Environment Committee on Nov. 22nd, 2011

[Nancy Malone]

Yes.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

So I'd ask you the question, then, Ms. Malone, in terms of.... And I have a strange notion; I think we should look at environmental outcomes. I know a lot of people think it's all about process, but to me it's all about environmental outcomes like water quality and so on.

Given a focus on environmental outcomes, does the CEAA process provide any value added in terms of environmental outcomes, given that environmental outcomes are planned when the project is being designed?

[Nancy Malone]

Yes, it does allow for having the appropriate people asking the right questions in terms of looking at “Here's the process now, but let's look ahead”, but not.... Again, our members not being directly involved in those sorts of conversations, our presumption is that's being taken care of by these operators; their approvals wouldn't go forward if that hadn't been considered.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

Right, okay.

[The Chair, Conservative, Mark Warawa]

Your time has expired. Thank you.

Next, Ms. Leslie, for six minutes.

[Megan Leslie, NDP, Halifax, NS]

Thank you, Mr. Chair, and thank you for the fact that we're going to end a little early to discuss committee business concerning my motion that the minister appear at this committee.

Professor Doelle, we've heard quite a bit of discussion here at committee about all-in versus lists, and we have our federal environment minister going off saying that, you know, legislation is being drafted about streamlining large projects, because small projects actually don't pose the risk; it's large projects that pose the risk, so we need to have this list system versus all-in, but then at the same time we need to streamline the big projects. It makes me wonder why we're even doing a seven-year review if they're already drafting legislation.

But this is my question to you: would you be able to comment on the idea of all-in versus lists, and do you agree with this notion that large projects are the only projects that should have EA?

[Prof. Meinhard Doelle]

Dealing with the list issue first, this has been a big issue every time there's been a discussion about the act. It was a big issue during the original development of the act and the last review. Essentially, it's about how you deal with new types of projects that come along. The “all-in unless excluded” approach is the safer approach. It's the approach that says the kinds of projects we're forgetting about, that may come along after we develop this list, should be in until they've come to the attention of regulators, and then they can look at whether they should be excluded. I think this process has worked very well.

If you now move to a list, then you have to ask yourself how you ensure that important projects that should be subject to an environmental assessment don't fall through the cracks, either because we didn't think about them or because they came along afterwards. In my presentation I gave you a list of five or six different types of projects that have come along in Nova Scotia in the last decade. If someone had developed a list 10 years ago, none of those would have been on it.

That's on the list; what was the other?

[Megan Leslie, NDP, Halifax, NS]

A lot of the testimony we have is about eliminating, eliminating. So what about this notion that big projects are the issue, so we should focus on big projects and fast-track them?

[Prof. Meinhard Doelle]

In my view, this is where the question about self-assessment really is at the heart of this, to some extent, because the idea behind the screenings, in particular, is that we should encourage federal decision-makers to think about the environmental implications of the decisions they're about to make.

I think the problem with screenings isn't what's in the legislation, but the way they've been implemented. So you end up with screenings for small projects. It's not wrong to do a screening for a small project, but then, especially when they're non-government proponents, often they have to spend hundreds of thousands of dollars getting consultants to prepare thousands of pages of screening reports or environmental impact statements. I think that's the problem.

When you look at the legal requirements for screening in the act, all they really say is to think about the environmental implications of the decision you're about to make. If we get back to the core of that and the kinds of issues that are listed in the act, I think you can design a screening process that does that for small projects without being burdensome, without causing delay.

I agree that we are wasting a lot of resources on some screenings that are being done for small projects, but the answer in many cases is not to eliminate them from the assessment; it's to have an appropriate assessment designed for those projects.

[Megan Leslie, NDP, Halifax, NS]

Thanks.

My next question is about the written testimony that you submitted. You talked about inefficiency that serves no effectiveness or fairness purpose, but you say that the problem is that, throughout Canada, there are different procedures, different terminology, etc. One solution we've heard is to eliminate federal EA in some way and in some situations, if there's adequate provincial, etc.

I'm wondering if you agree with that, or if the solution is really just an arm's-length agency that can handle EA in the way you suggested.

[Prof. Meinhard Doelle]

An arm's-length agency in itself doesn't solve the problem. You then still have multiple jurisdictions that have different processes that will apply to a project. You have to take it a step further, and that is, there needs to be an effort to harmonize the processes and to look for opportunities to coordinate better between the various jurisdictions.

I'll just give you the example of transportation of dangerous goods. That's an area where we've done that very effectively. The provinces still exercise their jurisdiction over transportation of dangerous goods within their province, but they have coordinated the effort with the federal government, who has jurisdiction over interprovincial transportation. There are consistent labelling and rules on this.

That's the kind of thing I think we need on EA, but that's a major undertaking. In terms of looking for improved efficiency without compromising effectiveness and fairness—and actually improving in all three areas—that is the holy grail, I think.

[Megan Leslie, NDP, Halifax, NS]

Thank you.

[The Chair, Conservative, Mark Warawa]

Thank you. Time has expired.

Mr. Toet, you have six minutes.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

Ms. Malone, you gave some statistics at the beginning of your presentation in regard to the number of wells that had been drilled. The number in 2010 is about half of what it was in 2006. You mentioned the really low number in 2009.

Has this strictly been an economic issue, or is there an aspect of the environmental assessment timelines that has also had an impact on this?

[Nancy Malone]

In 2009 it certainly was global. The recession was the big impact. Actually, what we are seeing in terms of the cut in well numbers is the fact that we spend a lot more time on each well now. That's due to the long reach—the horizontals and the directional drilling we do.

In 2006, with all of the strong natural gas prices, natural gas was very available at very shallow depths. It was quite easy to go drill a well. Some of our rigs could move quickly, and do two wells a day. It was just a function of what was in demand at the time, as natural gas was the in-demand product. Now, with the weaker prices, oil is in demand.

In Canada, we've retrieved all of the so-called easy resources. We still have a great abundance of resources, but they require more work--things like these long-reach wells, the fracked wells, and that sort of thing. It just takes more time. We'll never see 23,000 wells again. Honestly, we have the equipment to do it, but we definitely don't have the people, the skilled labour to do it. At the moment, we are struggling to make sure we have appropriate skilled labour on the rigs this winter, so that we can fulfill our commitments.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Okay.

You also mentioned that the length of timelines was actually having an adverse effect on the ability of your clients to finalize some projects. Essentially, I got the impression that some projects were not going forward because they could not get them done in a timely fashion, and that their end clients could not fulfill their obligations. Is that effectively what has happened within the drilling?

[Nancy Malone]

We are typically conventional drilling and servicing, so that would be anything outside of oil sands. However, our members do have the ability to work the in situ work around Fort McMurray, and Lloydminster, and that sort of thing. If they are experiencing any delays in that, then yes, there is a window there to lose out on opportunity. A lot of that work can only take place in the first quarter of each year, even just in January and February, because, in order to access those regions, we need it to be frozen. You have a time window, and then, obviously, a sort of a market window that passes quickly.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Are those windows being missed at times because of assessment timelines or are there other reasons for it?

[Nancy Malone]

I'm afraid I don't know. That would be a question for the operators. We just know that there are plans, we hear about them, and then they never truly come to fruition. What made that happen could have been lack of financing or it could have been assessment timelines.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Okay.

This was touched on a little bit by Ms. Leslie, the all-in approach or the list approach. I don't know whether you have any feedback from your clients with regard to whether they have a preference to see a list approach or an “all-in unless” approach. Have you had any contact with them on that basis?

[Nancy Malone]

I have not, no. That would be the first I've heard federally of that idea.

In Saskatchewan right now there's an extensive review of their environmental code going on, and that's certainly a thought that's being put forward, to provide a very structured set of processes that people can follow. But from their perspective, they're looking at being able to focus on the larger projects. They want to have a process in place for the smaller ones to follow, and I guess you could consider that a self-assessment or self-guiding process, but they're looking to focus on some of the larger projects in Saskatchewan.

In terms of oil and gas and more broadly, no, we've not had any conversations on that.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I have a question for Professor Doelle.

Under CEAA currently, you were talking about some of the small capture projects and some of the concerns with those. Are you familiar with one of the projects, an expansion of a maple syrup operation that required a federal environmental assessment because it was funded by the Atlantic Canada Opportunities Agency? Are you aware of this particular project?

[Prof. Meinhard Doelle]

I'm not familiar with the particular project, no.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

If a maple syrup bush is being expanded, do you feel it should be subject to an environmental assessment under CEAA? In your opinion, is that the type of project that would fall into the “all-in unless” approach?

[Prof. Meinhard Doelle]

I'm sorry, what is being expanded?