Canadian ruling could halt planned oil-sands project

Friday, March 07, 2008

From an article by David Ebner in The Globe and Mail:

CALGARY -- Oil sands projects could face tougher regulatory scrutiny after a federal court judge yesterday found the approval of Imperial Oil Ltd.'s $8-billion oil sands mine insufficient on climate change and greenhouse gas emissions.

A federal-Alberta review panel approved Imperial's Kearl mine last year, saying it was in the public interest, although it worried about "critical challenges" on environmental issues and local problems in Fort McMurray. Alta.

The panel didn't explain why it decided that 3.7 million tonnes of greenhouse gas emissions each year - equivalent of 800,000 cars on the road - wouldn't be significant, Federal Court of Canada Judge Danièle Tremblay-Lamer said in a judgment published yesterday.

"The panel dismissed as insignificant the greenhouse gas emissions without any rationale," Judge Tremblay-Lamer wrote, calling on the panel to revisit the specific question.

The court victory by environmental groups, four of which had appealed the panel ruling, signals that the spotlight and assessment of oil sands projects will become ever-more intense.

While the decision focuses on the panel's decision to approve the mine rather than evidence presented by Imperial and its parent company, Exxon Mobil Corp. of Texas, it was hailed as a "landmark" in the oil sands by environmental groups.

Shawn Denstedt, a partner at law firm Osler Hoskin & Harcourt LLP in Calgary who works on many oil sands regulatory applications, said companies are ready to deal with tougher assessments. "The scrutiny of projects is becoming more and more stringent," he said.

"This is another speed bump in the regulatory approval process, not a roadblock," he said, adding that expected regulations on greenhouse gases from the federal government will provide further clarity.