Inside the Canadian oilsands lobby’s request to fast-track a major project

A lobby group representing Canada’s biggest oil and gas producers has asked the government to fast-track a major industrial project in a move the federal environment minister says could “circumvent” the law.

The project is a proposal by the Pathways Alliance, a group of six fossil fuel companies that wants to capture massive amounts of carbon pollution from oilsands facilities in Alberta and transport it hundreds of kilometres to an underground storage hub. The lobby group delivered its request in a letter sent to four federal cabinet ministers in January 2023 and included in internal government correspondence obtained by The Narwhal.

Oil companies say the project requires billions of dollars in public subsidies to proceed, and that it can help reign in pollution from a sector that is Canada’s fastest growing source of climate-warming emissions including carbon dioxide. Environmental groups and some First Nations have balked at the prospect of subsidizing Canadian companies that have reported hundreds of millions, or billions of dollars, in quarterly profits this year and loosening environmental oversight for an unproven plan that could impact natural ecosystems.

According to the letter, Pathways Alliance president Kendall Dilling asked the government for a series of commitments that it said would give it the confidence it needed to proceed. These would include an “assurance that the Pathways pipeline, hub and capture projects would not require a federal review under the Impact Assessment Act.”

Canada’s impact assessment legislation allows the government to order environmental reviews of projects to ensure they protect the environment, health, economic and social conditions that fall under federal constitutional powers, including responsibilities to protect fisheries, migratory birds, species at risk and Indigenous Rights.

According to other internal documents, Pathways also asked for financial incentives, including public subsidies worth up to 50 per cent of their operating costs for carbon capture and storage projects. These included a request for the government to give oil and gas companies credits for meeting new clean fuel standards whenever they sell fossil fuels processed with carbon capture technology to customers outside of Canada, something New-Brunswick-based Irving Oil has also asked for in lobbying efforts.

In the letter, the lobby group said it would “need policy certainty from the Government of Canada on a number of key issues by mid-year at the latest,” and warned the industry faced “critical timeline constraints in our plans to deliver major greenhouse gas emission reduction projects by 2030.”

But many details of those plans remain unclear. The documents reveal the government of Canada has signed a non-disclosure agreement with Pathways members, which include ExxonMobil subsidiary Imperial Oil, Canadian Natural Resources Limited (CNRL), Suncor, Cenovus, ConocoPhillips Canada and MEG Energy.

The government did not previously disclose details of this industry lobbying or of its non-disclosure agreement with the lobbyists until it was compelled to do so through access to information requests made by The Narwhal.

The non-disclosure agreement came into force in April 2023, just a few months after the industry group sent its letter. It has been used to conceal “confidential information” being exchanged during a series of meetings government officials held directly with Pathways representatives, with a statement attached to meeting agendas saying disclosure of the information could mean financial loss or “prejudice the competitive position” of Pathways members.

‘We can’t create a pathway for Pathways that would circumvent our laws’: environment minister

Canada’s environment minister says even he isn’t aware of exactly what the companies plan to do, let alone decide whether it merits a full federal environmental assessment by the Impact Assessment Agency of Canada.

“Frankly — there’s no project to speak of right now,” Environment and Climate Change Minister Steven Guilbeault told The Narwhal in an interview. “Once there’s a project, [the Impact Assessment Agency of Canada] will look at it and make recommendations to me, as they do for any other projects. But there’s no special treatment.”

Guilbeault said he had not given permission for the oilsands group to skip a federal environmental review. “I can assure you that I gave them no such assurances … they have the right to ask for something like this, but the answer will be no,” he said.

“The law is the law. We can’t create a pathway for Pathways that would circumvent our laws, unless we would change them. That’s how impact assessment works.”

He also said he couldn’t answer whether he personally believed the organization should eventually get a federal assessment, because he said “we need details of what the projects will be” first.

Asked why Impact Assessment Agency officials were meeting with Pathways Alliance representatives if there was no project to speak of yet, the minister said it was “normal” for agency staff to coordinate with companies and explain legal requirements to them. He said it wastes time if companies come to the agency without having done the proper groundwork first, including consultations with First Nations.

The Impact Assessment Agency encourages proponents of projects to get in touch so it can help with verifying whether their activities fall under the list of activities that trigger an environmental review, spokesperson Elizabeth Penner wrote in an emailed statement in response to questions from The Narwhal.

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Penner also said a project proponent can “request a non-disclosure agreement with the agency if it wishes to protect commercially sensitive information from being disclosed.”

Guilbeault portrayed the non-disclosure agreement as something that regularly happens when companies speak with the federal government.

“Companies often sign a [non-disclosure agreement] with us, so they can share information with us in the development of regulations,” he said.

“We’re doing it now for the clean electricity regulations, companies will share proprietary information and market sensitive information. … It’s common practice,” he said.

‘It needs an impact assessment, whether it’s federal, whether it’s provincial’: conservation advocate

Under Canada’s Impact Assessment law, the proponent of a project must check to see if what they want to do falls under a list of activities designated for an impact assessment, called the project list.

A spokesperson for the Impact Assessment Agency said carbon capture and storage facilities are not specifically on that list, but as the project takes shape, there may be elements that are. The project list is scheduled to be reviewed in August of this year.

“To date, the agency has not received any information to indicate this proposal includes any designated physical activities that would make it subject to the [Impact Assessment Act],” Penner, the spokesperson, wrote, adding that could change as projects details are firmed up.

The letter from Pathways was penned before the Supreme Court of Canada found the Impact Assessment Act to be partly unconstitutional, which forced the government to amend the law, limiting its scope.

Environmental groups say the revised law can still apply in areas of federal jurisdiction and remains an important trigger for broad public involvement.

“We think a federal environmental assessment [of Pathways] would be quite robust,” Matt Hulse, a lawyer at Ecojustice who is examining the oil companies’ proposal, said in an interview.

The proposed carbon pipeline and several of the oilsands facilities involved are located on Athabasca Chipewyan First Nation territory. The First Nation recently joined Ecojustice and other groups to ask Alberta and its energy regulator to carry out their own environmental impact assessment of the Pathways Alliance’s proposal, saying it raises “a host of health and safety concerns” such as potential pressure on the local watershed, increased regional air pollutants and the risk of explosions or asphyxiation. Chief Allan Adam indicated the nation had been seeking more information from Pathways “for the past two years, to no avail.”

Treaty 6 First Nations have also been raising concerns about the project. Coun. In February, Michael Lameman of Beaver Lake Cree Nation told the Canadian Press the industry has “been vague, not very forthcoming.”

Phillip Meintzer, a conservation specialist at Alberta Wilderness Association, another one of the groups that asked for a provincial assessment, told The Narwhal the Pathways Alliance request to avoid a federal assessment was “disappointing” and “frustrating” but not surprising.

“It needs an impact assessment. Whether it’s federal, whether it’s provincial, it needs to be assessed,” Meintzer said.

“It’s disappointing to see companies trying to get out of doing an environmental impact assessment, especially in areas that are already so highly developed. We need an understanding of these impacts before these projects can go forward.”

The Pathways Alliance has been the subject of other criticism of its methods. It was singled out in peer-reviewed research for “greenwashing,” and is being investigated by the federal Competition Bureau over allegations from Greenpeace Canada it made false or misleading environmental claims in its advertising.

“This is more evidence that Pathways are not who their ads make them out to be and calls into question their intent to reduce emissions,” Greenpeace Canada senior researcher and writer Nola Poirier wrote in an email.

“Bullying the government to waive the impact assessment of a large infrastructure project by threatening to go back on goals for decarbonization is not the action of an organization that cares about responsible development,” Poirier added.

Details of federal Pathways working group discussions not disclosed, leading to transparency concerns

Federal officials sprung into action in the weeks after Pathways delivered its letter to cabinet ministers, internal emails show.

Staff at the Impact Assessment Agency of Canada were soon assigned to join a working group alongside oil and gas industry officials that provided advice to a central government committee called the main table. The committee invited at least one senior Alberta official to participate in the process.

The working groups also assigned officials from Natural Resources Canada and Innovation, Science and Economic Development Canada, who were scheduled to meet with different industry figures from Pathways member companies. They were divided to cover a range of topics such as Indigenous engagement, regulatory coordination, economic inclusion, emissions accounting and project development and financing.

The new central committee appears to fit the description of what Pathways described in its January 2023 letter, when it suggested the government and the industry group had “agreed to assemble a single, federal table that would bring all of the key departments together to address the most important fiscal, policy and regulatory challenges facing Pathways.”

Exactly what they discussed remains a secret, as meeting minutes and agendas were heavily redacted before being released to The Narwhal.

Sarah Laframboise, executive director of Evidence for Democracy, a nonprofit based in Ottawa that promotes the use of evidence in government decision-making, said non-disclosure agreements “compromise the integrity and transparency of practices in place for the assessment of similar processes.”

“In important discussions that have real-world implications, it is vital that citizens are informed and are able to understand why decisions are made. Our democracy relies on public trust, and transparency is the tool that will allow for this trust to be fostered and protected,” Laframboise said.

Meintzer, from the Alberta Wilderness Association, said the public money being put into carbon capture and storage technologies, in the form of multi-billion dollar tax credits, means a higher level of public scrutiny is warranted.

“The public should know what’s going on and [the government] shouldn’t be able to hide behind [non-disclosure agreements].”

Pathways did not respond to questions from The Narwhal about why the group requested “assurance” its project would not require a federal impact assessment, or how their timelines have been impacted by that decision.

The Narwhal also asked the Pathways Alliance a series of questions about who proposed the non-disclosure agreement, who and what does it cover, what is its purpose, why was it necessary or whether it was still in force.

The Narwhal also asked who proposed the committee, whether it was still meeting, why it was necessary, how many meetings it held, whether the other companies not mentioned in the documents participated and how lobbying disclosure rules applied. The alliance did not respond to any of these questions before publication.

Pathways Alliance says it is preparing applications for carbon storage plans

In March, the group announced it had begun filing regulatory applications to the Alberta Energy Regulator for its proposed carbon transportation network and storage hub.

In a recent interview with CBC, Derek Evans, executive chair of Pathways, said the industry would need over 400 provincial regulatory approvals to proceed with its plans. He added a provincial regulator in Alberta would also need to review the project and determine overall impacts in the province.

“To a certain extent, this pipeline that we’re building is going down an existing right-of-way,” he said. “We’ve already done a lot of the regulatory work in previous applications and the environmental work. I believe this is going to have a very minimal impact.”

But he added the group could not move faster by spending more of the oil companies’ own profits because Pathways didn’t see yet how it could make enough money from all the carbon it expects to capture.

“We are required to make decisions in the best interests of our shareholders and other stakeholders as well,” he said.

“It’s the lack of a well-defined and deep carbon market that would be important for some of the revenue.”