Oil and gas leaders respond to Bill C-69 setback, 'disrespectful' McKenna comments

Tim McMillan, CEO of the Canadian Association of Petroleum Producers. Image: Justin Tang/CP Images

CALGARY — The head of the Canadian Association of Petroleum Producers criticized the country's environment minister Thursday for comments he said shows she is “disrespectful” of the energy industry.

Catherine McKenna is wrong when she says the public needs to be protected from the oil and gas business, CAPP CEO Tim McMillan told reporters after announcing an oil production forecast through 2035 that is little changed from the one CAPP issued 12 months ago.

“I’m very troubled with some of Minister McKenna's comments,” McMillan told reporters after presenting the forecast at the Global Petroleum Show conference in Calgary.

“She continues to profile our industry as if we aren't responsible. It's disrespectful and it's not true…I feel their cherry-picking of issues inside this bill to enflame Canadians and then pass that over the industry, and the bill as a whole, is disrespectful to the industry — our industry, other industries and Canadians at large.”

The bill he's referring to is Bill C-69, designed to overhaul the federal environmental-assessment process for major resource projects including pipelines.

Earlier this week, the federal Liberals said they would accept nearly 100 amendments the Senate made to the bill but will reject dozens more.

McMillan said CAPP had proposed 43 amendments it considered “essential” but only three were accepted, adding his group will continue to press for more change as the country heads for a federal election next fall.

McKenna said on Wednesday that conservative premiers, MPs and senators, as well as the oil and gas lobbyists, wanted a bill that would guarantee every pipeline proposed would be approved without protecting the environment.

“They want us to copy and paste recommendations written by oil lobbyists that would block court challenges, that would make it easier for future governments to ignore the views of Indigenous Peoples,” she said.

Industry reaction to the rejection of amendments has been overwhelmingly negative, with many saying the bill will still make it unlikely any new pipeline project will be proposed despite the accepted changes.

“This wasn't some Christmas wish list of our industry,” said Alex Pourbaix, CEO of oilsands producer Cenovus Energy, after speaking at the show.

“This was taking a bill that was really, really damaging to our industry and getting it to a place where, although it was still a real problem, it was something we felt we could live with.”

In a statement Thursday, Suncor Energy CEO Mark Little said the bill “jeopardizes future development and does not restore investor confidence in our industry and country.”

Tim McKay, president of Canadian Natural Resources, said in an email it would make the regulatory process more complicated, time-consuming and “legally vulnerable.”

Imperial Oil CEO Rich Kruger said that Bill C-69 in its current form, if passed, will impact its future development decisions, including its 75,000 bbl/d Aspen oilsands project.

The company gave the project the green light in November 2018 but announced it would slow construction shortly after due to impacts of the Alberta oil curtailment and overall regulatory uncertainty.

"When I speak with our investors, domestic and abroad, they tell me Canada’s regulatory uncertainty has a negative effect on how they view political and regulatory risk. Many increasingly say they no longer view Canada as an attractive place to invest. This ultimately impacts not only investment in our economy, but also people’s jobs and personal growth opportunities,” Kruger said in a statement.

"This sad state is one of the reasons Imperial decided to slow down our $2.6B investment in the Aspen oil sands project earlier this year. Should Bill C-69 become law in its current form, we will unfortunately need to deeply consider any and all future investment growth opportunities."

If Bill C-69 is approved in its current form it will reduce certainty for industry in the regulatory process but it would be a step backwards to simply rip it up, said Martha Hall Findlay, CEO of the Canada West Foundation think-tank.

In a presentation at the conference, she said the bill with the Senate's amendments offered many improvements over regulations adjusted by the Stephen Harper government in 2012 and urged the federal Conservatives, if they defeat the Liberals this fall, to change the bill, not throw it out.

In its forecast, CAPP predicts Canada's oil production will rise to 5.86 million barrels per day by 2035, up slightly from 5.6 million bbls/d predicted a year ago, but representing a 27 per cent increase from the average of 4.59 million bbls/d in 2018.

Overall capital investment is expected to reach $37 billion this year, about half of the $81 billion spent in 2014 before the current downturn began.

This year, capital spending in the oilsands is set to decline for a fifth consecutive year to roughly $12 billion, approximately one-third of the investment seen in 2014, the forecast says.

© 2019 The Canadian Press, with a file from JWN

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