September 6, 2012

New CEAA Act to change Canadian RE Industries

The environmental assessment is a staple in the process of getting industrial energy projects approved and onto the construction phase. Whether the project is for a traditional or renewable energy source, or an addition to the transmission grid, projects must be reviewed by a governmental regulatory entity to make sure the addition to the area’s energy portfolio won’t have any adverse environmental impacts. The law by which this process is regulated in Canada is the Canadian Environmental Assessment Act (CEAA). The first version of this act was enacted in 1992, shortly followed by the establishment of the Canadian Environmental Assessment Agency, which is responsible for carrying out the assessments.

Earlier this summer, this version was repealed, and a new Canadian Environmental Assessment Act was put into effect. There weren’t a ton of changes, but one change in the ‘Purposes’ section of the act will undoubtedly speed up the production of energy in Canada, and will thus yield new additions to the transmission system.

On June 13, 2012 Canada’s parliament passed Bill C-38, also known as the ‘Jobs, Growth, and Long-Term Prosperity Act,’ by a vote of 164-134. As part of Section 52 of this bill the Canadian Environmental Assessment Act, 1992 was repealed and the Canadian Environmental Assessment Act, 2012 rendered active. The respective acts look very similar, but one new clause in the ‘Purposes’ section of the 2012 CEAA will distinctively change the process in the future. The new clause, (f), states that one purpose of the act is “to ensure that an environmental assessment is completed in a timely manner.” This means that the assessment process now has a time limit, effectively streamlining the process so that projects can be constructed sooner. This will mean that projects won’t be under such rigorous scrutiny as before and the public won’t have as much time to comment their opinions, two aspects environmental activists will surely rally against. While some feel the environment will now be less protected from industrial degradation than before, there could be an upside where renewable energy projects can go through the approval process quicker, saving the environment and society from the worse effects of traditional power generation.

Renewable power generation technology, such as wind and solar, don’t take up a huge ecological footprint, but their footprint in terms of land area is still quite significant and sometimes bigger than a coal or natural gas plant. This means that whole ecosystems can be disrupted by the generating units, access roads, and transmission lines, needed for the projects. For example, the disruption of Sage Grouse populations by wind power development is one thing many people may have heard of. With the new CEAA though, assessing the effects a wind farm may have on an entire ecosystem could be overlooked because of the new time limit. Sage grouse populations are a valuable part of these ecosystems and rely on the sagebrush of these plains areas of the central US and Canada for sustenance and protection, but wouldn’t a wind farm serve the local and global environment in the long-term better than a new coal-fired power plant?

For a US reference look to the Mountain States Transmission Intertie: a 500 kV transmission line being developed by Northwestern Energy to carry wind power energy from Montana to Idaho. The approval process includes an Environmental Impact Statement (EIS) conducted by the Bureau of Land Management (BLM) and the Montana Department of Environmental Quality (DEQ), an equivalent to what the CEAA requires. The BLM and DEQ started this process in 2008, but there have been multiple delays. Earlier this month Northwestern Energy decided to put the project on hold because of the delays: $14 million spent on the assessment process and still no concrete approval date has been given yet. If a similar project was being developed, say between Alberta and British Columbia, under the new CEAA, the project might be approved and underway within the year.

Unfortunately for the renewable energy industry, the new CEAA will also mean that traditional energy sources, like oil sands and natural gas, will also be under less scrutiny from the Canadian Environmental Assessment Agency. The effects that traditional energy has on the climate and the environment are well documented, but in a still-recovering economy the profit gained from these sources still outweighs those from renewable sources. Oil prices are rising globally, but if Canada is able to extract oil from places like the Athabasca Oil Sands, the largest known reserve of crude bitumen in the world, they won’t have to rely so heavily on foreign oil and renewable energy could become an afterthought.

There is one thing that can be counted on in the burgeoning energy and electrical industry of Canada, many more transmission lines, whether to connect wind farms to urban areas or to power in-situ crude bitumen plants. The area around Fort McMurray, the boomtown associated with the Athabasca Oil Sands, is one of the many places in Alberta where transmission development is growing. At the end of this post is a link to a map showing most of the new or upgraded substations and tap lines associated with transmission development in the Fort McMurray area. Fort McMurray has a population of 61,374 and the entire regional municipality of Wood Buffalo, which encompasses Fort McMurray, has a total population of 65,565. With this low of a population count in such a large geographic area it’s no wonder all these developments are predominantly meant to transmit power to new/existing oil sands developments, and with the new CEAA there is bound to be much more transmission development in the area.

The natural environment is a vital part of our world, but more abundant energy, renewable or traditional, is needed for a global population that is projected to reach 9 billion by 2050. The new CEAA, while neglecting the environment to some degree, will enable Canada to tap the energy resources it possesses in a timelier manner. The future is unknown, but one could certainly bet on seeing an increase in transmission development happening in Alberta and across Canada, connecting both renewable and traditional sources to population centers, possibly to the dismay of some local residents and activists.

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