OTTAWA — The Senate passed into law two controversial natural resource bills Thursday evening, just one day after it quietly passed a third bill that reinforced a ban on offshore oil drilling in the Canadian Arctic, quashing any future oil and gas development in the region.
Bill C-48, which would legally enforce a moratorium on oil tankers in northern B.C., is now set to receive royal assent after it was accepted at third reading in the Senate late Thursday. Bill C-69, which would overhaul the environmental review process for major projects, also passed a third reading. Their passage enshrines the bills in Canadian law, ending more than a year of fierce opposition from the natural resources sector and some provinces.
“This phase of the battle is over,” Independent Sen. Doug Black, who was opposed to C-69, said in a final speech before the final vote on the bill.
Both bills are widely viewed as a counterweight to the Liberal government’s decision on Tuesday to approve the Trans Mountain expansion pipeline, part of an effort by Prime Minister Justin Trudeau to accommodate both environmental and economic interests.
The approach has been met with some criticism on both ends. Industry lobby groups applauded the approval of the Trans Mountain expansion, which could cost as much as $9.3 billion by some estimates, but said it didn’t go far enough to satisfy its concerns over C-69 and C-48.
Environmental groups and some First Nations communities have supported the bills, but have vehemently opposed the pipeline expansion. On Thursday the Coldwater Indian Band joined two other First Nations communities in denouncing Ottawa’s approval of Trans Mountain, saying the project threatened to contaminate a critical freshwater aquifer near the community. The Squamish Nation and Tsleil-Waututh Nation in B.C. have also promised to appeal Ottawa’s decision through legal means.
The passage of C-69 and C-48 on Thursday could add to doubts that Trans Mountain will meet its summer construction schedule, a delay that would prolong the price discount on Canadian heavy oil that has amounted to billions in foregone revenue for energy producers and governments.
Senators carried out a months-long study of C-69, which oil and gas lobby groups argued would kneecap the embattled energy sector by stopping major new infrastructure projects from being built. The failure in recent years to build major export pipelines like Trans Mountain, Keystone XL and Line 3 has badly damaged investor confidence in the sector, they say, and weakened the broader Canadian economy.
Bill C-48, which puts into legislation a ban on oil tankers docking at communities in northern B.C., was also viewed by some as a targeted attack on Canada’s oil and gas sector.
The Senate passed more than 229 amendments to C-69, the most to any piece of government legislation in decades. The House of Commons rejected 130 of those recommendations, including the majority of industry-inspired changes put forward by Conservative senators. It also accepted 62 amendments and modified another 37.
Bill C-48 was passed with only modest amendments, despite efforts by some senators to create a so-called “corridor” that would allow oil tankers to dock in some designated areas.
Meanwhile, senators on Wednesday passed into law the lesser-known C-88 which, among other things, amends the Canada Petroleum Resources Act to enshrine in legislation a moratorium on offshore oil drilling in the Arctic.
Trudeau in December 2016 announced a moratorium on offshore oil drilling across all Arctic waters, which the federal government enforced not through legislation but by simply rejecting any new bids for licences or exploration permits, effectively shutting down any would-be resource extraction in the region.
The updated legislation now provides the federal government the right to enforce the drilling moratorium based on “the Canadian interest,” but does not explicitly define how the threshold will be met.
Minister of Crown–Indigenous Relations Carolyn Bennett said the prime minster implemented the offshore oil ban as part of a broader belief that the risk of spillage in ecologically sensitive waters was too great.
“He has to consider the risk of a spill,” she said in a Senate testimony June 18.
Some multinational energy companies including Royal Dutch Shell have mulled drilling programs in the U.S. and Canadian Arctic, but have not yet committed major capital toward such efforts due to high exploration and production costs, as well as past regulatory delays.
Senators applauded certain aspects of the bill, which would effectively freeze licences in the North while reimbursing major resource companies that have bought exploration rights in the region that they cannot now execute. Companies with exploration licenses in the Canadian Arctic include Imperial Oil, BP, ConocoPhillips Canada, Chevron Canada and Franklin Petroleum Canada.
Meanwhile, construction of the Trans Mountain expansion could begin as soon as September, according to Ian Anderson, the CEO of the Crown corporation that operates the current pipeline. It could reach completion as early as 2022, he said.
Ottawa approved the project on Tuesday after a Federal Court of Appeal ruling last summer effectively stalled construction of the pipeline.
The federal government purchased the pipeline’s existing assets for $4.4 billion, and now plans to triple its existing capacity to 890,000 barrels per day.
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