remain competitive from the regulatory perspective due to the well-established provincial framework and expert regulators that understand and have previously considered the entire spectrum of socio-economic, environmental, technical and other complex issues arising in the petrochemical context. In addition, the Alberta Industrial Heartland (AIH) region is uniquely positioned to host large petrochemical projects, as it provides the required infrastructure and facilitates permitting and construction of these projects (e.g., it already has approved air, water, noise and other environmental frameworks, standards and baseline studies). The Government of Alberta has recently implemented the Petrochemical Diversification Program, which will provide $500 million in royalty credits to two petrochemical projects proposed in the AIH region.

At the federal level, the Canadian Environmental Assessment Act, 2012 (CEAA) provides a comprehensive statutory framework for the assessment of designated projects, which may have a significant adverse environmental effect. The Minister of Environment and Climate Change has recently received the Expert Report “Building Common Ground: A New Vision for Impact Assessment in Canada”, which recommended significant changes to the entire CEAA framework. If adopted, these changes could (among other things) significantly increase the scope of federal environmental assessment, alter existing established methodologies for conducting environmental assessments, and result in overlap and duplication with robust provincial assessment processes. Significant changes such as these could result in increased project planning uncertainty and regulatory risk.

The existing environmental assessment process is well-established and involves a thorough review of the broad range of issues at both federal and provincial levels. It allows the regulators to consider and balance all of the competing considerations and interests in order to determine whether the individual project is in the “public interest”. The industry must be able to clearly explain to all Canadians that this multi-year process is managed by expert regulators, and it involves numerous detailed assessments, studies and reports, engages affected parties and provides them with a meaningful opportunity to participate and make submissions.

If project proponents start their public consultation program as early as possible and conduct it in accordance with the applicable requirements, the proposed petrochemical projects could be permitted and constructed in a timely and cost-effective manner. Alberta’s stakeholders are sophisticated and have extensive experience with major infrastructure projects. Public engagement programs need to focus on informing stakeholders about the project and addressing any concerns as they arise throughout the project lifecycle, i.e., from conceptual planning, through operations to decommissioning and reclamation.

To help Alberta’s petrochemical industry succeed from the regulatory competitiveness standpoint, the government should:

  1. align and streamline their existing assessment, review and approval processes and requirements between the federal and provincial levels and within individual departments;
  2. establish review timelines to allow project proponents to properly plan for proposed development; and
  3. allocate more resources to strengthen and build on the existing expertise and knowledge base of the regulatory agencies and tribunals.

Such cooperation and appropriate allocation of resources will ensure that Alberta’s projects are assessed and approved in a timely manner and, as such, could vigorously compete with other Canadian provinces, the United States and worldwide.

Courtesy of Bennett Jones. View original article here.