I would be happy to. Thank you.
Good afternoon, honourable chair and members of the committee. My name is Terry Abel. I'm executive vice-president with the Canadian Association of Petroleum Producers. Joining me today are Mr. Paul Barnes, who is the director of our Atlantic Canada and Arctic offshore, and Patrick McDonald, who is director of climate and innovation.
We are very appreciative of the opportunity to address the committee today and provide some of our experience and thoughts that might help inform your review of Bill C-69.
Hopefully, many of you know that CAPP and its members are responsible for producing around 80% of all the natural gas, natural gas liquids, crude oil, and oil sands across Canada, including offshore resources. Our industry is the largest single private sector investor in Canada. In 2014, it invested at a peak of $81 billion and at more like $45 billion in 2017. Collectively, we employ well above 500,000 Canadians from coast to coast.
Our offshore oil and gas and natural gas projects, located generally quite a way offshore—200 to 500 kilometres offshore in Newfoundland and Nova Scotia—have brought tremendous benefits to Newfoundland and Nova Scotia over the years and will continue to do so for some time.
As you know, the International Energy Agency continues to project that energy demand will grow worldwide by more than 30% by the year 2040, and growth in that demand will happen in both oil and natural gas, with hydrocarbon resources continuing to make up the lion's share of energy demand across the country, although renewables are growing substantially.
CAPP believes that Canada is well positioned to become the supplier of choice for oil and natural gas resources, given our world-leading responsible development practices and the fact that we have some of the largest and highest-quality reserves of oil and gas in the world. It's therefore imperative that Canada remain competitive with other oil and gas-producing jurisdictions; otherwise, Canada loses not only the opportunity to generate economic value from this industry, but also the consequential global reductions in GHG emissions that flow from Canada's being a more responsible producer of those resources.
I am going to introduce my comments today focusing on the competitiveness of our industry and on some aspects of the bill that can create uncertainty and further erode the global competitiveness of the industry. I'll touch on such things as transitional provisions, timelines, early planning, review panels, and regional strategic assessments.
We understand that the government's stated objective is to restore public trust in its environmental and regulatory review processes, something we absolutely share as an objective. We also want to ensure, however, that any changes restore confidence in the investment community.
Our industry is very challenged these days. There is a highly competitive global competition for capital resources, and Canada needs to remain competitive, if we're going to bring capital into Canada. Unfortunately, today Canada is attracting more uncertainty, not more capital, and we will continue to lose investment and jobs if we do not have a system of clear rules and decisions that are final and can be relied upon.
I'd like to point out that a 2016 WorleyParsons study of environmental assessment practices worldwide observed that while Canada has an EA process that is one of the most thorough and comprehensive, it also currently has “one of the most expensive time, and resource consuming EA processes in the world”.
Unfortunately, CAPP and the investment community today see very little in Bill C-69 that will improve that status. A simple example of this growing uncertainty is found in the transitional provisions within the draft impact assessment act. Current provisions require that assessments initiated under CEAA 2012 but not yet complete would generally have to continue and be completed using new legislation and rules. Specifically, the language in the bill that might allow an assessment to be completed under the current legislation, CEAA 2012, is actually very subjective and does not provide clear certainty as to which process will apply. If the intent of those provisions was to have those started in 2012 continue, we would argue that you could make this far clearer and more certain within the current language.
Requiring a new proponent, if that is the intent, to follow the new regulatory process midstream would run the risk of essentially taking processes back to the starting line. For example, we would point to offshore exploration drilling programs. There are four currently in Newfoundland. We see substantial risk that all the work undertaken today could be deemed incomplete. Therefore, they may have to restart and follow an entirely different process, which would add more time and more uncertainty for our investment community.
We simply propose that the government confirm that all projects in flight within federal, provincial, or territorial processes not be revisited under the new legislation.
Madam Chair, CAPP supports maintaining legislated timelines that we see both in CEAA 2012 and within proposed Bill C-69. However, it's not evident that overall, the regulatory review timelines will be any shorter than the current process. With the addition of early planning and no clarity regarding the time frames for review and information requests, and a number of opportunities sprinkled throughout the legislation to extend those timelines, we and the investment community generally conclude that we only see an increase in timelines overall.
We fully support the concept of early planning. I would note that it is normal practice by CAPP's members and our industry in general to engage early with stakeholders that may be impacted by proposed developments. We support the government's involvement in a more formalized process of early engagement as it provides an opportunity to get an early understanding of issues and clarity for all. It also gives stakeholders an opportunity to address issues that we often find come up in our project reviews that actually have very little to do with the project. They're much broader in nature.
For early engagement to be effective, however, all parties must be committed to the process and held accountable to meaningfully engage and honour timelines and their respective roles. We believe that without setting clear expectations for the stakeholders, industry, and government, the commitment to, and the introduction of, an early engagement or early planning process is likely to continue indefinitely and do nothing to support timelines improvement.
CAPP believes that, should the proponent and the agency at the end of the process not be able to agree on the scope of an EA, there needs to be some mechanism to actually bring discipline and closure to that process and actually let an EIA continue.
I'd like to flag something very specific to our offshore in my final comments. The way it's currently written, all offshore-designated projects would require a panel review. With that panel review come timelines that are at least twice that of the review by the agency. We do not believe there's any justification for a process that would effectively double the timelines, which we would expect would be at least four years, particularly as the potential effects of offshore oil and gas projects are well understood.
We have had numerous environmental assessments completed and reviewed in Canada both by CEAA and the offshore boards and decades of environmental effects monitoring in Canada as well as internationally that can contribute to practices that are pretty much standard at this point and are adopted in all jurisdictions across the world.
It's our view that a review panel that combines the experience and expertise of both the impact assessment agency and a specialized regulator, such as the offshore petroleum boards, should actually be able to decrease the regulatory review time required, not double it, as would currently be interpreted with the way the legislation is written. CAPP recommends that the requirement for offshore operations to require a review by panels be removed.
Our industry is also very supportive and sees the benefits of regional impact assessments as are enabled under the draft legislation. We note that they can include such benefits as improved environmental effects assessment and cumulative effects assessment. They would probably help a lot with stakeholder fatigue by not having to do the same things over and over again, and should afford some regulatory consistency and efficiency.
This approach is something that's used internationally. We would point to jurisdictions, such as Norway, that have already used that.
We continue to support the idea of regional impact assessments, and we recommend that, if we're going to go that route, a list of the completed and accepted assessments should be maintained and should ultimately form part of exclusion criteria for the project list that's going to be developed as well.
We believe it can be a powerful tool provided Canada, the provinces, and the territories, work together to complete assessments. However, as currently written, in Bill C-69 we really see no mandated timelines, no confirmation of the inclusion of provinces or life-cycle regulators, and really no guarantee that the process will be successful or will actually be utilized within the assessment process that Bill C-69 talks about.
I will wrap up quickly here, Madam Chairman.
CAPP again thanks you for the opportunity today. We urge you to carefully consider some of our feedback today, and we recommend changes that will resolve investor confidence, help Canada fully realize the significant economic value of our industry, and ensure the resulting global environmental benefits that flow when Canada is the supplier of choice.
Thank you again.