CAPP Regulatory Recommendations Will Protect Oil and Natural Gas Workers, Save Canadian Jobs

April 17, 2020 – Calgary, Alberta

For the past several weeks, the Canadian Association of Petroleum Producers (CAPP) has been working directly with members of the federal government to provide recommendations to ensure reliability of energy as an essential service, as well as support Canada’s oil and natural gas industry through the global economic crisis.

Canada’s oil and natural gas industry is one of a number of industries acutely impacted by the economic chaos being caused by the pandemic. In addition to the health pandemic, in early March OPEC and Russia took the opportunity to distort the market even further and pursue market share. Canadian oil prices have fallen to extreme lowws; ranging between $3 and $5 per barrel.

In a letter addressed to Natural Resource Minister Seamus O’Regan, dated March 27, 2020, CAPP made a number of recommendations related to federal regulatory actions, and the need for a measured approach as industry deals with a number of unavoidable challenges at this time. The objective is to maintain delivery of the essential items we produce in a safe, sustainable way, as well as helping to preserve the Canadian economy through the recession.

First, to help mitigate and prevent the transfer of COVID-19, oil and natural gas producers found some regulatory requirements hindered the efforts being made to protect the health and safety of their employees. Producers have already introduced strict measures that include minimizing person-to-person contact and establishing social distancing. To effectively implement these practices, all non-essential activities have been postponed to significantly reduce the number of people working on-site. With fewer people on-site, it has been a challenge to meet all of the existing regulatory requirements in order to be compliant.

Implementing temporary changes for certain low-risk regulatory requirements allows companies to focus on critical areas of operations and continue to ensure effective protection of the environment and our neighbours. It is important to note that operators must still continue to meet all requirements related to environmental protection and may be expected to file reporting retroactively, once business returns to normal.

Secondly, industry has asked government to pause on a number of regulations currently in development. At this time, due to social distancing practices, it would be impossible to conduct the proper public consultations required to advance regulatory changes. In addition, companies, government agencies and Indigenous communities are all putting all their efforts and resources toward the health pandemic, and inevitable economic and social fallout resulting from COVID-19. Not only do these groups lack the resources to adequately participate in regulatory consultation, but making long-term decisions in the middle of this crisis could prove exceptionally difficult as the world around us is rapidly changing.

Thirdly, we are asking the Government of Canada to temporarily suspend, delay or reconsider certain regulatory actions that will add costs to industry at this time. Increasing the costs of operating will inflict further damage to our economy as we struggle to weather this crisis. It does not make sense to place further economic burdens on Canadian businesses while they continue to try and remain afloat.

Canada’s oil and natural gas industry is committed to playing a key role in helping the country get through this global crisis by providing medical supplies where we can and keeping production flowing to provide the energy that heats our homes, fuels our transportation systems, and powers our businesses.

The energy sector has been through economic downturns before. Over the last two decades, through those ups and downs, we have remained a steadfast contributor to the country; generating about $360 billion for government revenues during that period. In the Great Recession of 2007 and 2008, the oil and natural gas industry was able to support Canada’s economy and be a source of job creation across the country.

Today, we are not in a position of strength and are asking for help. Support for the industry now can position us to be a part of the foundation for recovery and the long-term rebuild of Canada’s social and economic structure.

CAPP has been participating in consultations with the Government of Canada, and providing recommendations on actions that could be taken to support Canada’s oil and natural gas industry through the COVID-19 pandemic. The letters the CAPP submitted to the federal government can be found here.

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