February 8, 2018 / 5:21 PM / 13 days ago

UPDATE 2-Canada, facing protests, seeks to overhaul pipeline assessments

(Adds comments from clean energy and oil producer groups, Conservatives)

By David Ljunggren

OTTAWA, Feb 8 (Reuters) - The Canadian government, seeking to address unhappiness over the potential environmental impact of major projects, on Thursday unveiled draft legislation to change how pipelines and mines are assessed.

The bill, which officials say could become law by mid-2019, will create a new Impact Assessment Agency of Canada to investigate proposed major natural resource projects.

Reaction to the new rules was mixed. Industry expressed concerns over the wider scope of the new process, and environmental and Aboriginal groups saw promise in the enhanced consultation but worried over climate commitments.

Major project reviews are currently divided between three entities, a system the ruling Liberals say Canadians no longer trust.

The revamp is an attempt to address the concerns of aboriginal and environmental activists, who have opposed recent oil pipeline projects on the grounds that the existing assessment process is flawed and not stringent enough.

“I believe this will get us to a better place, that we will be able to ensure that you have the public trust,” Environment Minister Catherine McKenna told reporters. “We need good projects to go ahead. We need good jobs.”

Officials say the new law will cut review times, and factor in health, indigenous and gender issues as well as the environment. Industry players have complained it can take years for a review to be completed.

Involving indigenous groups early in the process will likely help companies smooth some opposition other projects have run into, said Patrick Kelly, chair of the Coastal First Nations.

“It helps avoid some of the stickier issues that end up in litigation,” he said, but noted First Nation governments would have liked more authority in the process.

The broader criteria and centralized authority strengthen Canada’s environmental assessment regime, said Nichole Dusyk, a post-doctoral fellow at the Pembina Institute, a clean energy think tank.

But Greenpeace Canada senior energy strategist Keith Stewart said the changes fail to “fix the broken system”, adding that they should more clearly define how projects must conform to the country’s commitment to fight climate change.

Pipeline companies are concerned about the wider scope of the new assessment process, the Canadian Energy Pipeline Association said in a statement. It said it was pleased to see legislated timelines.

The changes add up to new hurdles to economic growth, said Conservative critic Ed Fast.

Suncor Energy Inc, one of Canada’s biggest oil producers, said on Thursday the country is losing ground to others in creating conditions to attract investment.

EXISTING PROJECTS

The legislation will have no impact on projects currently being assessed, which will continue to be handled under rules already in force.

The ruling Liberals say the way projects are examined needs to be strengthened while insisting some pipelines need to be built to ensure oil producers can transport their crude to tidewater and benefit from higher prices.

This stance has done little to placate protesters unhappy about Kinder Morgan Canada Ltd’s plan to more than double the capacity of its Trans Mountain pipeline from Alberta to the Pacific Coast.

Prime Minister Justin Trudeau said last week the project would go ahead but demonstrations over the proposed C$7.4 billion expansion could hurt the Liberals in a federal election set for October 2019.

Under the new law unveiled on Thursday, particularly complex projects will be reviewed by special panels working together with the new impact assessment agency. The federal cabinet will continue to have the final decision on whether projects go ahead.

The law would also create a more transparent national energy regulator to replace the National Energy Board, which critics complain is too close to the industry. (With additional reporting by Rod Nickel in Winnipeg and Julie Gordon in Vancouver; Editing by Bernadette Baum and Susan Thomas)

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