Energy East Pipeline "Dead", Columnist Opines

John Ivision

Sept 8, 2017 - Energy East is dead and j’accuse the Trudeau Liberals.

TransCanada Corp, the company behind the 4,500-km pipeline that would carry crude from Alberta to refineries in eastern Canada, has said it wants to suspend its application to build the $15.7-billion project. The reason: the National Energy Board’s announcement late last month that it will consider Energy East’s contribution to upstream and downstream greenhouse gas emissions — factors not considered when the Liberals granted permits to expand Kinder Morgan’s Trans Mountain project and Enbridge’s Line 3 pipeline.

The background to the decision is entirely political. The Liberals have decided they have taken enough heat from the progressive left for backing Trans Mountain and they have no intention of risking seats in a province where a majority oppose Energy East, and where the next election will be won or lost — namely Quebec.

They have a fig-leaf of a defence in that Canada needs an extra 1.5 million barrels of transportation capacity by 2030 to handle anticipated growth in supply. The combination of Trans Mountain, Line 3 and Keystone XL pipelines would add an extra 1.7 million barrels a day of capacity.

But that doesn’t excuse the abuse of the regulatory system by a government that promised to restore trust in the process.

​Nor is it likely to appease the angry citizens of New Brunswick, Alberta or Saskatchewan, who would have benefited from a pipeline Trans Canada pitched as a “Canadian solution to a Canadian challenge” — displacing imports from Venezuela and Saudi Arabia that are not subject to upstream emissions evaluations.

Back in early 2016, the government said it would introduce new hurdles to regulatory reviews, including greenhouse gas emissions from the lifecycle of projects.

In the case of Trans Mountain, upstream emissions were not considered. But last month, the National Energy Board said it would review emissions throughout the industrial process, including extraction, processing and handling of resources — even as it conceded these activities “are not within the care and control” of Trans Canada.

The fact that the axe is hanging over the NEB clearly had an impact on the decision.

The government is currently mulling proposals produced by an expert panel that recommended the NEB be scrapped and replaced by two new bodies.

In an apparent attempt to ingratiate itself with a government looking for a good reason to kill Energy East, the board raised the regulatory bar to a level that Trans Canada does not seem prepared to even attempt to vault.

Dennis McConaghy, a retired former oil executive and author of the book Dysfunction: Canada After Keystone XL, called the NEB’s decision a “terrible blunder.”

“The decision to re-scope so profoundly is, fundamentally, a mistake by the panel — one implicitly endorsed by the Trudeau government,” he said. “If the government couldn’t abide more pipelines or LNG projects, it should have said so explicitly and not deferred the job to the NEB.”

The role of the board is to make recommendations to cabinet on whether projects are in the national interest, not to set policy, he said.

The decision to impose new conditions on projects by the NEB is the “very essence of dysfunction — and it’s getting worse,” said McConaghy.

If the government couldn't abide more pipelines or LNG projects, it should have said so explicitly and not deferred the job to the NEB.

In addition to blowing up the NEB, the government is about to introduce new legislation to cover future environmental assessments. The guiding principles going forward will go far beyond environmental impacts to consider social, health and economic aspects of projects, as well as gender implications. Environment minister Catherine McKenna told the Assembly of First Nations that the new system would be produced in a “co-development process” with an AFN committee.

Politicians such as outgoing Saskatchewan premier Brad Wall have called the proposals “subjective and nebulous,” while business groups like the Chamber of Commerce have responded by suggested the government is set to introduce an “unworkable” system that could effectively end investment in Canada’s natural resources sectors.

In their election platform, the Liberals promised to balance the environment and the economy.

It seems they have already lived up to all the promises they intended to keep.