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Enbridge: Too soon to tell how regulatory changes will affect Northern Gateway

CALGARY -- The energy industry is embracing measures by the federal government to simplify environmental reviews for major projects, but waiting to hear more details on how exactly the new rules will be applied.

Capping environmental reviews at two years and having one project undergo only one review "makes great sense," said a spokesman for Enbridge Inc., the Calgary company looking to build a crude pipeline from Alberta to the West Coast.

But how the changes — included in last month's federal budget and fleshed out by Natural Resources Minister Joe Oliver on Tuesday — would affect the schedule of the $5.5-billion Northern Gateway pipeline remains to be seen, said Todd Nogier.

"We'll have to see what the legislation is when it's tabled to see how it affects the project. So at this point it would be a little premature to speak to specifics as it relates to our project," he said.

Enbridge (TSX:ENB) filed its application for Northern Gateway almost two years ago. Hearings began in January of this year, and a final decision on the pipeline is not expected until late next year. Oliver has said the review for that project would have been done within the two-year time frame anyway.

David Collyer, president of the Canadian Association of Petroleum Producers, said it's clear Ottawa is committed to making the regulatory system more efficient and competitive. The move gives oil and gas companies more certainty on how long the regulatory process is going to take, which in turn makes it easier to plan and make informed investment decisions, he said.

"The issue that I think is in front of us now is how does all this play out in terms of the specific changes the government proposes to make? And those will be forthcoming," said Collyer. "We haven't seen the details of those yet, and we look forward to seeing how the government plans to move forward with implementation."

Calgary energy consultant Doug Matthews said he's been waiting a long time to see Ottawa step up and take control of the country's resource development.

"Decisions on resource development have always been made elsewhere, whether it was beaver pelts in London or lumber in Europe or the Keystone XL pipeline," he said — the latter being a delayed proposal to ship oilsands crude form Alberta to the U.S. Gulf Coast that has been the subject of much political wrangling south of the border.

"So the feds are finally saying, 'These are our resources. We are going to aggressively push to develop them.' That's a good thing."

But there are some rather thorny issues left to sort out, he said.

"The policy makes sense. I'm not sure these guys are capable of implementing it," said Matthews, who spent much of his career handling the Mackenzie Gas Project file for the Northwest Territories government.

That proposal, first conceived in the 1970s and then resurrected in 2004, encountered delay after delay until it was finally approved by the National Energy Board in late 2010. The natural gas market in North America changed so radically in the years it took to review the Mackenzie pipeline that the project is viewed by many to be all but defunct.

Matthews said he's perplexed as to why the federal government didn't impose a time limit on the Northern Gateway review in the first place, in light of what it went through with the Mackenzie "fiasco."

Matthews said he's also concerned that with Ottawa's increased focus on natural resources, some regions will be pitted against others.

The higher oil prices that would come from being able to export crude to new markets would raise the value of the Canadian dollar, which makes it more difficult for manufacturers to export their goods, he said. Alberta Premier Alison Redford and her Ontario counterpart Dalton McGuinty had a testy exchange over that very issue earlier this year.

"The problem I have with this is, as we become more aggressive pushing our own resource development, we're essentially telling Central Canada and the manufacturing sector 'You guys are toast.'"

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