From Bloomberg

Alberta’s incoming premier is already fighting pipeline law changes that are in the offing.

Jason Kenney’s conservative party swept to power Tuesday in Canada’s oil heartland after a campaign in which he regularly took aim at Prime Minister Justin Trudeau. In his victory speech, Kenney also criticized Trudeau for “imposing new laws that will make it impossible to get pipelines approved in the future.”

A trio of proposed laws affecting pipeline, environmental and oil shipping laws are working their way through Canada’s Senate as Trudeau’s Liberals gear up for an October election, trailing in the polls. The most controversial is known as Bill C-69 — Kenney’s predecessor in Alberta also opposed its current wording, but his election will add pressure to Trudeau to bow to concessions sought by the oil industry.

“I expect to see the federal government make substantial changes to that piece of legislation because they’re needed or the Canadian economy will suffer,” Tim McMillan, president of the Canadian Association of Petroleum Producers, told reporters Wednesday.

Proposed Law

The sprawling Bill C-69 would create a new regime for approvals of things like crude oil pipelines and new mines. Trudeau’s government argues the law clarifies a currently opaque system that sees projects regularly struck down by courts, but the oil industry says it’s too complicated and would deter new pipelines.

The proposed law has become a lightning rod and is now under examination in Canada’s increasingly unpredictable Senate. Changes to the bill are almost certain, and this will trigger a standoff with Trudeau’s elected lawmakers in the House of Commons. Meanwhile, the clock is ticking: an election would kill any bills that haven’t yet made it into law.

“This will give certainty, it will build public trust and therefore it will result in projects being built,” Senator Grant Mitchell, the bill’s sponsor in the upper chamber, said in an interview. He expects an amended version to pass. “The risk is in not doing it, in my mind. That’s not to say it can’t be changed.”

Industry View

C-69 is so wide-ranging there’s no cohesive industry view — the oil sector opposes its current form, but others aren’t as worried. Oil industry groups have suggested major changes that would make the bill palatable, but warn they need to be taken broadly together, and not cherry-picked.

“If this bill passes like it is, it’s going to be a jobs killer, and investment killer and you’re not going to get the major projects that we should get,” Chris Bloomer, president of the Canadian Energy Pipeline Association, said in an interview.

Christopher Carlsen, vice-president of engineering at Birchcliff Energy, said during a conference in Toronto this week there’s “significant nervousness and investor questions” about the bill.

One key uncertainty is that the government hasn’t released the “project list” to which the new rules will apply. A draft of that list is expected to be made public in the coming weeks, a Canadian government official said, speaking on condition of anonymity because they aren’t authorized to speak publicly.

The Senate has sparred over how quickly it will consider C-69, first proposed last year, and two other bills: C-68, which makes related reforms to fishery and environmental laws, and C-48, which bans crude oil tanker traffic on the northwestern coast of British Columbia. All the bills touch on energy development and environmental rules.

Canadian Natural Resources Minister Amarjeet Sohi said the government is open to changes that would “strengthen” C-69, but signaled the government planned to push ahead with the bill despite the blow-back. “I respectfully disagree with the industry’s assessment of this legislation,” he said.

Timeline Unclear

The Trudeau government expects the bill to pass in some form and receive royal assent before the election, rather than stall and die, the Canadian official said. Trudeau has a majority in the House of Commons, and the Senate historically bows to the wishes of elected lawmakers.

If the law is passed, Trudeau’s government will also need to weigh how quickly it’ll take effect. The prime minister could face criticism from the industry if he pushes for a start date before the election.

“The fear is that in the rush, the bill itself could be mangled,” said Justyna Laurie-Lean, vice-president of environment and regulatory affairs at the Mining Association of Canada, which is calling for a year-long implementation process.

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