By Nia Williams (NYSE:WMB)
CALGARY, Alberta, May 1 (Reuters) - Canada will exempt some oil sands projects from federal environmental assessments as long as Alberta maintains a cap on oil sands emissions, draft regulations from the federal government said on Wednesday.
Canada is in the process of revamping legislation governing how major energy and infrastructure projects are assessed. On Wednesday the government released new details of which projects would be scrutinized under the proposed Bill C-69.
New in-situ oil sands projects, also known as thermal projects, which pump steam underground to liquefy tarry bitumen so it can flow to the surface, will not be subject to federal assessment providing Alberta keeps a hard cap on greenhouse gas emissions introduced by the previous New Democratic Party government. Oil sands mining projects will be included on the Bill C-69 "project list."
The NDP was ousted by Jason Kenney's United Conservative Party in Alberta's April 16 election. Previous Premier Rachel Notley had introduced the 100-megatonne cap on oil sands emissions as part of her government's climate plan.
Kenney, who was sworn in as premier on Tuesday, said his government will challenge Bill C-69 in court if it is passed into law in its current form because it intrudes on provincial authority to regulate natural resource development.
"The federal government has zero constitutional authority to big-foot in here and pretend that they can regulate oil sands development," Kenney said at a news conference.
He added his government has no plans to change the emissions cap because the province is nowhere close to hitting it.
The Canadian Association of Petroleum Producers said the federal government should not use the project list as a "political tool," and in situ projects should continue to be assessed by the Alberta Energy Regulator, which has the most oil sands expertise.
"To throw the emissions cap, which is obviously a concern between the federal and provincial government, into regulation is not appropriate," said CAPP Chief Executive Tim McMillan.
Bill C-69 has proved controversial since a draft was unveiled by Prime Minister Justin Trudeau's Liberal government last year. It is currently before a Senate committee and faces a number of additional steps before it can become law. say the bill will streamline the approval process and reassure the public that environmental concerns around energy projects and pipelines are being addressed. Critics predict it will create new uncertainty, deterring investment in the oil sector.
Catherine McKenna, Canada's minister of Environment and Climate Change, said the government is open to improvements to Bill C-69 but also concerned about emissions from the oil sands.
"It is really important that we're all serious about tackling climate change and that includes Alberta as well," she told reporters in Ottawa.