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Federal government gives green light to $9-billion Joslyn oilsands mine project

CALGARY -- The federal government has given the green light for the Joslyn oilsands project to go ahead, nearly six years after it was first proposed, and added fuel to the debate over what message Canada should send to the world.

Natural Resources Minister Joe Oliver said Thursday that construction can now begin on the mine, about 70 kilometres north of Fort McMurray, Alta., though there remains a two-week consultation period with local First Nations.

He said the prolonged review process for Joslyn shows the need for Canada to streamline its regulatory system so the process goes faster.

"It is crystal clear that we need to put an end to unreasonable delays — delays that can jeopardize the viability of projects like Joslyn and harm our reputation as an attractive place to do business," Oliver said.

"In particular, definitive timelines from the beginning to the end of the regulatory process are needed to improve the timeliness and predictability of the regulatory environment, and support investment and planning decisions."

Total E&P Canada first proposed the mine in February 2006 and has since partnered with Canada's largest energy producer to build it at a cost of between $7 billion and $9 billion.

Jean-Michel Gires, who heads up the Canadian division of French energy giant Total SA, called Canada's regulatory system "very structured."

"I understand it reassures many stakeholders about the quality of this regulatory process," he told reporters on a conference call. But he said he would welcome changes to the system that would see projects undergo just one review, undertaken by the best-placed regulatory body.

Environmental groups were quick to blast the approval, particularly since it comes during a United Nations climate-change conference in South Africa. The oilsands have been criticized, among other things, because of the greenhouse gases that are emitted when fossil fuels are burned.

The Canadian delegation has faced criticism at the Durban talks for refusing to sign on to a second commitment period under the expiring Kyoto Protocol, the only international treaty that sets binding targets for signatory countries to lower their greenhouse-gas emissions.

"Approving Total's Joslyn tar sands mine during the UN climate summit in Durban is like poking the international process in the eye," Gillian McEachern of the group Environmental Defence, said in a statement.

"This decision will mean another one and a half million tonnes of greenhouse gas pollution each year, the equivalent to putting over 270,000 cars on the road.

"This represents the wrong direction if Canada is serious about tackling global warming. Canada's reputation has already been battered on the world stage because we're siding with big polluters instead of taking action on global warming, and this new tar sands mine will reinforce that."

The Conservative government of Prime Minister Stephen Harper has never been a fan of the Kyoto protocol, which was signed by the Liberals but received lacklustre support from them. Harper has argued it doesn't make economic sense for Canada to bind itself to restrictions when large greenhouse gas producers such as the United States, China and Russia aren't.

The Joslyn approval "removes any doubt that the Harper government does not care about the climate and shows how hollow his tar sands commitments are," said Greenpeace campaigner Mike Hudema in a statement.

"Clearly, the Harper government is more concerned with tar sands company profits than the health and well-being of communities and the environment." Oilsands opponents often use the phrase "tar sands" as a derisive way to describe the resource.

The Canadian Building Trades labour group said it was encouraged by the approval, saying it will create jobs.

"It means good news for construction and maintenance contractors and it means good news for construction apprentices from across this country," said director Robert Blakely.

"Young Canadians work on these projects, learn a trade and make careers in the skilled trades."

In January, a regulatory panel approved the Joslyn mine, albeit with 20 conditions related to the environmental and technical aspects of the project.

The mine is part of a joint venture announced a year ago with Suncor Energy Inc. (TSX:SU), Canada's largest energy company.

That $1.75-billion partnership also includes the undeveloped Fort Hills oilsands mine and the Voyageur upgrader, which has been dormant since the recession hit in late 2008.

Gires could not say exactly when Total and Suncor will decide whether or not to go ahead with the project.

"I would say just in the near future," he said.

The 100,000-barrel-per-day project is targeted to start producing oil in 2018.

Gires said "the beauty" of the partnership with Suncor is the ability to control the pace of construction on the two mines and the upgrader that would process bitumen from them into refinery-ready crude.

"We are very cautiously working on this level of co-ordination with Suncor."

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