Kenney election promise could spell trouble for in-situ oil sites

EMMA GRANEY

Updated: April 24, 2019

In-situ projects extract bitumen too deep to be mined, generally by using steam. They comprise around 80 per cent of Alberta’s oil reserves.

But Kenney’s pledge to nix the cap will change all that, making in-situ sites subject to federal review processes, rather than those of the Alberta Energy Regulator.

These pipelines carry steam to Suncor's Firebag in-situ operations north of Fort McMurray.

POSTMEDIA, FILE

Jason Kenney’s election promise to remove the oilsands emissions cap will likely have far-reaching consequences for Alberta’s in-situ oil projects.

It all stems from federal Bill C-69, which would overhaul Canada’s energy regulatory process and change the rules for project approvals.

In-situ projects extract bitumen too deep to be mined, generally by using steam. They comprise around 80 per cent of Alberta’s oil reserves.

Federal Natural Resources Minister Amarjeet Sohi told Postmedia Tuesday his government had assured Rachel Notley that in-situ sites would not be subject to C-69 — and therefore federal regulations — as long as the NDP’s 100-megaton emissions cap was in place.

But Kenney’s pledge to nix the cap will change all that, making in-situ sites subject to federal review processes, rather than those of the Alberta Energy Regulator.

Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers, is unimpressed.

The emissions cap wasn’t going to affect the industry for years, if not decades, he told Postmedia, adding the province is the best regulator.

“I think it’s inappropriate for the federal government to use that as a lever to put the responsibility into a regulator that doesn’t have the expertise,” he said.
Consultations continue

Canada’s Senate is in the midst of nationwide hearings on Bill C-69.

The Alberta NDP government had a ream of concerns with the bill, and both Notley and her environment minister Shannon Phillips took those worries to Ottawa.

One of their problems was the bill’s perceived over-reach into provincial jurisdiction. Sohi said Tuesday his government “gave an assurance” to Notley that wouldn’t be the case.

“(Notley’s) other concern was that as long as the cap remains on emissions, in-situ projects should not fall under C-69, and we gave her assurance on that,” Sohi said.

And if the cap is lifted, as Kenney has promised?

“Then in-situ will be part of Bill C-69,” he said.
‘Federal sucker punch’

Whether Kenney knew of the implications for in-situ sites before he promised to lift the emissions cap is unclear.

Christine Myatt, spokeswoman for the premier-designate’s office, wanted to know when NDP and federal Liberals agreed to a deal.

“It’s well known the issues with Bill C-69 go far beyond whether in-situ projects are exempted. According to experts, the legislation makes it unlikely that new pipelines can be built,” Myatt said in an email.

“The incoming UCP government looks forward to a productive discussion with the federal government on these key issues.”

Kenney has made no secret of his dislike of the bill.

During the election campaign he repeatedly vowed to launch a constitutional challenge to Bill C-69, saying it would prevent the building of future pipelines.

“Bill C-69 is a federal sucker punch to an already reeling Alberta economy,” he said.