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Unclogging the Pipes: Reform Required for Pipeline Review Process

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Feb. 29, 2012 - The federal government needs to reform Canada’s regulatory review process for energy pipelines, according to a report released today by the C.D. Howe Institute.

In “Unclogging the Pipes: Pipeline Reviews and Energy Policy,” Joseph Doucet, Interim Dean at the Alberta School of Business, says Canada’s energy pipeline review process needs to become more efficient, making better use of time and resources to complete reviews, while respecting the need for public participation and environmental assessments.

Most important, Doucet says, is that “the federal government should determine what issues should be within the purview of regulators and what decisions should rest with the federal or provincial parliaments.”

Professor Doucet notes that recent cases, including the Mackenzie Valley pipeline, the Keystone XL, and the Northern Gateway pipeline, highlight current challenges and the need for an improved regulatory review process.

First, according to Doucet, an improved regulatory review would avoid duplication but would set deadlines in regulatory processes at different departments and agencies, to ensure that the streamlined processes meet the policy targets they are intended to address, while facilitating suitable resource development. Second, governments urgently need to address scope creep in regulatory review analysis and decisionmaking.

“While issues such as energy security, greenhouse gas emissions, and energy efficiency are important to society and relevant to the energy development and to the national economy, these overarching social and environmental issues should be dealt with by government decisionmakers, not as part of the regulatory review process. This would provide clearer direction for the review process, which could then focus on project-specific issues,” says Professor Doucet.

Among Doucet’s recommendations: Ottawa and the provinces should continue to expand efforts to coordinate regulatory review of major projects and to eliminate duplication. They should develop overarching processes and frameworks, such as Alberta’s cumulative effects management system, that provide clear direction on regulatory decisions for major projects. That would that allow government policy explicitly to address energy development, imports, and exports, and remove these overarching national interests from the review process for individual pipelines.

Click here for the full report.

For more information contact:  Joseph Doucet, Interim Dean, Alberta School of Business; or Benjamin Dachis, Senior Policy Analyst, C. D. Howe Institute. 416-865-1904 email: cdhowe@cdhowe.org

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