Canada is the seventh-largest producer of crude oil and the third-largest producer of natural gas in the world. Crude oil from Alberta’s oil sands currently represents about 50% of oil production in Canada and it is estimated that by 2015 it will account for more than 90% of Canadian crude oil production. The majority of Canada’s oil production (65% of 2.73 million barrels per day as of fall 2011) is exported to the United States.
The sheer size and scope of Canada’s oil and gas industry and the environmental degradation associated with oil and gas practices can appear to contradict with Canada’s heritage of strong environmental stewardship of the Canadian wilderness. This conflict requires a thorough understanding of the regulatory bodies, legislation and policies associated with Canada’s oil and gas industry and pipeline infrastructure.
The power to regulate environmental protection in Canada is split between federal and provincial jurisdictions. Federal regulatory bodies like the National Energy Board and the Canadian Environmental Assessment Agency have a very important role to play in international and inter-provincial gas transportation and commerce. Both of these bodies are heavily involved in the business of pipelines and their relevant approvals, permits, spill monitoring, response efforts and enforcement. The National Energy Board (NEB) is the primary federal energy regulatory agency which regulates onshore and offshore development in the Northwest Territories, Yukon, Nunavut as well as offshore areas not within provincial jurisdiction. The purpose of the NEB is to promote safety and security, environmental protection, and efficient energy infrastructure in the Canadian “public interest”. This means that when deciding to approve an energy application, the NEB balances the economic interests of the project with the overall public good and the project’s negative impacts.
Federal legislation like the Canadian Environmental Protection Act, Canadian Oil and Gas Operations Act, Canadian Environmental Assessment Act, Fisheries Act and Environmental Enforcement Act provide a patchwork of environmental legislation which cover the release and spill of petroleum products into the environment and what due diligence and reports must be conducted. If there is a chance that a pipeline might impact navigable waters and fish habitat, populations of species at risk or migratory birds, federal approvals and regulations may apply. Furthermore, the oil and gas sector may become subject to federal legislation which regulates, controls and restricts greenhouse gas emissions (GHG).
Provincial regulators and legislation also play a large role in the regulation of oil pipelines, although the scope or regulation differs among provinces. For instance in Alberta, the Energy Resources and Conservation Board (ERCB) through ERCB Directive 071: Emergency Preparedness and Response Requirements for the Upstream Petroleum Industry regulates and enforces spills, spill contingency plans, resources and personnel available to remedy spills. Alberta’s provincial environmental legislation such as Oil and Gas Conservation Regulations and the Environmental Protection and Enhancement Act governs the release of petroleum and its potential release including reporting requirements, spill procedures and enforcement of offenses.
Bill 2, the Responsible Energy Development Act, now in its third reading, seeks to establish one provincial regulator for all Alberta oil. This new regulator would combine the approval process and environmental regulation into a “one stop shop”.
The effect of giving authority over environmental protection and regulation to both federal and provincial jurisdiction is to require coordination, to avoid duplication and overlap, while maintaining consistency among the various provinces and achieving coverage for spills and releases which cross provincial boundaries.
Although the status of pipeline spill regulation is still in transition, there exists a plethora of federal and provincial regulatory bodies, legislation and regulations which provide overlapping regulation of oil and gas pipelines and any spills which may result.