Joe Oliver, chairman of investment dealer Echelon Wealth Partners, is the former minister of natural resources and minister of finance.
Last week, Canada received more bad news in its prolonged failure to export energy resources abroad. Petronas decided not to proceed with its $36-billion Pacific NorthWest LNG project, dealing a body blow to B.C. employment, economic growth, funding for social programs and revenue to First Nations. Understandably, the federal and provincial governments sounded defensive, characterizing it as a business decision based entirely on the decline in liquified natural gas prices.
However, Petronas had previously emphasized it considers the industry’s long-term prospects, including costs, not just the current market. Furthermore, LNG projects are moving forward south of the border and in Australia. An initial project description was filed with the Canadian Environmental Assessment Agency (CEAA) in February 2013, raising the question why it could not have been approved sooner when prices were higher and costs potentially lower.
For the sponsor, it must have felt like death by a thousand cuts, with frustrating delays and ceaseless demands for concessions from politicians and regulators, as well as lawsuits from environmental and aboriginal opponents.
When I was minister of natural resources, our Conservative government legislated “one project, one review” in a defined time period, a significant regulatory improvement. Later, we provided an accelerated capital allowance for the project’s facilities and extended export licenses.
In contrast, the Liberal government denigrated the National Energy Board (NEB), politicized, duplicated and lengthened the consultation and review processes and broadened their scope. It is now considering the addition of social and cultural impacts, which would exacerbate uncertainty and delay.