Trudeau to Lay Out Predictable Timelines for Pipeline Reviews

(Bloomberg) -- Justin Trudeau wants to make reviews of pipeline and other major projects run on time as Canadian producers struggle to get oil to market.

The federal government will propose new rules for regulatory vetting of all major development projects in the new year, shortly after parliament reconvenes on Jan. 29, Natural Resources Minister Jim Carr said.

Trudeau instructed his ministers two years ago to look into changing how environmental impact reviews are conducted, as well as modernizing the country's energy regulator. The new regime “move us into a better place of predictability, timelines and certainty, increasing public confidence among Canadians in the regulatory framework,” Carr said in a telephone interview. “It is a goal that the timelines be predictable and they be reasonable, and we understand these are very important for investors.”

Landlocked resources are a persistent problem for Canada. The price of its heavy crude has slumped amid an extended shutdown of TransCanada Corp.'s Keystone pipeline that created a glut of supply at storage sites, with railways unable to pick up the slack. Meanwhile, new projects -- particularly pipelines -- tend to face lengthy regulatory delays and legal uncertainty. 

“We are working very hard to demonstrate they will be more predictable and they ought not to be any longer,” Carr said.

Kinder Delay

One of the major projects in limbo is Kinder Morgan Inc.'s Trans Mountain expansion, which won federal approval in late 2016 but is now delayed up to nine months.

“We're hopeful that there'll be no further delays,” Carr said. “We are committed to the construction of the Trans Mountain expansion project and we are working to ensure that the National Energy Board has all of the resources it needs to be sure that the conditions are met.”

The rights of Canada's indigenous peoples are an element in reviews of major energy projects. The new rules will spell out a thorough understanding of what indigenous consultation is required, including at what stage of a project that should begin, Carr said.

Asked about falling prices for bottle-necked Canadian crude, Carr said the government has no plans to intervene but expects a trio of approved pipelines -- Trans Mountain, TransCanada's Keystone XL project and Enbridge Inc.'s Line 3 -- to boost capacity and reduce reliance on rail.

“We know there are fluctuations” in oil prices, Carr said. “Government has no capacity, or very little capacity, to control these markets -- and we don't seek to.”

Softwood Spat

Carr has also been one of the Canadian lawmakers handling the softwood lumber dispute with the U.S. -- specifically, the domestic response. He said the country has “made a lot of progress” in supporting its industry after the U.S. imposed tariffs, but persistently high lumber prices have mitigated the impact.

“They're not hurting as badly as they would if prices were lower than they are, so that's been very helpful, but we know that there will be some job losses,” he said. “We're trying to minimize that.”

In November, the government requested a dispute panel review of U.S. softwood duties under the North American Free Trade Agreement. Canada, the U.S. and Mexico are in the midst of renegotiating the decades-old pact, which President Donald Trump has repeatedly threatened to scrap.

To contact the reporter on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net.

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Stephen Wicary, Carlos Caminada

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