The Trans Mountain pipeline has become an ant under a magnifying glass: the project has so much energy focused on it from all sides, it seems that it should have spontaneously combusted years ago. That hasn’t happened, but just about everything else that can happen to a major project has.

It’s been approved by the federal government.

Its approval has been quashed by the Federal Court of Appeal.

It was bought by the federal government.

And now that the federal government — its owners — has approved the pipeline (again) things are looking sunny for Trans Mountain proponents once more.

But how did a pipeline that a decade ago was only known to a subset of the oil industry and B.C. activists become the focus of national attention, protests, lawsuits, arrests and even a few elections? And how does the approval square with the federal government’s declaration of a climate emergency, issued just yesterday?

Let’s break it down.

Not-so-humble beginnings

The Trans Mountain pipeline was an audacious undertaking even in its current form. Its 1,150 km length runs — as the name implies — across the Rocky Mountains, from Edmonton to Burnaby. It’s the only pipeline to do so in Canada.

But about 60 years after it was built, the oil industry began protesting publicly in the early 2010s that demand had outstripped pipeline capacity, and that it was suffering at the hands of American refineries. Having the U.S. as Canada’s sole export market, they argued, was resulting in billions of dollars in lost profits as well as a hobbled ability to expand. (That argument has been hotly contested by people like Robyn Allan, the former CEO of the Insurance Corporation of British Columbia.)

Pleas from industry for new high-capacity pipelines have gone unanswered thus far. From Energy East to Keystone XL to Northern Gateway, the approval process has been a Sisyphean task, getting only so far before rolling back downhill for one reason or another.

Low worldwide oil prices, meanwhile, have cut the legs out from under oilsands production, which needs a much higher baseline price to remain viable compared to cheaper forms of oil. The industry sees the additional capacity from the Trans Mountain project as a way to reach what it views as more lucrative markets in Asia.

When times were still good in the oilpatch, in 2013, Trans Mountain’s then-owner, Kinder Morgan, proposed a second pipeline to run more or less parallel to the original that would more than double the capacity.

Environmentalists, communities and First Nations responded to the proposal with alarm. The reasons for the opposition vary, but the most commonly cited concerns include pipeline spills; additional oil tanker traffic on the coast and the associated ship noise and pollution; a lack of Indigenous consultation; and the climate risks of locking in increased oilsands production for at least a generation.

With such broad rationales for opposition, stopping the pipeline has become a rallying cry for progressives of all stripes.

Prime Minister Justin Trudeau campaigned in 2015 on a promise to fix the environmental review process that resulted in the National Energy Board ultimately approving the project in 2016.

So it came to the dismay of many when Trudeau’s government took such a shine to the pipeline that in 2018 the federal government bought it for $4.5 billion from Kinder Morgan.

But the champagne may have been premature: the same day as Kinder Morgan shareholders approved the deal, the Federal Court of Appeal* overturned the 2013 National Energy Board decision, saying the government had not meaningfully consulted with First Nations or considered its environmental impacts.

Both of those issues have been pinned on the Harper government’s changes to environmental assessment legislation in 2012. Those changes stripped many of the considerations from the approval process in the name of expediting projects like Trans Mountain.

One pipeline — four elections

On the provincial level, it’s another story: two elections have already been won on the back of Trans Mountain.

First there was B.C. NDP leader John Horgan, who said in 2016 that the project would put the coast and the jobs that depend on it at risk. He was elected the following year, and then-Alberta premier Rachel Notley’s Great Wine Boycott of February 2018 was just one of the skirmishes that ensued along the B.C.-Alberta border.

Horgan later asked the B.C. Court of Appeal whether he has the authority to block bitumen originating in another province from reaching the B.C. coast; it ruled in May that the federal government has exclusive jurisdiction over interprovincial pipelines.

Notley cheered the decision, but from the sidelines: United Conservative Party leader Jason Kenney had already been elected in April on a platform of smiling whilst saying “pipelines,” and frowning whilst putting “Notley” and “Trudeau” in the same sentence.

Kenney has continued to voice his disapproval of Trudeau’s lack of wand-waving to magick the pipeline into existence. Kenney’s first trip as premier took him to Ottawa to meet with Trudeau and discuss Trans Mountain, after describing his congratulatory phone call from the prime minister as “a respectful conversation about a number of issues, including the need to get Canadian energy to foreign markets.”

Pipelines have already become an issue for 2019’s federal election, with Conservative leader Andrew Scheer proposing a new free-trade deal between provinces that would clarify the rules around tricky interprovincial issues — like pipelines — while accusing Trudeau of dragging his heels on Trans Mountain.

“I believe it is Justin Trudeau’s strategy to not have this pipeline even started to be built by the next election,” he said at a speech in Calgary in October. “He just can’t admit that it will be dead by the next election.”

Trudeau himself has already suffered a blow to his support from B.C. throughout the pipeline battle — while not gaining any ground in Alberta, where he remains a pariah despite having bought and voiced support for the pipeline.

Trans Mountain has even been the elephant in the room in municipal elections. Both the winner and runner-up in the last Burnaby election expressed furious opposition to the project, as did Kennedy Stewart in his winning mayoral campaign in Vancouver.

What’s next?

The federal approval likely won’t be the end of the story.

Both the Tsleil-Waututh and Squamish First Nations, in whose traditional territory the pipeline ends, celebrated the court’s decision against Trans Mountain and have urged the government to reject it (other First Nations along the route have signed their support for it).

More lawsuits will almost certainly be filed, and more activists will activate. In April, 71-year-old Terry Christenson climbed a tree at the Burnaby terminal and refused to come down for 34 hours. He was later arrested — but following an approval, protests like Christenson’s will likely rage on along the pipeline route.

Even Green Party leader Elizabeth May has been arrested, alongside Vancouver mayor-elect (then NDP MP) Kennedy Stewart, at Trans Mountain protests.

Some First Nations have promised Oka-like standoffs. If the approvals stage has seemed ugly, it is sure to get even uglier as construction proceeds.

Climate anxieties

The pipeline has also become a focal point for Canadians’ anxiety over climate change. Under the Paris agreement, Canada has committed to lowering its emissions by 30 per cent by 2030 and 80 per cent by midcentury. That commitment precludes locking in further expansion of oilsands without bringing all other economic sectors down to more or less neutral emissions.

Canada’s Environment Commissioner Julie Gelfand has said Canada is not on track to meet its targets, calling out Canada’s slow progress as “disturbing.”

Environment and Climate Change Canada estimated the additional oil produced and processed by Trans Mountain would release 13 to 15 million more tonnes of carbon dioxide every year — and that’s just the upstream emissions, not counting the actual end use. But climate impacts were not considered by the National Energy Board’s review, which approved the pipeline.

“We have a decade to drastically reduce our fossil fuel consumption,” B.C. Green Party leader Andrew Weaver said in a written statement on Monday. “Building a new pipeline for diluted bitumen with a lifespan of 40 to 50 years is utterly incompatible with our responsibility as elected leaders to respond to the biggest crisis we face.”

Oil by land and sea

Not all of the oil passing through Trans Mountain will make it to its destination to be burned. Trans Mountain has reported 84 spills in its decades of operation to the National Energy Board. Some have been worse than others. In one case, 11 Burnaby houses were coated in oil after the pipeline ruptured in the city.

Opponents are worried about the potential spills from tankers, as well; the Tsleil-Waututh First Nation commissioned a study from Simon Fraser University that found the likelihood of a “worst-case” spill of over 100,000 barrels to be 29 per cent over 50 years.

Twinning the pipeline would increase tanker traffic in and out of Burrard Inlet sevenfold, and on their way to the ocean tankers have to pass through the Juan de Fuca Strait, home to a critically endangered population of 76 southern resident killer whales. Ship noise has been blamed for some of their decline because it impedes their ability to use sound for hunting.

Today’s approval, scientists say, could seal the fate of the whales. But it has already shaped municipal, provincial and federal politics, pitted two of Canada’s most populous provinces against one another and stretched the seams of federalism for a decade.

Whether it’s built or not, Trans Mountain has already permanently left its mark on Canada.

*Correction made at 11 p.m. on June 19, 2019: The article originally stated the Supreme Court of Canada overturned the National Energy Board’s original approval of the Trans Mountain expansion project. In fact, that decision was made by the Federal Court of Appeal.

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LNG Canada has announced that the international consortium is ready to proceed with Canada’s largest ever infrastructure project, but, in a David and Goliath scenario, a challenge by a Smithers environmental consultant is aiming to temporarily derail or delay the $40-billion megaproject.

Michael Sawyer is arguing that the Coastal GasLink Project, a 675-kilometre pipeline running from Dawson Creek to Kitimat, should have faced a federal review by the National Energy Board instead of relying on provincial approval.

Although the $4.7-billion pipeline is set to be built entirely within B.C. — which would usually put it under the jurisdiction of the province — the pipeline, which would supply the LNG Canada export terminal in Kitimat, connects to an existing pipeline system that is federally regulated.

Also, Coastal GasLink Pipeline Ltd. is a wholly owned subsidiary of TransCanada Pipeline Ltd., which means under the Constitution Act the pipeline is within federal jurisdiction and should be regulated by the National Energy Board, Sawyer says in an application to the board.

Sawyer-Challenge-CoastalGasLinkProject-NEB by The Narwhal on Scribd

“A pipeline that crosses international boundaries or provincial boundaries would normally be federally regulated,” Sawyer told The Narwhal, pointing to a 1998 Supreme Court decision that said if a provincial pipeline is “functionally integrated” with an existing federally regulated line, it becomes an extension of the federal line.

Sawyer wants the National Energy Board to conduct an environmental review of the pipeline and, if that application is turned down, he is prepared to ask the Federal Court of Appeal for leave to argue to overturn that decision.

It is a process already familiar to Sawyer, who, last year, launched a similar action dealing with the Prince Rupert Gas Transmission pipeline.

That application was rejected by the National Energy Board, but the Federal Court of Appeal then ruled that the National Energy Board had erred and sent it back to the board for reconsideration. The question became moot when Petronas killed the Pacific NorthWest LNG project because of depressed natural gas prices.

Sawyer is hoping the previous ruling will give LNG Canada and the provincial and federal governments, which both support the project, pause to reflect on the financial ramifications of a delay.

It is a wrinkle that is likely to be top of mind for the federal government because of delays in the Trans Mountain oilsands pipeline, which was kicked back to the National Energy Board after its approval was rejected by the Federal Court of Appeal.

“I think I have a really good chance of winning. I think I am on really good legal ground, although I don’t think everyone is going to roll over and say they agree with me,” Sawyer said.

Challenge presents legal risk to LNG Canada

West Coast Environmental Law staff lawyer Erica Stahl agrees there is a risk to LNG Canada going ahead before the application is resolved.

“This case means there is a legal risk to them going ahead without a full resolution of the matters raised by Mike Sawyer,” Stahl said.

“They would be wise to take this seriously because of the Federal Court of Appeal’s previous ruling in the Prince Rupert case,” she said.

West Coast Environmental Law is helping fund the case through its Environmental Dispute Resolution Fund, a grant provided by the Law Foundation of B.C. to help pay for legally meritorious environmental cases.

If the National Energy Board turns down the application and the case has to wend its way through the courts it could be several years before there is an ultimate decision and Sawyer said that, if it becomes necessary, he could apply for an injunction.

A letter sent in August to the National Energy Board by Catherine Davis, TransCanada Pipelines Ltd. vice-president of natural gas pipelines law, calls Sawyer’s application “vexatious” and asks the board to decline to hear the application as the project is not functionally integrated with the federally regulated NCTL pipeline system.

“The application is an attempt by Mr. Sawyer to use the NEB to indirectly challenge natural gas development in B.C. He chose not to participate in the provincial regulatory processes for the project and chose not raise his concerns over the last four years, when he knew he could,” said the letter.

“Instead, he has brought this application on the eve of a FID (financial investment decision) in an obvious attempt to frustrate that project and its associated upstream development.”

Davis concluded that Sawyer has failed to demonstrate any specialized expertise or produce information that would warrant the National Energy Board spending time and resources on reviewing a project that obtained valid provincial permits four years ago.

“I believe that when the government doesn’t follow the law it is incumbent upon citizens to hold their feet to the fire.” — Mike Sawyer

So why is Sawyer, a former whitewater rafting guide, spending his time and money challenging the pipeline project?

“We are told we are living in a society based on law and order and good governance and I believe that when the government doesn’t follow the law it is incumbent upon citizens to hold their feet to the fire,” he told The Narwhal.

LNG and climate change

Sawyer is also concerned about the effect of LNG Canada on climate change.

Although supporters are touting natural gas as the clean alternative to coal used in Chinese industry, when everything from fracking and methane leaks to transporting the gas to China is considered, studies have shown that LNG, over its life cycle, is more carbon intensive than coal, Sawyer said.

With the approval of LNG Canada, there is expected to be an explosion of hydraulic fracturing operations in northeastern B.C., like this one near Farmington, B.C. Photo: Garth Lenz / The Narwhal

An August submission to the B.C. government from Marc Lee, senior economist with the Canadian Centre for Policy Alternatives says that LNG Canada’s emissions, ranging from fracking to liquefaction, would be between nine and 12 megatonnes a year — an amount likely to be a problem when B.C.’s emissions target for 2050 is 13 megatonnes in total.

Premier John Horgan, who is set to unveil a clean-growth strategy this fall, has said he believes climate targets can be met if LNG Canada goes ahead, but there will have to be sizeable reductions in other sectors.

Sawyer also wants a National Energy Board review to look at how LNG Canada will affect caribou herds.

A driving force behind the court decision to send the Trans Mountain pipeline back to the National Energy Board was the failure to consider the effect on endangered southern resident killer whales and Sawyer said the same situation is true of the LNG Canada project because of endangered caribou herds.

The caribou guardians

“There are caribou herds in northern B.C. that are protected under the Species At Risk Act that will go extinct if this project goes ahead,” Sawyer said.

“In the caribou range the government is allowing pipelines and wells to go ahead and that has never been considered so my goal in bumping this to a federal review is to actually have a meaningful analysis of whether this is in the public interest in regard to the monumental impact on greenhouse gases and on endangered species,” he said.

“Right now we have not done an honest assessment of the impacts and we are just salivating at the thought of all the money it is going to bring in.”

Sawyer received threats after filing application

Opposition to the project has come at a high personal cost for Sawyer who received intense criticism and threats from LNG supporters after he submitted the application.

“In the first few weeks after my original application was filed with the NEB I got a real stack of almost vitriolic comments and some of those were implicit threats like ‘we are coming to get you,’ and another guy commented ‘you had better have your house insurance up to date.’ ”

Sawyer reported the threats to the RCMP, but, so far, no action has been taken as the statements were implicit rather than explicit, Sawyer said.

“The way I have interpreted that is that they are angry people who are just expressing their frustration. So, I am paying attention, but I am not taking it too seriously,” he said.

In a September 6 letter sent to Sawyer with a copy to West Coast Environmental Law, 14 northern B.C. mayors reminded Sawyer that, although he has the right to file a jurisdictional challenge, northern communities support the LNG Canada project and the pipeline because of the “financial benefits of employment and economic activity that would follow.”

Others have suggested that Sawyer’s office should be picketed and that local businesses should put pressure on him to drop the legal challenge.

Sawyer, who has worked with the oil and gas industry, First Nations and NGOs, said his interest in natural gas dates back to an incident in Alberta in the late 1980s when he was a whitewater rafting guide.

Shell was working in the area and, unbeknownst to Sawyer and his 75 clients, who were camping beside the Red Deer River, a nearby well blew out releasing gas high in toxic hydrogen sulphide.

“Everyone woke up in the morning feeling really ill and when I walked up to the road a guy from an air monitoring truck roared down wearing a respirator and asked what the hell we were doing there,” Sawyer said.

The group was evacuated safely, but if the wind had been blowing in a slightly different direction it would have been a mass casualty event, he said.

“That kind of opened my eyes. Before that I was a typical Albertan who was just watching things unfold. I really wasn’t knowledgeable about oil and gas,” he said.

But, after talking to Shell and the regulators, who did not want to deal with the issue, he started to watch more carefully.

“It really was an education for me about the nature of the industry,” he said.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Kinder Morgan’s decision to suspend work on its controversial $7.4-billion Trans Mountain pipeline looks like a another corporate attempt to blackmail Canadian governments.

On Sunday the Texas-based company, which emerged from the ashes of scandal-ridden Enron, abruptly announced it was suspending all “non-essential” work on the export pipeline.

Steve Kean, CEO of Kinder Morgan Canada, blamed the B.C. government for the suspension — even though the National Energy Board has not approved construction for any portion of the project but the Westridge marine terminal in Burnaby.

Even Kinder Morgan has repeatedly acknowledged the reality of setbacks in presentations to investors, citing “a potential unmitigated project delay to December 2020” as recently as last month.

Still, Kean blamed B.C. “What we have is a government that is openly in opposition and has reaffirmed that opposition very recently,” he said.

But aren’t democracies supposed to challenge projects that impose unprecedented economic and environment risks on their citizens?

Wouldn’t a tanker spill of diluted bitumen in the Salish Sea, where one-third of western Canada’s population lives, be an economic and environmental catastrophe, devastating tourism, property values and marine life?

Wouldn’t the doubling of tolls on the expanded pipeline, as approved by the National Energy Board, raise gas prices for British Columbian motorists by $100 million a year? The pipeline now supplies southern B.C. with most of its petroleum.

Won’t Alberta, by exporting diluted bitumen to Asian refineries, repeat the original Canadian sin of failing to add value to resources at home, giving up thousands of jobs and billions in revenue?

How can exporting one of the world’s most carbon intensive fuels help fight climate change?

And can’t corporations with viable projects accommodate citizens, courts, First Nations and economists who think such costs and liabilities should be properly accounted for?

But Kinder Morgan prefers bluster and blackmail instead of the reality that the project was never a sound venture because it was about privatizing gains and socializing costs.

Economist Robyn Allan has repeatedly argued that Kinder Morgan is no ordinary company and the Trans Mountain expansion project has been uneconomic since day one.

She told The Tyee that “Kinder Morgan is looking for an exit strategy, but it likely includes a need to demonize Ottawa in order to set the stage for a suit under NAFTA.”

The drama begins with the biased workings of the National Energy Board, which refused to look at downstream and upstream climate impacts of the project and even failed to scrutinize its commercial viability during public hearings.

The best evidence from experts shows that Kinder Morgan, the Canadian government and Notley have misrepresented the pipeline’s illusory benefits.

A pipeline to the coast will not raise bitumen prices, because all global markets discount junk crude due to its poor quality.

The ill-conceived project will export refining jobs and great clouds of climate-changing emissions to China. In addition tanker traffic place southern resident orcas at risk.

The Houston-based firm that Prime Minister Justin Trudeau and Alberta Premier Rachel Notley now salute as a defender of Canada’s national interest is the spawn of Enron, found guilty of accounting fraud and corruption. The energy trader’s collapse cost shareholders $74 billion and killed 20,000 jobs.

Kinder Morgan, a dirty and unsexy mover of gas and oil, began as Enron Liquids Pipeline in 1997. Enron alumni continue to populate the senior ranks of Kinder Morgan.

They include Richard Kinder, a Texas billionaire and Kinder Morgan’s chair. He worked at Enron for 16 years. Jordan Mintz, the chief tax officer, served as the vice-president of Enron’s tax division from 1996-2000.

Kean, the man now baiting Canadian governments, worked as Enron’s senior vice-president of government affairs. And so on.

These Enron alumni probably think Canadian politicians are the ultimate pushovers and dimwits.

During the 2014 NEB Trans Mountain hearings the U.S. parent firm vowed to provide 100 per cent of the debt and equity for the pipeline.

But after a Wall Street analyst suggested the third largest energy company in North America wasn’t spending enough to maintain its pipelines or returning value to investors, the company’s share price fell. Kinder Morgan’s stock value plummeted in 2015 and continues to languish. Lower oil prices and rising debt put its largest capital project on shaky ground.

Allan says investors recognized a year ago that the Trans Mountain project didn’t make commercial sense. As investor interest waned, Allan said, Kinder Morgan couldn’t raise debt or equity in the U.S. markets or find a joint-venture partner.

The job of raising money for the project then fell to Kinder Morgan Canada. But $1.6 billion it raised in 2017 went to pay off debts of its parent company.

Richard Kinder explained the move in a conference call with investors: “So we were able to strengthen KMI’S balance sheet using the IPO proceeds to pay down debt… ”

Kinder Morgan Canada has arranged $5.5 billion in construction facility loans from Canadian banks — but only if Kinder Morgan raises $2 billion in equity for the project.

“And now we learn from Premier Notley and Kinder Morgan Canada CEO Steven Kean that conversations with Alberta for financial support have taken place,” says Allan.

Rachel Notley, Canada’s leading petro politician, apparently can’t wait to pour taxpayers’ money into a project that the market views as high risk and that British Columbians regard as a threat to their best interests.

“Alberta is prepared to do whatever it takes to get this pipeline built — including taking a public position in the pipeline,” Notley said Sunday.

So corporate blackmail works like a charm in Canada.

Allan says Kinder Morgan is looking for a way out.

“The project is not commercially viable and, even before it’s built, Kinder Morgan is looking for a bailout,” she said. “If Kinder Morgan’s long-term contracts for moving 700,000 barrels of bitumen and oil on a controversial pipeline were solid, would Kinder Morgan now be blaming the government of B.C. for its problems?”

In a normal world governments concerned about fiscal prudence and the public interest would let Kinder Morgan abandon a non-viable project. (Some analysts have already said cancelling the project would be a “significant blow,” but not “the end of the world for Kinder Morgan.”)

In a moral world Canadian governments would admit that pipelines and tankers export refinery jobs and greenhouse gas emissions on a disastrous scale.

In a just world Alberta would have to admit it has allowed industry to overproduce bitumen due to low royalties and bad governance. The province has no strategic plan for bitumen other than screaming for pipelines.

But Canada, like its southern neighbour, is having trouble behaving normally, morally or justly these days.

But Trudeau and Notley think it’s OK to embrace a debt-ridden U.S. company so it can export, via tankers, unrefined bitumen to Chinese refineries where the upgraded resource can enrich the authoritarian Communist party.

Canadians should be more than ashamed.

They should be alarmed.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Remember that whole fiasco in 2012 when Stephen Harper basically, you know, eviscerated most of Canada’s environmental laws in one ginormous budget bill?

People actually called it the ‘Environmental Destruction Act.’ People took to the streets. People, aka our members of parliament, pulled all-nighters proposing amendments to the bill, but Harper just laughed in their faces while playing the keyboard. Or something like that.

So yeah, things got pretty grim there for a minute (aka six years).

But not to worry, a young fella named Justin Trudeau came along and campaigned hard to restore environmental laws. He promised science. He promised consideration of climate impacts. He promised to restore the public trust in the environmental assessment process. Easy peasy, right?

After getting elected, the Liberals set off to do just that and for the last 14 months they’ve been hustling.

Now, we know the idea of an “environmental assessment review” isn’t super sexy, but the Liberals hit it with such enthusiasm we just couldn’t look away.

They sent expert panels from coast to coast to hear Canadians talk about science and Indigenous rights and climate change and how really if we just had a more grown-up way of assessing the environmental impacts of projects, maybe we wouldn’t have such fractious debates about mines and pipelines and dams (oh my!).

Today, finally, we found out  what the government is proposing as a solution to this whole thang. And well, it’s a work in progress (you know something’s complex when the government creates a 600-word infographic to try to simplify it) but we spoke to a whack of experts and here’s what we can say so far.

There are some good signs

Everyone loves a good sign, right? Scientists, academics and legal experts looking at today’s bill say the fact the government explicitly mentions sustainability, Indigenous rights, climate change, gender-equity and cumulative impacts of projects is, indeed, a good sign.

The bill introduces a new Impacts Assessment Act (that will replace the former Canadian Environmental Assessment Act), a new Canadian Energy Regulator Act (that will replace the National Energy Board Act) and proposes amendments to the Navigation Protection Act. A revamped Fisheries Act was announced earlier this week, to largely positive fanfare.

“There’s a lot of good stuff in there,” Anna Johnston, staff counsel with West Coast Environmental Law, told DeSmog Canada. “They’re making some important changes to some of the things that were most badly broken in the old laws.”

The new law would require major projects be judged according to new standards that consider “the environmental, health, social and economic effects of designated projects with a view to preventing certain adverse effects and fostering sustainability …taking into account the rights of the Indigenous peoples of Canada.”

Previously there was no overarching sustainability or Indigenous rights standard against which major decisions on natural resource projects were measured. Instead projects were assessed for their “significant, adverse environmental impacts.” In other words, they were looking for projects to be less bad — but not necessarily, y’know, good.

So this is a big change, but also raises a lot of questions about just what things like ‘sustainability’ and ‘cumulative impacts’ mean and how decision-makers like Environment and Climate Change Minister Catherine McKenna will weigh those concerns against economic impacts.

“It’s great to see in this new law that there’s actually specific requirements to consider climate and sustainability,” Johnston said. “But I still don’t see anywhere a safeguard against trading off environment for economy.”

Remember When Harper Ruined Canada’s Environmental Laws? Here’s How the Liberals Want to Revamp Them https://t.co/IumeDcu1QC #cdnpoli pic.twitter.com/qXF87DtAtg

— DeSmog Canada (@DeSmogCanada) February 9, 2018

Ah yes, balancing the ol’ environment and economy

A lot of ink has been spilled…or pixels have been pixelled…over just what constitutes balance between environmental harms and economic goods.

But this new law digs into that. The creation of the new Impacts Assessment Agency and the Canada Energy Regulator is meant to help address more well-rounded questions of the public’s interest than their predecessors the Canadian Environmental Assessment Agency and the National Energy Board respectively did.

“Since the dawn of environmental law legislation in Canada in the 1970s, we have used our environmental assessments of major resource development projects, on a project by project basis, as proxy forums for having these discussions about how to balance economic development, environmental protection and, increasingly along with that, recognition and protection of Indigenous rights and interests,” Jason MacLean, assistant professor at the University of Saskatchewan College of Law, told DeSmog Canada.

“We’ve never truly developed an integrated national policy framework to, as a country, lay out a strategy, lay out a vision. Instead, we’ve gone project by project and in that…we’ve been prioritizing economic development over environmental protection.”

While the National Energy Board was initially created to facilitate a cross country natural gas pipeline, the new Canadian Energy Regulator has a more encompassing responsibility to keep energy projects safe and reliable while respecting Indigenous rights and engaging with the public in a transparent manner

Could be a game-changer.

Weeding out bad ideas

Other good signs: the new law is meant to include a lot more public participation and Indigenous consultation in projects before they enter the assessment phase. The idea being here that bad projects will be weeded out before they hit the formal review phase if they’re not a good fit for communities and First Nations.

The Impacts Assessment Act also explicitly dictates that traditional Indigenous knowledge is brought into the process and emphasizes more public participation and engagement.

This is a big turn around from the 2012 changes, which sought to limit public participation — a move that resulted in a lot more community and Indigenous legal challenges after the fact.

Let’s get regional

The new legislation places an emphasis on regional impact assessments — studying how one new project will impact current and future projects in that same region and how unique ecosystems may play into whether or not a specific region is appropriate for, say, a pipeline or three LNG export facilities.

But “the act needs to go a few steps further than it currently does with regional assessments,” Justina Ray, senior scientist with the Wildlife Conservation Society, told DeSmog Canada.

Ray said the inclusion of regional impacts assessments in the legislation was a “glimmer of hope.”

“That is significant in that it was never there before and in order to really effectively assess and stave off cumulative effects you have to take a regional perspective,” Ray said, adding impacts on ecosystems, habitat for species and climate change all factor into those cumulative impacts.

Yet those region specific impacts assessments are discretionary.

“You wonder how things will progress and how realistically,” Ray said. “If the provinces are gung-ho on regional assessments, how will they be implemented at the end of the day?”

Much mystery remains …

The new bill is long — over 341 pages — and yet it still doesn’t cover everything.

“Understanding legislation is hard,” Aerin Jacob, scientist with the Yellowstone to Yukon Conservation Initiative, told DeSmog Canada. “And there’s only so much you can put in a bill and that’s normal.”

“But the devil is in the details. So how the legislation is rolled out and what policy and regulations comes along with it, that’s where a lot of the clarity will come from,” Jacob said.

“I don’t think we can say this legislation is a homerun by any means.”

For example, on the issue of cumulative impacts assessments, there is no clear outline of impacts thresholds that cannot be crossed, Jacob said.

“Without having an ecological threshold — or social or health impacts threshold — written into the legislation we don’t know when we’ve passed them.”

Specific benchmarks would be really useful in evaluating whether a project is truly in the public interest, Jacob said.

“If we know our targets for, say, greenhouse gas emissions and we have realistic estimate of what projects are going to emit…we add those up and it is exceeds targets provincially or federally, we know it’s not compatible.” Similar thresholds could be used to avoid dangerous levels of disturbance for caribou or grizzly habitat, Jacob said.

Clear as mud

“There are some aspects of this that are better than I expected, some that are worrisome, and some aspects that are in desperate need of clarification,” Robert Gibson, sustainability assessment expert and professor at the University of Waterloo, told DeSmog Canada.

“I think some of the things about which there are mysteries are going to remain that way until there are decisions by the regulatory powers.”

One major uncertainty remains around what projects in particular will trigger a federal environmental assessment. The federal government plans on conducting further public consultation about what projects ought to face federal review.

“Until the regulations determine what the categories are in this case, it’s uncertain,” Gibson said. “There are competing interests and in a way it’s good that is still open to potential debate. But there’s no commitment to clarity there.”

“This is certainly better than the current law. That’s what we’d call a low hurdle in sports,” Gibson said. “So I don’t think people are going to be astonished by that.”

— With files from Jimmy Thomson

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The Federal Court of Appeal has ruled that the National Energy Board (NEB) made a legal mistake by not considering whether TransCanada’s Prince Rupert Gas Transmission pipeline is under federal jurisdiction, thus requiring NEB approval.

The 900-kilometre natural gas pipeline would move mostly fracked gas from northeastern B.C. to the proposed Pacific NorthWest liquefied natural gas (LNG) terminal near Prince Rupert.

The pipeline was approved by the B.C. government but Smithers, B.C., resident Mike Sawyer requested that the NEB hold a full hearing to determine whether the pipeline is actually in federal jurisdiction.

The NEB regulates the construction and operation of pipelines that cross international or provincial boundaries, as well as the export of oil, natural gas and electricity.

Map of the proposed Prince Rupert Gas Transmission pipeline via the Canadian Environmental Assessment Agency.

The court sent the matter back to the National Energy Board for re-determination. Speaking for the unanimous panel of three judges, Justice Donald Rennie said the board looked only at the location of the pipeline within B.C. and failed to consider that the entire purpose of the pipeline is to move gas for export.

The judge said courts don’t usually overturn NEB decisions, but in this case the issue involves the constitution so the court is stepping in.

“This shows that the NEB was too quick to dismiss a legitimate constitutional argument without a full hearing,” Sawyer said. “I’m convinced that PRGT is just one part of a massive natural gas export scheme that is clearly within federal jurisdiction and needs federal approval to proceed.”

If built, the Pacific NorthWest LNG terminal would be the single largest source of greenhouse gas emissions in Canada. The federal government’s approval of the export terminal is facing a judicial review this fall. The project has also been criticized for being situated on Lelu Island, where it will disturb critical salmon habitat at Flora Bank.

“I don’t think we should be exporting our natural resources, particularly energy resources, if we haven’t determined what’s in our public interest,” Sawyer said.

Pacific NorthWest #LNG Hits Road Block as #Gas Pipeline Sent Back to National Energy Board by Federal Court https://t.co/njBsxmWzjC @PNWLNG

— DeSmog Canada (@DeSmogCanada) July 20, 2017

TransCanada now has 60 days to apply to the Supreme Court of Canada for permission to appeal the decision.

Apart from that, the constitutional issue will go back to the National Energy Board for a full hearing to determine if the pipeline is in federal jurisdiction and would require a federal environmental assessment and approval.

Image: Lelu Island, the proposed site of the Pacific NorthWest LNG terminal. Photo: Lax U’u’la

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Kinder Morgan Canada’s president Ian Anderson may have misled potential investors in a statement released Thursday that claimed “execution planning is complete, our approvals are in hand” for the Trans Mountain pipeline, according to Ian Stephen, resident of Chilliwack B.C. and campaign director at the Waterwealth Project.

“We are now ready to commence construction activities this fall,” Anderson told the public this week during Kinder Morgan Canada’s $1.75 billion initial public offering — one of the largest offerings in Canada’s history — expect to close May 31.

But according to Stephen, Kinder Morgan is “misleading potential investors,” because the company has yet to receive National Energy Board approval for the Trans Mountain pipeline route through Chilliwack.

The company’s current plan routes the pipeline directly over the city’s aquifer, a source of drinking water for over 90,000 residents in Chilliwack and Yarrow.

“The key thing for me, and for most people in Chilliwack, is the aquifer. It’s our sole source of drinking water for one of the fastest growing communities in B.C.,” Stephen told DeSmog Canada.

Stephen said the original Trans Mountain pipeline was built in 1953, long before detailed knowledge of the aquifer was available. But now Kinder Morgan wants to add a second pipeline along the same corridor that falls within the city’s groundwater protected zone, Stephens said.

“But there are other issues too — the fact that the pipeline crosses two school yards and goes through dense residential neighbourhoods,” he said.

Majority of Statements of Opposition Filed with NEB from Chilliwack

More than 400 statements of opposition have been filed with the National Energy Board in response to the most recent Trans Mountain filing.

A total of 188 of those statements came from Chilliwack, including those from local residents, City Hall, the Chilliwack Chamber of Commerce and local First Nations.

“A high proportion of those letters of opposition came from Chilliwack,” Jason Lum, Chilliwack city councillor, told DeSmog Canada.

“People are paying close attention to this issue,” he said, adding alongside the city’s submission to the NEB, he submitted a personal letter requesting Trans Mountain consider alternate routes that don’t threaten the city’s aquifer as well as sensitive ecosystems such as the Brown Creek wetlands.

Lum added the pipeline route, as currently proposed, runs atop the water systems for both Chilliwack and Yarrow.

“What I hear predominantly from people, even from people staunchly supportive of the pipeline, is that it’s not a good idea to run a pipeline through a drinking water source.”

For Stephen, the large amount of statements of opposition from the community in Chilliwack, which Trans Mountain has yet to formally respond to, conflicts with Ian Anderson’s statement that “approvals are in hand.”

“The pipeline route has not been approved by the National Energy Board,” Stephen said. “And I’m quite confident it won’t be in Chilliwack.”

Chilliwack Residents Among Most Vocal Opponents of Trans Mountain

Residents of Chilliwack featured prominently in a November 2016 report released by a Trudeau-appointed ministerial panel tasked with conducting public hearings along the Trans Mountain pipeline route.

“I do not understand how the pipeline could have been allowed to be built across the aquifer in the first place,” Chilliwack resident Cary Stephen wrote in a submission to the panel.

“Perhaps they simply did not have knowledge of the aquifer in the 1950s. Perhaps they chose to believe that pipelines would never spill. In any case, it would be unthinkable to allow that mistake to be repeated now.”

The panel noted residents of Chilliwack and Abbotsford raised significant complaints about Trans Mountain’s performance managing the existing pipeline and preparation for the proposed expansion.

“Where ranchers from the Interior had praised Trans Mountain staff for being respectful and responsive, farmers in the Fraser Valley — many of whom said they support the pipeline in principle — posted a long list of complaints about the pipeline and the company’s general attitude,” the panel wrote.

The Collaborate Group of Landowners Affected by Pipelines (CGLAP) told the panel the current Trans Mountain pipeline “creates access and drainage problems, that it is frequently outside the legal right-of-way and is not always buried to the designated 60-centimetre depth, which makes it a hazard to cross with farm equipment.”

Despite these ongoing problems with the historic pipeline, in its efforts to secure a new pipeline route, Trans Mountain has “threatened and bullied” landowners, applying pressure to sign one-time bonuses in exchange for route access, according to Delwen Stander CGLAP legal counsel.

Trans Mountain Failed to Follow Procedure, May Face Delays

In addition to charged relationships with local residents in Chilliwack, Trans Mountain also failed to follow its own schedule for public comment periods, Stephen said.

Following submissions to the National Energy Board, Trans Mountain is legally required to make information available to the public as well as post schedules for public comment periods.

“Here in Chilliwack they were handing out these big full-page, colour flyers, delivered door to door just before the detailed route process and it said that other route locations are no longer under consideration,” Stephen said.

“People got the impression from that flyer the route is set and can’t be changed. That’s simply not true.”

“It’s aggravating that people would be misled like that just before a regulatory process starts up.”

Compounding that issue, Stephen said, Trans Mountain filed a schedule for public comment periods with the NEB but then failed to follow that schedule.

“So people may have filed late thinking they had more time than they did, or they thought they missed the deadline.”

Waterwealth filed a motion with the National Energy Board asking them to require a correction from Trans Mountain.

Depending on how the board rules, the period for public comment may reopen after new notices are published between May 29 and June 6, Stephen said.

“I expect the NEB will rule on that today, before the weekend,” he said.

Image: Mychaylo Prystupa/Vancouver Observer

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By Chris Tollefson, Executive Director Pacific Centre for Environmental Law and Litigation.

Early on in its remarkably candid treatise released today, the Expert Panel tasked with advising the Trudeau government on how to modernize the National Energy Board (NEB) observes that the issue it was asked to grapple with “is much larger than simply the performance of the NEB in and of itself”: read the panel report here.

Indeed.

Since the 2013 Northern Gateway pipeline hearings, our national energy regulator has been buffeted by one controversy after another.  The NEB must bear some of the blame for this.  Its work on the Northern Gateway, Kinder Morgan and Energy East files underscore that its expertise does not lie in the realm of environmental assessment.  But it is also a victim of history — an institution conceived and born in an era (almost 60 years ago) long before Indigenous rights, climate change and decarbonization had political, let alone legal, salience.

A key question confronted in this review was what role, if any, should be played by the NEB (or its potential progeny) going forward. Historically, the core role of the NEB was regulating the construction and operation of interprovincial and international energy infrastructure, particularly oil and natural gas pipelines.  

Yet, while the NEB has been legally responsible for reviewing proposed new infrastructure projects on a broad public interest-based test, it has been reluctant to grapple with broader, more policy-infused questions — including climate change, environmental impacts and Indigenous rights. 

The NEB’s reluctance and failure to grapple effectively with these questions has led to substantial delays, conflict and litigation.

In a breathtaking understatement, the Expert Panel observes: “The current process is frustrating for everyone.”

Will a Repackaged National Energy Board Be Able to Meet Canada’s 21st Century Challenges? https://t.co/mUOLZBeWMM @pcell_law #cdnpoli pic.twitter.com/jvpfOpB7vp

— DeSmog Canada (@DeSmogCanada) May 16, 2017

Ultimately, the Expert Panel concludes that the NEB should pass the torch to a newly created body: the Canadian Energy Transmission Commission (CETC). Though the NEB would cease to exist, the CETC would continue to carry on many of the NEB’s core technical and regulatory functions.  

A key challenge for the CETC will be to restore the trust of Canadians through a suite of recommended reforms aimed at “living the nation-to-nation relationship,” aligning energy infrastructure decision making with “national policy goals,” promoting public engagement, and improving regulatory efficacy.

Going forward, the Expert Panel recommends that new pipelines and other significant energy infrastructure should initially be assessed for their “alignment with the national interest.” This would be where climate impacts, cumulative effects, and Indigenous rights implications are considered. This process would conclude with a determination by Cabinet. 

If Cabinet gives its blessing, the CETC and the Canadian Environmental Assessment Agency would then jointly turn their minds to what the Report refers to as “licencing issues,” essentially ways to ensure that the various adverse impacts of the project under review are mitigated.

Stage one of the process would conclude within one year. Stage two, which could include public hearings and would culminate in a decision by the Joint CETC/CEAA panel, could take up to two years.  This bifurcation of the process, with an upfront ‘political’ decision by Cabinet followed by a technical review focussed on implementation issues, closely tracks what various business interests involved in the EA and NEB Modernization processes have been calling for.

Can a repackaged (yet not repurposed) NEB meet the array of 21st century challenges that await?  The approach recommended by the Expert Panel does not inspire confidence.

Nobody is arguing that the technical, safety and data collection functions currently vested in the NEB should be eliminated. These regulatory functions are important and need to be assigned to an appropriate government agency.

What the Expert Panel fails to address, however, is the need fundamentally to reform the assessment that major energy projects must undergo before we, as a society, allow them to proceed. These assessments must be capable of supporting informed, transparent and defensible social choices about future development.  This is quite different from regulatory processes that are principally aimed at mitigating anticipated harms.

For well over a generation, we have adopted an approach that allows projects, even quite ill-advised ones, to go ahead unless it can be shown that they will likely cause significant adverse effects, or if those effects can be justified on a vague “justified in the circumstances” rationale. 

One of the most noteworthy contributions of the Expert Panel report on reforming CEAA, 2012 was its recommendation that we move beyond this significance-based model, towards one that tethers project-level decisions to a rigorous assessment of whether the project will entail a net contribution to sustainability.

Pivoting from an approach that focusses on whether a project’s opponents can prove it will cause significant harms towards one that calls upon a project’s proponents to show it can be sustainable is an elegant reframing of what is often a dead-end debate. And a move that just might be a game changer.

Unfortunately, on this key point, the NEB Modernization Expert Panel report and the CEAA, 2012 Expert Panel report are like ships in the night. While regrettable, this failure to engage is not all that surprising.

The complexities of social choice have never been the NEB’s forté. The NEB Modernization Panel was assigned a triage mission whose overarching aim was to identify a set of core functions that can be properly assigned to Canada’s energy regulator.  In rolling back the NEB’s role to focus on regulatory issues, the Expert Panel’s report does precisely this.  

However, where this Expert Panel has failed, and where the CEAA, 2012 Expert Report adds enduring value, is in confronting the legitimacy crisis that pervades decision making around fossil fuel infrastructure development. In determining what advice to follow, the Trudeau government should bear this in mind.

Image credit: Zack Embree

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After six months of consultations, the National Energy Board (NEB) Modernization Expert Panel has delivered its long-awaited report.

The results are damning.

“In our consultations we heard of a National Energy Board that has fundamentally lost the  confidence of many Canadians,” the five-member panel wrote. “We heard that Canadians have serious concerns that the NEB has been ‘captured’ by the oil and gas industry.”

The 87-page report issued 26 key recommendations to repair the oft-criticized quasi-judicial tribunal, responsible for regulating interprovincial and international oil, gas and electricity projects.

Those include establishing a one-year review process by cabinet to ascertain whether a major project meets “national interest” prior to regulatory review, replacing the NEB with a “Canadian Energy Transmission Commission” and placing a broader focus on interprovincial transmission lines and renewable energy.

In addition, the panel recommended the government create a new agency responsible for collecting information about energy, relocate board headquarters back to Ottawa, considerably improve consultation with Indigenous peoples including an Indigenous Major Projects Office and extend the timelines for review of major projects (which were accelerated under the previous Conservative government).

“It’s clear that this is a pretty major confirmation of what we’ve been saying for years,” says Adam Scott of Oil Change International in an interview with DeSmog Canada.

“It’s basically saying that the National Energy Board as it stands today is a broken and outdated institution that’s not fulfilling its role, and not serving the best interest of Canadians. It was very good at the very beginning to see that acknowledgment: there’s a problem here, and we really need to do something bold to rebuild what the NEB is and figure this out.”

Trudeau Promised to Fix the National Energy Board. Here’s What His Expert Panel Recommends https://t.co/tkSQLYJcNz @james_m_wilt #cdnpoli pic.twitter.com/pb8I2Hh9re

— DeSmog Canada (@DeSmogCanada) May 16, 2017

Recommendations Include Prioritizing Renewables, Transmission Lines and Independent Information

According to Natural Resources Canada, the panel travelled to 10 cities, heard presentations from almost 200 people and received another 200 written submissions online.

Dan Woynillowicz, policy director at Clean Energy Canada, says in an interview with DeSmog Canada the recommendation to focus more on interprovincial transmission lines and renewables is “very consistent with the direction that the Pan-Canadian Framework on Climate and Clean Growth sets for the country.”

“As acknowledged in the report, so much of the focus and conflict right now has been around pipelines,” he says.

“But in making recommendations for how to approach this regulatory decision-making in the future, they need to make sure that expertise is being brought in on the electricity side [to address] the interprovincial nature of that.”

The creation of a proposed Canadian Energy Information Agency will also assist with this task, he says.

The NEB’s current “Energy Futures” projections are “always very conservative when it came to renewable energy” and largely disconnected with climate policies that have been put in place on both provincial and federal levels.

As the panelists wrote: “We heard over and over in public consultations in all the regions of Canada that the NEB appears to be operating in a national policy vacuum.”

Critics Flag ‘National Interest Designation’ As Giving Cabinet Too Much Say

However, experts have already voiced serious concern about the recommendation that federal cabinet have the ability to designate “national interest” for major projects.

In a statement, Erin Flanagan of the Pembina Institute noted: “The recommendation that the Government of Canada make up-front recommendations on the extent to which proposed projects align with national policy objectives lacks any discussion of trade-off rules or other guidance to ensure this process is not arbitrary.”

Similarly, Anna Johnston of West Coast Environmental Law said in a statement: “The NEB Panel’s recommendation for determining ‘national interest’ is putting the cart before the horse. How can you determine whether or not a project aligns with policy objectives, respects Indigenous rights or carries unacceptable risks before a full impact assessment is conducted?”

Indeed, it’s unclear how cabinet would adequately assess national interest before an environmental assessment is even conducted.

Patrick DeRochie, climate and energy program manager at Environmental Defence, says in an interview with DeSmog that there needs to be more clarification about how the NEB modernization would intersect with the proposed changes to Canada’s environmental assessment process, including issues like “net contribution to sustainability.”

“This national interest determination doesn’t actually spell out how we get to that, or why a project would be rejected within that process,” DeRochie says.

Flanagan also noted in her statement that Pembina is “disappointed” with the recommendation that environmental assessments of energy transmission projects (and energy transmission project alone) be conducted in collaboration between the proposed Canadian Energy Transmission Commission and Canadian Environmental Assessment Agency, as opposed to just the latter.

“Many experts agree that consistent application of [environmental assessment] law can only be achieved if all projects are reviewed under one set of rules, applied consistently,” she wrote.

Natural Resource Minister Suggests Government Won’t Adopt All Recommendations

Next up is a 30-day window for public comment on the report, closing on June 14, 2017.

Jim Carr, minister of natural resources, told reporters in Ottawa on Monday: “Now the government will ask Canadians what they think, and with other reviews that are happening now, come the fall, we’ll meet together as a government and determine the modernization of the National Energy Board and environmental assessment in Canada.”

In addition, he implied the government wouldn’t be accepting all 26 recommendations, telling the National Observer: “That means that we wouldn’t have any tough decisions to make, and I can tell you, we will have tough decisions to make.”

Woynillowicz adds that transmission projects that allow for more renewable energy and emissions reductions are still at risk of being held up because of an insufficient regulatory process, and that having these recommendations adopted will increase the likelihood that they’ll get built.

“I think it’s really positive that this review has happened,” he concludes. “Hopefully Minister Carr and the federal government will pay heed to these recommendations and move quite quickly to adopt them.”

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Hope may finally be in sight for fixing Canada’s environmental assessment process, after a four-member expert panel released a promising report on the heels of consultations in 21 cities across the country.

Historically, the focus of Canada’s environmental assessment has been on “avoiding harm” and “significant adverse impacts” associated with new projects, but the new approach recommended by the panel would shift the focus to a “net contribution to sustainability,” said Anna Johnston, staff counsel at West Coast Environmental Law.

“The recommendations that the panel has made address a number of the concerns that were raised by the scientific community,” said Aerin Jacob, conservation scientist for the Yellowstone to Yukon Conservation Initiative. “I was pleasantly surprised.”

A key recommendation is to establish an arms-length independent agency with a broad mandate to administer environmental assessments — including gathering information, conducting the review and making the final decision (although cabinet would retain the ability to appeal). This recommendation would take reviews out of the hands of other agencies, such as the National Energy Board.

Another crucial recommendation is for government to move to a model in which the proponent continues to fund the science, but the actual science itself will be provided by independent professionals hired by the government.

“It recognizes that environmental assessment has to be integrated with assessments of the various other impacts, the costs and the benefits,” said Chris Tollefson, executive director of Pacific Centre for Environmental Law and Litigation and a law professor at the University of Victoria. “So we’re moving from an environmental assessment regime to an impact assessment regime, which is a major step forward.”

Major Overhaul of Environmental Laws Possible

There are four expert review panels currently preparing reports for the federal cabinet on environmental and regulatory processes.

Each is taking on a distinct but interrelated piece of legislation: the National Energy Board Act, the Fisheries Act, the Navigation Protection Act and the Canadian Environmental Assessment Act.

Those pieces of legislation were dramatically altered in 2012, during the Conservative government’s overhaul of Canada’s environmental laws — which sparked widespread protests across the country.

The environmental assessment panel went to 21 cities, received more than 500 online submissions and  welcomed more than 1,000 participants at engagement sessions,” according to the government.

Shift Towards ‘Impacts Assessments’ Recognizes Holistic Nature of Project Impacts

The recommended shift from an “environmental assessment” to “impact assessment” might sound like a mere semantic quibble.

But Johnston said it represents a significant move towards a more holistic “sustainability approach” that considers social, cultural and economic impacts in addition to environmental impacts. The report also recommended that environmental assessments should be conducted and decisions made in collaboration with Indigenous governments.

“It makes it clear that we have to not just look at the biophysical impacts of the project — whether there’s going to be significant adverse environmental effects — but instead to look at projects and other proposals in a more holistic way that looks at their impacts on social, economic, cultural and other important components of Canadian society,” Tollefson explained.

However, Johnston notes the report didn’t include a recommended expansion of assessment for cumulative impacts, meaning the negative effects of development from smaller projects on a landscape may still not be adequately evaluated.

Information from Environmental Assessments to Be Made Public

There’s also the issue of information sharing.

Jacob of the Yellowstone to Yukon Conservation Initiative says that one of the things she’s most excited about is a recommendation to make all data from environmental assessments publicly available. While the details are still unclear, Jacob says it would include information sharing and both baseline and monitoring data.

“That’s really key,” she says. “It goes much beyond an individual project: this is about helping Canadians know more about our country. If implemented, that would be tremendously important.

“If you want to know that somebody did something carefully and following particular standards, you have to be able to see all the details of their methods,” she adds. “It helps us build upon the shared body of knowledge. That’s critical.”

However, Jacob notes there’s still ambiguity about the independence of information collecting: although the report is “really explicit” that the new body would be impartial and the lead authority, she says there would still be a reliance on proponent-driven data.

That’s where clarification on what “best available information” looks like is needed.

“I really want to emphasize that scientists of all stripes — whether they’re at universities, working in consultancy companies or NGOs — really care about being involved in this,” she said.

Federal Government Now Seeking Responses to Report

There’s now a public comment period that’s open until May 5, 2017, giving individuals or organizations the ability to respond to the recommendations in the report. Following that, the federal cabinet will decide on changes to legislation, regulations and policies, with the government listing the estimated window of fall 2017.

Johnston said she’s been working closely with government leading up to report, and confirms the government is considering significant legislative amendments. Tollefson added that there will be “momentum towards implementation.”

“This is a real opportunity to make a huge step forward; there may be disagreements on the details but in terms of the broad sweep this is an opportunity that should not be missed,” he said.

Only time will tell how many of the panel’s recommendations are implemented. But experts agree the review process itself has bolstered confidence in the government’s interest in public consultation, which Johnston said stands in stark contrast to the processes that resulted in the changes to the 2012 legislation.

“The panel has recognized that you just don’t get quality decisions when you don’t have public values and input included in that process, and you don’t have community buy-in if the community hasn’t been able to provide their thoughts,” she said.

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Want to modernize Canada’s National Energy Board (NEB)?

Bring the regulatory agency — first founded way back in 1959 when the realities of climate change weren’t readily known — into alignment with our carbon-constrained present.

That recommendation, coming from the Pembina Institute, comes in a report released Friday to coincide with the end of a federal review of the National Energy Board that brought an expert panel into halls and meeting rooms of 10 cities across the nation.

In the report, “Good Governance in the Era of Low Carbon,” the Pembina Institute states the review is an important opportunity to not only bring the mandate of the NEB into the 21st century, but also to restore public trust in what many see as a broken process.

The National Energy Board has been called a “captured regulator” that has “lost touch with what it means to protect the public interest,” by Marc Eliesen, former head of BC Hydro and former deputy minister of energy in Ontario and Manitoba.

Eliesen was one of many groups and individuals to publicly pull out of the NEB review of the Kinder Morgan Trans Mountain pipeline after the process was called “fraudulent” and an act of "public deception."

“Over the last decade, energy infrastructure proposals — including fossil fuel projects like oilsands pipelines and renewable energy development like wind farms — have become increasingly contentious across Canada,” the Pembina report states.

Modernize the National Energy Board? Here’s How https://t.co/CUp1RVOETT @Pembina #cdnpoli #NEBreview

— DeSmog Canada (@DeSmogCanada) March 31, 2017

“Public trust in energy decision making is at an all-time low, brought on by rapidly changing realities in, and expectations of, the energy sector.”

Erin Flanagan, federal policy director with Pembina and lead author of the report said changes to the NEB could help temper public skepticism by bringing the activities of the agency into alignment with Canada’s climate commitments.

“Canadians need an unbiased and trusted energy regulator capable of supporting Canada’s clean growth agenda,” Flanagan said.

Under the Paris Agreement Canada has committed to reduce emissions 30 per cent below 2005 levels by 2030.

Yet the approval of major fossil fuel projects and infrastructure by the federal government have many wondering how growth in Canada’s energy sector will square with low-carbon commitments.

“National Energy Board modernization is Canada’s opportunity to turn the corner on frustrated project reviews, and instead build processes that work for all interested parties and ultimately deliver credible recommendations to government.”

The report recommends the NEB consider the climate impacts of projects as well as the impact of new projects on Canada’s climate commitments.

“In its current function the NEB…fails to assess climate change impacts in its activities, from project reviews to data production and monitoring,” the report states.

A modernized NEB would apply best-available climate science to project reviews, keep project approvals in line with low-carbon goals and protect the long-term interest of Canadians by quantifying the climate risk associated with projects. 

Currently the NEB does not incorporate an analysis of how energy projects will impact Canada's climate committments, nor does it define what is meant by "public interest."

“The federal government has an opportunity to build on the NEB’s core competencies by ensuring it has a mandate to produce energy data consistent with successful implementation of the Paris Agreement," Lindsay Wiginton, analyst with the Pembina Institute and co-author of the report, said. 

"This is an essential requirement for Canada: data produced by the NEB is widely used for energy policy development and planning across the country, and it should reflect our climate commitments.”

The report also recommends reforms to how and what projects are submitted to the NEB for assessment.

“National and sub-national governments must implement and enforce climate policy commensurate with achieving Canada’s domestic and international climate commitments. This will encourage (though not guarantee) the selection of projects that support Canada’s transition to a decarbonized economy before they arrive at the regulator.”

In addition to addressing climate impacts, the NEB should also operate in a manner that supports Canada’s commitment to respect the rights and title of indigenous peoples, including facilitating the 94 “Calls to Action" intoned in the findings of the Truth and Reconciliation Commission.

Federal project approvals of the Site C dam, the Kinder Morgan Trans Mountain pipeline and the Pacific Northwest LNG terminal in B.C. have each been met with legal challenges from local First Nations who argue the approvals violated aboriginal rights and title or the principle of free, prior and informed consent.

“Modern regulators should conduct their work in the spirit of reconciliation with Indigenous peoples,” the report states, adding changes to legislation made in 2012 unnecessarily limited public participation in project assessments.

A lack of public participation and perceived transparency has also damaged the NEB’s reputation and the credibility of its processes, the report finds.

Pembina recommends a revised energy project review “support systems for the full and meaningful participation of the public and any interested parties” and ensure “provisions for ensuring the independence of commissioners, participating experts and project documents are in place.”

In September a three-member NEB panel recused itself from the review of TransCanada's Energy East pipeline, after the National Observer revealed the panelists quietly met with former Quebec Premier Jean Charest who at the time was working for TransCanada. 

“Public trust in the NEB is at an all-time low because of its perceived (and/or real) state of industry capture and the politicization of its decision-making," the report states, recommending energy regulators be "independent of bias and interferences from government and non-government stakeholders."

The Pembina Institute submitted the report to the expert panel charged with reviewing the NEB. The panel will make recommendations to Natural Resources Minister Jim Carr by May 15, 2017. 

Image: Prime Minister Justin Trudeau and Natural Resources Minister Jim Carr. Photo: Government of Canada

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The National Energy Board (NEB) is a “captured regulator” that has “lost touch with what it means to protect the public interest.”

That’s what Marc Eliesen — former head of BC Hydro, Ontario Hydro and Manitoba Hydro, and former deputy minister of energy in Ontario and Manitoba — told the NEB Modernization Expert Panel on Wednesday morning in Vancouver.

“The bottom line is that the board’s behaviour during the Trans Mountain review not only exposed the process as a farce, it exposed the board as a captured regulator,” he said to the five-member panel.

“Regulatory capture exists when a regulator ceases to be independent and objective.”

The Trans Mountain pipeline was reviewed with what many consider a heavily politicized NEB process, one that Trudeau had committed to changing prior to issuing a federal verdict on the project.

That process included what Eliesen describes as gutted environmental legislation, the removal of “essential features of a quasi-judicial inquiry” including the cross-examination of evidence and the limiting of participation of intervenors in such a way it “predetermined the outcome in favour of the pipeline proponent.”

Eugene Kung, staff counsel at West Coast Environmental Law, said in an interview with DeSmog Canada that the hearings for the project were the worst he’s seen in almost 10 years of practising regulatory law.

But that doesn’t seem to be an accident. Eliesen — who withdrew as an intervenor from the NEB review of the Trans Mountain project in 2014 due to the “fraudulent process” — argues the problems go far deeper than just the Trans Mountain review, predominantly linked to the “revolving door” between industry and the board.

“This ‘modernization’ is some spinmaster’s term,” he said. “It’s about public trust and the fact the NEB has lost this trust to the Canadian public.”

Move of NEB Head Office to Calgary Arguably Compromised Independence

In 1991, the NEB’s head office was moved to Calgary, and legislation was changed to require all permanent members to reside in Calgary.

It’s a decision that Eliesen says was completely unexpected and ultimately a political move by former Prime Minister Brian Mulroney; most other regulatory agencies are located in Ottawa to prevent being influenced by the industry in which they’re supposed to regulate (including finance regulators, even though Toronto is often considered Canada’s finance city).

If it was indeed politically driven, the plan seems to have worked.

More than two-thirds of the staff didn’t move to Calgary, and their positions were subsequently filled by former employees of the oil and gas sector. This has resulted in what some call a “revolving door” between the two; as Eliesen pointed out in his presentation, some former NEB chairpersons have been inducted into the Canadian Petroleum Hall of Fame.

“I’m not suggesting any nefarious activities,” he says. “It’s just that you adopt the headspace and the attitude of the energy industry of Alberta. When you have the legislation changed as well to ensure that all the permanent members reside in Calgary, then you have a major, major bias.”

It’s something he argues got worse under former prime minister Stephen Harper, who took full advantage of it in his final months (appointing many former industry veterans to key positions with the board, including Steven Kelley, who previously worked as a consultant for Kinder Morgan on the Trans Mountain project).

Even one of the five members of the NEB Modernization Expert Panel previously served as president of the Canadian Energy Pipeline Association. That same person, Brenda Kenny, signed a 2011 letter to key cabinet ministers petitioning for regulatory overhaul.

“She is in a real conflict of interest,” Eliesen says. “She’s the last person to be on a panel trying to evaluate how to bring back to the public trust to the National Energy Board.”

How to Fix the National Energy Board, Canada's Captured Regulator https://t.co/mHjDbb2iRj #cdnpoli #EnergyEast #TransMountain @james_m_wilt pic.twitter.com/8So7hzWUQ1

— DeSmog Canada (@DeSmogCanada) February 10, 2017

Many Structural Changes Required to Fully ‘Modernize’ the NEB

Kung, who also presented to the expert panel on Wednesday, expressed concerns about the relationship between the NEB and industry. He says there are many structural ways that such capture can be fixed.

Currently, the NEB receives a majority of its funding from industry, something Kung suggests should be addressed.

Its “very important role” in data collection and forecasting (such as the exhaustive “Canada’s Energy Futures” reports) don’t currently consider climate commitments such as the Paris Agreement, with the latest NEB report imagining a “business-as-usual” world that features an increase of four to six degrees Celsius in average global temperatures. That’s another thing that Kung says needs to change in the modernization.

Patrick DeRochie — climate and energy program manager at Environmental Defence — agrees, arguing that the NEB needs to better align climate and energy policy: “It’s not there right now. With this energy transformation we’re seeing for renewables right now, it’s not adequate. We need to bring that into the 21st century.”

(Conversely, Eliesen disagrees and suggests the NEB be solely a quasi-judicial agency and the energy information and advisory mandate be removed).

A key concern for Kung is also about NEB personnel. He acknowledges the board possesses technical expertise and that it’s tricky to find that kind of knowledge in people who haven’t worked in the industry at some point.

“But the way you can separate it structurally is making their role slightly different so they’re not making a decision, for example, about national or public interest,” he says. “Because that’s an impossible decision to make by a captured regulator.”

Proposed Solutions Include Replacing Board Members, Relocating Head Office

Eliesen proposed two major solutions to the review panel.

First, remove all current board members and replace them with people that reflect a broad range of background and expertise, not just the oil and gas industry. And secondly, relocate the NEB’s head office back to Ottawa.

These two decisions would create a firewall of sorts between industry and the board.

In addition, he suggested that environmental assessments be undertaken outside of the NEB, enforcement of pipeline safety be increased, and proponents be required by the NEB to provide alternative routes for pipelines.

Vancouver was only the third stop of 10 for the expert panel. The final “engagement session” in Montreal will conclude on March 29.  The panel is required to submit a report and recommendations to the Minister of Natural Resources around May 15.*

It’s a timeline that DeRochie suggests has made the process “really rushed,” noting that some of the 12 discussion papers weren’t even posted on the NEB Modernization Panel website by the time the first engagement sessions started in Saskatoon. However, DeRochie presented at the engagement session in Toronto on Feb. 1, and said that he went in “kind of cynical” but emerged feeling like they “really did seem like they wanted to engage us and fix this regulator.”

“It’s either get this right or face a bunch of political and legal challenges to every single energy project moving forward,” he says. “I think all stakeholders — industry, government, indigenous communities and ENGOs — want to avoid that.”

* Update: Feb 9, 2017. This article originally stated the panel report was due March 31, as stated on the National Energy Board's website. However, the date has been updated to May 15, as stated in the National Energy Board's terms of reference for the review panel.

Images: Natural Resources Minister Jim Carr. Photo: Canada 2020 via Flickr (CC BY-NC-ND 2.0)

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