Canada is ‘squandering’ its energy future with pipeline impasse, warns Enbridge CEO

As a Senate committee considers a raft of changes to retool Bill C-69, the head of pipeline giant Enbridge Inc. worries Canada is fumbling away an energy opportunity.

The two issues are distinct, but connected.

A drop in oilpatch investment over the past two years is closely tied to the pipeline bottleneck and ongoing challenges in Canada to build energy infrastructure.

Without enough take-away capacity — and with provincial production limits now in place to deal with a congested oil transportation network — industry spending is constrained.

Without major changes to Bill C-69, which will change the way Ottawa assesses major energy projects, it’s questionable whether any new pipeline projects will even be proposed in the future.

“The topic of the day is whether we can build pipelines in this country,” Enbridge CEO Al Monaco told shareholders at the company’s annual meeting this week.

“There is no reason that we shouldn’t be able to pursue energy exports and global emission reductions at the same time.

“Yet, we are squandering this opportunity — there is no doubt about that — while our largest trading partner across the border capitalizes on the same advantages.”

During his speech, Monaco catalogued the factors that should be propelling growth and jobs in the country’s energy sector today.

Canada has massive supplies of oil — the third-largest reserves in the world — and natural gas in the Montney and Duvernay formations.

The cost of producing these resources has fallen sharply. For example, Canadian Natural Resources reports operating costs at its Horizon oilsands operations have dropped from more than US$40 a barrel to $15 in the past five years.

As the world focuses on decarbonizing, energy demand is growing.

On the environmental front, greenhouse gas emissions per barrel from the Canadian industry are falling, although total emissions for the sector climbed 16 per cent between 2005 and 2016 as overall production increased.

But if Canadian products, such as LNG, can displace higher-emitting forms of energy — most notably coal — it would help lower global emissions.

The shale revolution in the United States has changed investment patterns, no doubt.

While the U.S. is becoming the world’s largest energy producer, Canada is still grappling with long-standing transportation issues.

“Investment in Canada is stymied,” Canadian Natural Resources president Tim McKay told reporters Thursday after the company’s annual meeting.

“It is very difficult for investment in Canada when you have regulatory uncertainty, like Bill C-69, and a system where market access doesn’t exist.”

Canadian Natural Resources Ltd. chairman Murray Edwards, left, and president Tim McKay prepare to address the company’s annual meeting in Calgary, Thursday, May 9, 2019.THE CANADIAN PRESS/Jeff McIntosh ORG XMIT: JMC101

And that brings us back to the federal Impact Assessment Act.

The Senate committee began wading through more than 100 amendments Thursday to revise the proposed legislation, better known as Bill C-69.

The bill will transform the way major energy projects are assessed in the country, examining a development’s effect on the environment and Indigenous communities, and its health, social and economic impacts.

The federal Liberal government maintains these changes are needed to restore confidence in the review process and create certainty for industry.

But groups such as the Canadian Energy Pipeline Association (CEPA) contend the legislation is onerous, and filled with vague policy objectives.

During Senate committee hearings last month, Monaco assailed the bill for extending the timeline for project reviews, expanding the decision-making authority of federal ministers and eroding the independence of the regulatory process.

Changes proposed by Conservative and Independent senators, if adopted, would significantly alter the legislation, reducing timelines and making economic considerations a key test.

Alberta Senator Paula Simons, who is on the committee reviewing Bill C-69, said the members are now searching for common ground.

“This was flawed legislation, but what you do with flawed things is you fix them,” said Simons, a former Edmonton Journal columnist.

There’s not a lot of time to get the amendments passed before Parliament is slated to wrap up on June 28.


In Alberta, new Energy Minister Sonya Savage remains skeptical the bill can be fixed.

Savage quipped she was hopeful, upon hearing news Thursday of a dumpster fire burning on Parliament Hill, that the legislation was part of the blaze.

Even if significant changes are made, the amendments still need to be approved by the Trudeau government. The legislation also infringes upon Alberta’s Constitutional authority over natural resource development, Savage said in an interview.

“It’s pretty hard to redeem Bill C-69. I mean, it’s so fundamentally flawed,” said Savage, who worked for more than a decade in the energy industry as a CEPA executive and Enbridge lawyer.

“Anything short of all of the amendments coming from the industry and . . . Alberta (being adopted), anything short of that is going to be insufficient — and we will be launching a Constitutional challenge immediately if it passes.”

Industry players are more optimistic.

CEPA chief executive Chris Bloomer said the raft of proposed changes in the upper house, along with vocal opposition from several provinces, has underscored the need for the bill to be overhauled.

“This is a positive sign,” he said. “I don’t think the Senate or the House can ignore the fact there is a very consistent voice that this bill has to be fundamentally changed.”

The spotlight is now on the Senate and the federal government.

In Calgary, federal Natural Resources Minister Amarjeet Sohi insisted this week the Trudeau government is prepared to examine ways to improve Bill C-69, but he wouldn’t render an opinion on the amendments.

But the Edmonton MP insists getting legislation passed by the time Parliament wraps up its work next month — before the fall election — remains critical.

“Not moving forward on this legislation will create further uncertainty for the industry,” he said.

Is flawed legislation better than no legislation at all? Can a deal be reached within the next seven weeks to make everyone happy?

I wouldn’t bet on it.

But time is running out to improve Bill C-69 and, as Monaco puts it, an energy opportunity for Canada is at risk of being frittered away.

Chris Varcoe is a Calgary Herald columnist.

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