Assessing GHG emissions as part of Energy East pipeline review will drag out process – CAPP

Photo: Council of Canadians.

CAPP says GHG emissions already assessed by Canadian environment dept., NEB just duplicating effort

The Canadian energy industry hasn’t been enthusiastic about recent proposed changes to the National Energy Board and yesterday’s decision to include upstream and downstream greenhouse gas emissions as part of the Energy East pipeline review is drawing criticism.

Proposed route for the Energy East pipeline.

Energy East is a 4,500 kilometre pipeline proposed proposed by Calgary-based pipeline giant TransCanada to carry 1.1 million barrels of crude oil per day from Alberta and Saskatchewan to refineries in Eastern Canada and a marine terminal in New Brunswick. The national energy regulator received 820 submissions – many of them from environmental groups and First Nations opposed to the project – during a comment period on the controversial project, which will convert about 3,000 kilometres of natural gas pipeline to carry diluted bitumen (dilbit).

Additional topics that will be part of the NEB’s assessment of the Energy East and Eastern Mainline Projects include “Indigenous participation in the projects throughout their life-cycles, landowner and municipal considerations, cumulative environmental effects, as well as socio-economic elements,” according to the NEB press release.

But the big news in the announcement was the inclusion of upstream and downstream GHG emissions; in the past, only emissions directly associated with construction and operation of a pipeline were considered.

The NEB says it wants to consider emissions in determining whether projects are “in the public interest” and economically viable.

Eco-activist opponents welcomed the NEB’s decision.

“The Board’s decision is both lawful and sensible. Surely it is now self-evident that a pipeline review must consider all potential greenhouse gas emissions and the risk that the pipeline will become a stranded asset in tomorrow’s economy,” Charles Hatt, Ecojustice lawyer said in a statement.

Greenpeace Canada spokesperson Keith Stewart said in a statement that uncertainty assessing GHG emissions “is a strong argument for putting the review on hold until the government’s modernization of the NEB and Environmental Assessment Acts is complete.”

Industry’s biggest concern is that increasing the list of issues to be addressed by the review will prolong the process, already a serious issue for project proponents. The Northern Gateway pipeline from Alberta to Kitimat, BC began in the mid-2000s and was rejected by the Canadian government in late 2016 after costing proponent Enbridge hundreds of millions.

“Providing advice on this matter to the government of Canada on its pipeline approvals is something that is done by Environment and Climate Change Canada, so the NEB is really duplicating something that’s already available,” says Nick Schultz, VP, pipeline regulation and general counsel for the Canadian Association of Petroleum Producers.

“They’re going to further complicate and lengthen the process, which is already too long and too complicated.”

The Energy East review has already been delayed. An original application was submitted in Oct. 2014, but ran into problems a year later when the regulatory panel overseeing the hearings resigned amid questions about a potential conflict of interest. The NEB invalidated the work of the previous panel in Jan. and sent the review back to the beginning.

The Canadian Energy Pipeline Association says the NEB’s quasi-judicial process is not the appropriate venue to address broader public policy issues.

“CEPA firmly believes that broad public policy issues, such as climate change, should be addressed at the political level, and not through pipeline project reviews,” said an association statement.

“While it is appropriate to address the direct GHG impact of a pipeline project through the NEB process, upstream and downstream impacts are appropriately dealt with in the context of the Pan Canadian Framework on Clean Growth and Climate Change.

Nick Schultz, VP, pipeline regulation and general counsel, Canadian Association of Petroleum Producers. Photo: CAPP.

A common complaint from oil and gas executives is that excessive regulation by Canadian governments has eroded investor confidence. Industry says it must compete with other jurisdictions for capital, such as the Permian Basin in West Texas, which is not as heavily regulated.

“We have been very clear that restoring confidence in the regulatory process is not only a matter of addressing issues that the public and indigenous peoples have been raising, but also to restore confidence in investors that Canada can move pipeline projects through the regulatory process in a timely manner,” Schultz said in an interview.