As police enforce a court injunction against two Indigenous camps standing in the way of a proposed B.C. pipeline, the authors of a new report say their research indicates the RCMP’s action against Wet’suwet’en land defenders will be neither fair, nor objective.

Jeffrey Monaghan of Carleton University and Miles Howe of Queen’s University outline in a new report published in the Canadian Journal of Sociology how RCMP assess individual activists according to political beliefs, personality traits, and even their ability to use social media.

The report says government and RCMP documents uncovered through access to information requests indicate the police are not assessing Indigenous protests in Canada based on factors of criminality but are more concerned about the protestors’ ability to gain public support.

It also shows the government’s risk assessments of Indigenous protests, court injunctions initiated by private corporations against Indigenous people, and RCMP policing tactics all favour corporate interests and private property rights over Indigenous rights and title.

This includes the current resistance by land defenders and hereditary chiefs to the Coastal GasLink LNG pipeline slated to run through unceded Wet’suwet’en territory.

Intelligence compiled on Indigenous activists

Checklists developed by RCMP Director of Research and Analysis Dr. Eli Sopow as part of the National Intelligence Coordination Centre’s 2014-2015 Project SITKA reveal “it’s not criminality the RCMP are focused on, it’s the ability of that group to create and craft a counter narrative to the one that suggests whatever the police do is across the board legitimate,” Howe told APTN News in a phone interview.

Howe, a former journalist with the Halifax Media Co-op, covered the Mi’kmaq resistance to fracking in New Brunswick in 2013 and was arrested during a military-style raid of land defenders near Elsipogtog.

He wrote a book detailing the anti-fracking movement and the RCMP’s response to Indigenous people asserting their Indigenous and treaty rights.

Howe, a 2018 Vanier scholar and PhD candidate in Queen’s department of cultural studies, is delving deeper into the state’s policing and surveillance of Indigenous protests and movements.

His collaboration with Monaghan, an assistant professor of criminology, builds on a body of work developed by Monaghan and Andrew Crosby, a coordinator with the Ontario Public Interest Group at Carleton University.

Monaghan and Crosby used access to information laws to uncover thousands of pages of documents from the RCMP, CSIS and government agencies. They detailed their findings in the 2018 book “Policing Indigenous Movements.”

They paint a picture of how government departments, police, intelligence agencies and private sector interests work together to compile intelligence on activists — including Indigenous land defenders — and rate them according to the risk they pose to “critical infrastructure” such as pipelines, and to Canada’s “national interest.”

The authors write that the efforts represent a “new dynamic of policing” that aims to “suppress efforts [by Indigenous people] that challenge colonial control of land and resources.”

They say the RCMP are “not merely [part of] an objective or neutral policing entity but an active supporter of extractive capitalism and settler colonialism.”

RCMP efforts to control the public narrative

Their findings counter a common narrative communicated by the RCMP when responding to Indigenous land defence actions — that the federal police respect people’s right to protest and only act in the interests of public safety.

As part of their research Monaghan and Crosby uncovered previously classified documents on the Unist’ot’en clan of the Wet’suwet’en Nation, some of whose members have built dwellings, a healing centre, and have blocked industry access on their unceded lands for almost a decade.

The bunkhouse at the Unist’ot’en camp. Photo: Unist’ot’en camp / Facebook

Unist’ot’en ‘ideological and physical focal point of Aboriginal resistance’: government report

The researchers shared some of those documents with APTN, including a Government Operations Centre (GOC) report that labelled one of the Unist’ot’en leaders an “aboriginal extremist” and assessed the group based in part on the level of public support they had at the time, in 2015.

The document anticipated that TransCanada, the company overseeing the project — which would carry fracked natural gas from Dawson Creek, B.C. through Wet’suwet’en territory to tidewater at Kitimat — might apply for an injunction in April of that year.

That didn’t happen, but the document reveals that the government, based on information provided by the RCMP, considered the Unist’ot’en the “ideological and physical focal point of Aboriginal resistance to resource extraction projects” and acknowledged that arresting Unist’ot’en members had potential to trigger protests in other regions of Canada.

Monaghan said the document included revealing language, including reference to the pipeline as “critical infrastructure” and “risk to the national interest resulting from a blockade or protest against the proposed TransCanada Coastal Gaslink liquefied natural gas (LNG) pipeline” (which at the time they determined was “medium-low”).

He said the intelligence-gathering and GOC risk assessment are “not to govern some kind of national security threat or stop crime,” but are instead “about getting this project through, making sure that the enforcement of [an eventual] injunction happens, and that it happens with a low media cost, a low negative public opinion.”

Crosby said the public should anticipate police raids of the Unist’ot’en camp, or of the recently erected Gidimt’en check point along the same access road near Smithers, B.C., will be accompanied by an effort to control the public narrative around the events.

“We can be sure that whatever happens, [authorities are] going to want to ensure that it’s their spin, their version of what happens,” he said.

He said Indigenous sovereignty and the principle of free, prior and informed consent “have become obstacles to Canada’s ambitions to produce and export [fossil fuels].”

On Nov. 26 Coastal GasLink applied to the B.C. Supreme Court for injunctive relief, arguing that if further prevented by the Unist’ot’en from doing necessary work the LNG project could suffer “irreparable harm.”

B.C. Supreme Court Justice Marguerite Church approved the injunction application in mid-December.

Days later members of the Gidimt’en clan of the Wet’suwet’en Nation set up an access point in their own territory, about 20 kilometres down the same road as the Unist’ot’en camp.

The court injunction was then amended to include that blockade.

On Monday, January 7, RCMP conducted an armed raid of the Gidimt’en checkpoint, arresting 14 individuals. Another raid on the Unist’ot’en check point is expected to take place.

RCMP pass the Gidimt’en checkpoint on January 7, 2019. Photo: Michael Toledano

The Unist’ot’en and Gidimt’en, with the support of their hereditary chiefs, maintain that the band council system — created under Canada’s Indian Act — only has jurisdiction over reserve lands, not the 22,000 square kilometres of unceded Wet’suwet’en territory.

They have repeatedly referred to the 1997 Supreme Court of Canada (SCC) Delgamuukw decision, which acknowledges their traditional governance system and the names of hereditary leaders who now oppose the LNG pipeline.

The Unist’ot’en began constructing their camp in 2010 and in recent years have brought a healing centre to fruition, where they use traditional medicines and land-based practices to heal members of their Nation from addiction and other health issues rooted in the traumas of residential schools and colonization.

Carmen (1 of the 14 arrested, in the #Gidimten raid by police), had her restrictions lifted, and looks forward to going back out to the #Yintah We stand with #Unistoten #WetsuwentenStrong pic.twitter.com/oMPExVZQoP

— Gidimt’en Checkpoint (@gidimt) January 14, 2019

While band leadership has said their communities need the money and short-term jobs the project will create, traditional leaders say Wet’suwet’en laws place a duty on their people to protect the land, water and wildlife for future generations.

RCMP worked to ‘surprise and overwhelm the Wet’suwet’en poeple’

But none of this — from the Supreme Court of Canada’s acknowledgement of Wet’suwet’en territory and traditional governance systems in the Delgamuukw decision, to the question of who makes decisions on behalf of the wider Wet’suwet’en Nation — are factored into the police and government intelligence that is informing the RCMP in their approach to dealing with the Unist’ot’en and Gidimt’en.

The 2015 Government Operation’s Centre document describes the unnamed “aboriginal extremist” leading the Unist’ot’en as an individual “who rejects the authority of the Crown over his perception of what constitutes traditional territories.”

Sabina Dennis from the Dakelh Cariboo Clan at the Gidimt’en checkpoint, January 7, 2019. Photo: Michael Toledano

In early January, responding to a request for information about police presence in the area, an RCMP spokesperson told APTN she understood there were “less than a dozen officers in the Smithers’ area,” and that they were “continuing to monitor the situation.”

Cpl. Madonna Saunderson said the injunction and accompanying police enforcement order from the court “recognize the RCMP’s discretion to decide how and when to enforce the injunction…within a reasonable time.”

“The primary concerns of the police are public safety, police officer safety, and preservation of the right to peaceful, lawful and safe protest, within the terms set by the Supreme Court in the injunction,” she said.

“We are very hopeful that there will not be violence or disorder as we enforce the court order; however, the safety of the public and our officers is paramount when policing demonstrations, particularly due to the remote area in which the bridge is located.”

Members of the Gidimt’en clan offered a different account.

They said a meeting with members of the RCMP Aboriginal Police Liaison Unit prior to the RCMP’s enforcement of the injuction  indicated to them that “specially trained tactical forces will be deployed to forcibly remove Wet’suwet’en people from sovereign Wet’suwet’en territory,” according to a post on the Gidimt’en clan Facebook page.

“Police refused to provide any details of their operation… including the number of officers moving in, the method of forcible removal, or the timing of deployment,” the Facebook post reads.

“By rejecting the requests for information… the RCMP indicated that they intend to surprise and overwhelm the Wet’suwet’en people who are protecting their territories on the ground,” the post added.

“The RCMP’s ultimatum, to allow TransCanada access to unceded Wet’suwet’en territory or face police invasion, is an act of war.”

Hereditary Chief Na’Moks said he believes the RCMP’s coordination of action was timed with personal grievances within the Unist’ot’en clan’s membership, including the recent illness and death of one leader’s mother.

“They’re well aware of what’s going on; this is part of their strategy,” he said, adding the RCMP indicated it would deploy officers from outside the region.

“Mounties stated it would not be local officers that would move in,” he said. “They would bring in outside RCMP.”

“Personally, I believe — and so do the other chiefs — [that] they don’t want to have local police targeted or identified.”

Over the weekend, prior to the RCMP action, images and rumours circulated on social media that RCMP officers had begun to arrive in the region.

Responding to those reports the Gidimt’en posted the following message on their Facebook page: “We are not protesters. We are Wet’suwet’en. We are lawfully and peacefully living on our lands as we have since time immemorial. We call for all that can join us to do so immediately, on our homelands or where you stand. These lands will always be Wet’suwet’en.”

The day before the RCMP raid, one of the people managing the Gidimt’en Facebook page said there were currently women and elders at the camp, and that visitors have been bringing their children. They did not confirm the number of individuals at the camp.

A spokesperson for the Unist’ot’en camp and access point said as a policy they do not disclose the number of people at their location at at given time.

Howe called the RCMP’s statement to APTN “classic” and said they’re following the same pattern discussed in his, Monaghan’s and Crosby’s research.

“They’ve cast the notion that there’s a rational group, and that rational group can protest in a manner defined by the law.”

“There’s a law on the books now and we have to enforce it,” he continued, referencing the injunction and paraphrasing the RCMP’s perceived logic. “And we hope that nothing happens to anybody, but if it does it’s because we’re there to protect public safety.”

Howe says the statement is part of the police’s effort to construct a narrative that depoliticizes Indigenous peoples’ defence of their lands and rights, while justifying the RCMP’s potential removal of Indigenous people from their territory.

“So you’ve removed any reference at all to the very fact that all they’re doing is simply enforcing the desires of a resource extractive company, which is to get that pipeline built,” he said.

With files from Kathleen Martens.

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Eleven of Canada’s largest oil and gas companies have dozens of subsidiaries and related companies in known tax haven jurisdictions, according to a new report from the Ottawa-based non-profit Canadians for Tax Fairness.

Those companies include Suncor, Enbridge, CNRL, TransCanada, Imperial Oil, Cenovus and Husky.

The report, titled “Bay Street and Tax Havens: Curbing Corporate Canada’s Addiction,” examined the largest 60 companies listed on the Toronto Stock Exchange and found that just four didn’t have a publicly listed subsidiary in a known low-tax or no-tax haven.

“If you can afford the lawyers and accountants and it’s legal to do, you’ll do it,” report author Diana Gibson, told DeSmog Canada.

“Maximizing shareholder returns is the job of the CEOs and if it’s legal to avoid taxes then they will.”

Knowing how pervasive the issue is among oil and gas companies in Canada is important in order to pressure lawmakers to act, Gibson added.

“We’re not talking about slapping the hands of a couple of folks — we’re talking about a problem that needs to be fixed in the legislation.”

The new report shows companies like Enbridge and TransCanada are in line with global oil and gas industry practices. In 2015, a federal parliamentary inquiry in Australia found ExxonMobil and Chevron hold a combined $87 billion USD in tax havens.

Canadian Oil and Gas Companies Own a Combined 46 Entities in Tax Haven Countries

The report arrives on the heels of the explosive Paradise Papers, which contained 13.4 million confidential documents implicating many renowned figures — including the Queen, Bono and three former Canadian prime ministers — in the legal but ethically dubious practice of storing money in offshore tax havens.

The revelations also come as many oil and gas companies claim government policies such as methane regulations, carbon pricing or higher royalty rates create undue financial burdens and could cripple their business case.

“We constantly hear these stories about these large corporations — particularly oil and gas corporations in Alberta — operating on the margins: that they can barely make ends meet; that any shift will ultimately affect their bottom line and cost jobs and all of those things,” Ricardo Acuña, executive director of the Parkland Institute, told DeSmog Canada.

Those common talking points paint of picture of an industry without profits to hide, Acuña said.

The new report contradicts that, he said.

In total, the report calculated that oil and gas companies own a combined 21 listed subsidiaries and 25 companies inferred to be related.

These were identified by using information from corporate filings and company registries.

There could be more: Gibson from Canadians for Tax Fairness said the figures in the report are likely incomplete due to a lack of transparency required from companies.

Enbridge, TransCanada Among 11 Canadian Oil and Gas Firms Using Tax Havens https://t.co/iDlneUBXEv #cdnpoli @CdnTaxFairness @ParklandInst #oilsands

— DeSmog Canada (@DeSmogCanada) November 16, 2017

Canadian Direct Investment in Tax Havens Grew A Hundredfold in 20 Years

The report’s definition of a “tax haven” provided by the Organisation for Economic Co-operation and Development (OECD), has four simple components: an extremely low or non-existent tax rate, a separation of tax rates from the country’s regular economy, a lack of regulatory supervision and an absence of information exchange.

In other words, a region where money is kept solely to house excess profits that people or corporations wish to remain untaxed.

The best known tax havens are based in Caribbean countries, including Barbados, Bermuda, the Cayman Islands and the Bahamas. The U.S. state of Delaware actually served as the most popular location for Canadian companies to house their money, sporting 472 subsidiaries from only 60 companies.

It’s virtually impossible to know how much companies actually store in these jurisdictions.

But as noted in the report, Canadian foreign direct investment (FDI) into the top 10 tax haven jurisdictions has increased from $2.1 billion in 1994 to more than $284 billion in 2016.

While companies might claim that such a spike is associated with productive investments, there’s a complete disconnect from local employment: in Bermuda, there’s only one person hired for every billion dollars in assets, increasing to a mere 16 people per billion in Barbados.

Dozens of notorious tax treaties and tax information exchange agreements (TIEAs) allow for the easy transfers of money between jurisdictions.

“We don’t know how much of this money is being hidden, how much of it’s being legitimately invested,” Acuña said.

“We’re trying to piece this together from information we don’t have. The government needs to crack down on what companies have to report out when they’re moving money around and in terms of their foreign direct investment.”

Canada Losing Estimated $10 Billion to $15 Billion Per Year

The report found Canada was missing out on an estimated $10 billion to $15 billion in taxes per year from the 60 companies listed.

Four of the oil and gas companies identified in the report were also listed in Canadian Business magazine’s 2014 investigation into corporations that were paying “unbelievably low tax rates.”

That investigation reported that over the course of a decade, CNRL, Enbridge, TransCanada and Suncor only paid between 13.6 per cent and 15.6 per cent of their income in taxes.

While companies like CNRL and Suncor receive significant deductions due to capital costs and royalty payments, such percentages are still extremely low when compared to the average Canadian’s tax rate of 42 per cent.

As noted by Acuña, it’s not enough to just increase corporate income rate rates or revamp the nonrenewable resource royalty framework if companies can continue to move their profits to low-tax jurisdictions. Such a move would have to be paired with a serious clampdown on rules about tax havens.

“The issue is that the law needs to change,” Gibson said. “You can’t crack down on legal tax avoidance.”

Billions Likely Needed in Coming Decades to Cover Environmental Costs

Gibson pointed to NDP MP Murray Rankin’s recently proposed private member’s bill as a good first step.

Bill C-362 would amend the Income Tax Act to deny tax breaks to financial transactions that “lack real economic substance.” That would ensure that earnings are taxed properly in the jurisdiction in which they’re made.

The report made several other recommendations. Those include requiring the Canada Revenue Agency to compile actual information and data on tax havens, renegotiating tax treaties to set a minimum threshold for tax rates, and taking a much stronger international leadership role.

Such conversations may take on additional urgency in coming years as costs of environmental and climate liabilities continue to mount for various levels of government, although Acuña expressed some skepticism about the federal government acting given Finance Minister Bill Morneau’s recent run-ins with similar issues.

“It sure looks like oil and gas companies are raking in the profits and stashing them away in tax havens, while Canadians are stuck with the mess they leave behind, including toxic tailings ponds, oil spills, and climate damages,” Patrick DeRochie, climate and energy program manager at Environmental Defence, told DeSmog Canada.

“Once you take away all the oil and gas subsidies and the money stowed away in tax havens, and start accounting for the massive costs to the environment and public health, you get an industry that is no longer economical.”

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TransCanada’s Energy East pipeline is officially dead.

Announced via press release on Thursday, the news confirmed long-held suspicions that the $15.7 billion, 4,500 km oilsands pipeline simply wouldn’t cut it in today’s economic context.

But that hasn’t stopped commentators on all sides from pouncing on the cancellation as proof of their political project. Conservative politicians have lambasted the federal Liberals for introducing carbon pricing and new rules on pipeline applications, while environmentalists have claimed the company’s decision was a direct result of their organizing.

DeSmog Canada is here to help wade through the mess. Here are five things you should know about the cancelled Alberta-to-New Brunswick pipeline.

1. Energy East was primarily for export

Perhaps the most lingering myth about Energy East was that it would be built to displace foreign oil imports in Eastern Canada.

In fact, that very notion was repeated by Alberta Premier Rachel Notley in her Facebook post about the cancellation: “We believe this nation-building project would have benefited all of Canada through new jobs, investment, energy security and the ability to displace oil being imported into Canada from overseas and the United States,” she wrote.

Except it’s never been true.

An application by TransCanada to the National Energy Board back in May 2016 indicated that it would ship an estimated 281 tankers per year of oil, equivalent to about 900,000 barrels per day. That’s more than 80 per cent of the pipeline’s planned 1.1 million barrel per day capacity, leaving around 200,000 barrels per day to be refined at New Brunswick’s Irving Oil refineries.

That’s far below the 736,000 barrels per day that TransCanada suggested is being imported from foreign countries due to a lack of a west-to-east pipeline. In addition, Irving Oil’s president suggested in 2016 that his company wouldn’t necessarily displace its use of cheaper barrels from Saudi Arabia with product from Alberta.

Energy East was never about energy independence. The whole point was to ship oil by tanker to the U.S. Gulf Coast for refining.

2. Canada’s regulatory process is catching up with reality

Back in early September, TransCanada requested that the National Energy Board suspend its review of the Energy East project for 30 days.

That followed news that the review panel for the pipeline would be evaluating the climate impacts of upstream and downstream emissions associated with the project: a first for any major Canadian pipeline. (The Keystone XL pipeline in the U.S. was also subject to a climate test.)

It’s something that many industry boosters have now locked on to as the pipeline’s deathblow.

What’s often left unacknowledged is that Canada has committed to international climate change goals under the 2015 Paris Agreement, requiring the country to slash 230 megatonnes in annual greenhouse gas emissions by 2030. That’s where policies like the federal carbon pricing mandate and the overhaul of the National Energy Board and Canadian Environmental Assessment Agency can come into play, integrating climate tests into the very fabric of reviews.

In addition, many critics conveniently fail to mention that the entire National Energy Board review process for Energy East was suspended with all decisions thrown out because the National Energy Board privately met with TransCanada consultant and former Quebec premier Jean Charest.

The complete restarting of the process and inclusion of a climate test was the price of doing business in a country ostensibly committed to reducing greenhouse gas emissions and introducing transparent environmental reviews.

3. Canada doesn’t necessarily need more pipelines

Energy East was the last of the big four Canadian pipelines to get underway.

Kinder Morgan’s Trans Mountain and Enbridge’s Line 3 pipelines were both approved by the current Liberal government, while TransCanada’s Keystone XL was resuscitated with the election of U.S. President Donald Trump.

All offer better prices for exporters. As noted by University of Alberta professor Andrew Leach, shipping crude to New Brunswick via Energy East would cost $10/barrel, far higher than other networks.

That matters a lot given heavily reduced forecasts for oilsands production in coming decades. The Canadian Association of Petroleum Producers now estimates that oilsands production is expected to hit 3.7 million barrels per day by 2030. That’s down from their 2013 forecast of 5.2 million barrels, when Energy East was first announced.

In other words, Alberta at most  needs an additional 1.3 million barrels of pipeline capacity by 2030. Just two of the three aforementioned pipelines would easily allow for that.

And that’s to say nothing of Alberta’s cap on oilsands emissions of 100 megatonnes per year (for comparison purposes, Ontario plans to reduce all of its emissions to 115 megatonnes by 2030).

Unless there are substantial technological innovations that cut per-barrel emissions, it’s expected that the province will hit its emissions cap by 2030. That calls into question the need for several of the pipelines that are further along in the process, let alone Energy East.

5 Things You Need to Know About the Cancellation of #EnergyEast https://t.co/yUPyOUruzy #oilsands #climate #cdnpoli #keystonexl pic.twitter.com/6jJV9KqGLd

— DeSmog Canada (@DeSmogCanada) October 6, 2017

4. The majority of Canadians want to decrease oil demand

Spend too much time in the “Canadian politics” corner of Twitter and you might be inclined to believe that the average Canadian overwhelmingly favours increased oil and gas development.

But that’s not at all the case, based on recent polling numbers by Abacus data.

A poll published in September noted that 55 per cent of people would prefer to see demand for oil drop in the coming decade, with 65 per cent wanting to see a decline in the next 30 years. Even in Alberta, there are more people who wish to see oil demand decline in 10 years (38 per cent) compared to people who want to see oil demand increase (28 per cent).

There’s also been a marked drop in support for pipelines. In 2014, 58 per cent of Canadians supported building more pipeline capacity. Now, that number has dropped to 44 per cent.

In addition, when asked “recently, I’ve grown more worried about climate change and it is changing my view of how long we should use oil,” 22 per cent of people said “strongly agree” while another 37 per cent said “agree.”

This clear shift in public opinion is in line with the global consensus that the world needs to rapidly reduce emissions to avoid the worst of climate change.

5. This was about harsh economics

Environmental organizations across the country loudly celebrated in the wake of the cancellation. To be sure, Indigenous and environmental organizing has greatly raised the public profile of major pipeline projects like Energy East and arguably contributed to delaying the process while market conditions changed. But it’s seriously doubtful that the project would have been cancelled if oil prices were hovering in the $70-plus/barrel range and the company’s Keystone XL project was still blocked by the U.S.

TransCanada couldn’t make the numbers work. There was enormous unused capacity risk at play. To proceed with a multi-decade project in an era of sustained low oil prices and depressed production forecasts would have been a baffling decision.

Now, the company only faces a $1 billion charge to write down the project instead of $16 billion in capital expenses that might not ever be recovered. This move also allows them to focus more on making Keystone XL happen, and investing in markets with less immediate competition.

It doesn’t have quite the same inspirational tone to it. But hey, that’s capitalism for you.

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Canadian pipeline company TransCanada announced today it will no longer be proceeding with its proposed Energy East Pipeline and Eastern Mainline projects.

“After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications,” said president and CEO Russ Girling in a statement released Thursday morning.

The $15.7 billion Energy East pipeline planned to transport 1.1 million barrels of oil per day from western Canada’s oilsands to refineries in Quebec and Saint John, New Brunswick, as well as an export terminal in New Brunswick.

In late August, the National Energy Board — an independent regulatory agency that oversees international and inter-provincial oil and gas pipelines —  announced it would consider upstream and downstream greenhouse gas emissions in determining whether the Energy East pipeline was in the national interest. This marked a first for the board, which had come under fire for not considering climate impacts in other pipeline hearings.

Both Enbridge’s Northern Gateway pipeline and Kinder Morgan’s Trans Mountain pipeline received regulatory approval with no consideration of their impacts on greenhouse gas emissions.

TransCanada asked the National Energy Board to put its regulatory review hearings on hold while it reviewed the decision to include an assessment of the pipeline’s impact on greenhouse gas emissions.

The decision to abandon the project comes amid low oil prices and an expected slow-down in oilsands production. Several international companies have sold off oilsands projects in the past year.

“The reason that Shell, Total and Statoil are pulling out, and the reason that Exxon has had to write down much of its Kearl Lake reserves, isn’t because of the emissions profile of the oilsands bitumen,” Jeff Rubin, senior fellow of Centre for International Governance Innovation, told DeSmog Canada in March. “It’s rather because it doesn’t make any economic sense, before we even look at emissions pricing.”

TransCanada Cancels Energy East Oilsands Pipeline. What now? https://t.co/eiNT24HaC9 #EnergyEast #cdnpoli #oilsands #climate pic.twitter.com/alGcqImBXb

— DeSmog Canada (@DeSmogCanada) October 5, 2017

In November 2015, the Alberta government announced its climate plan, which gained support from a wide range of environmentalists and the CEOs of Suncor, Canadian Natural Resource Ltd. (CNRL), Shell and Cenovus.

The plan caps oilsands emissions at 100 megatonnes per year. Environment Canada figures predicted a 2020 output of 103 megatonnes from the sector, so for production to expand beyond current projects, per barrel emissions will need to be reduced.

Pipelines have become a symbol of the larger debate about climate change, with new pipeline proposals threatening to enable increased oil production at a time when scientists and world leaders agree rapid de-carbonization is needed.

New polling released by Abacus Data in September indicates a majority of Canadians (59 per cent) are growing “more worried about climate change and it is changing my view of how long we should use oil.” That includes 48 per cent of Albertans and 35 per cent of Conservative voters.

“Energy, pipeline and climate issues have been among the most highly charged political debates in Canada for several years,” said Abacus chairman Bruce Anderson.

“What we are seeing in our numbers now is an evolution of opinion: concerns about climate change have deepened, and belief that the world is going to transition away from oil has grown.”

Three pipelines are still in the running: the Trans Mountain pipeline to the B.C. coast, the Keystone XL pipeline to the Gulf coast and Enbridge’s Line 3 export line to the U.S. All of these pipelines have received regulatory approval in Canada — but hurdles still remain.

Alberta Premier Rachel Notley said Thursday that now  Energy East is dead, there is an even greater urgency in completing the Trans Mountain project to B.C. to diversify the industry's export markets beyond the United States.

The B.C. government doesn’t share her view, however, and is currently part of a court challenge against Trans Mountain being heard this week.

The Canadian Energy Pipeline Association and others blamed TransCanada’s decision on Ottawa’s “unclear decision-making process.”

However, New Brunswick Premier Brian Gallant told the Globe and Mail he received assurances from Ottawa that the greenhouse gas assessment didn’t represent an insurmountable hurdle for TransCanada.

"Given the positive signals the federal government has sent to TransCanada over the last weeks . . . we believe it is clear that TransCanada is not proceeding with its application for the Energy East pipeline because recent changes to world market conditions and the price of oil have negatively impacted the viability of the project," Gallant said.

TransCanada had hit regulatory hurdles even before the greenhouse gas assessment was announced. In the summer of 2016, the National Energy Board’s review of Energy East was compromised after it was revealed by the National Observer that former Quebec Premier Jean Charest met the chairman and two commissioners on the National Energy Board while working for TransCanada.

The National Energy Board ended up suspending the hearings into the proposed 4,500-kilometre pipeline and selecting a new panel.

TransCanada is expected to take an estimated $1-billion charge on its pre-tax fourth-quarter earnings due to Thursday’s announcement.

Photo: shannonpatrick17 via Flickr

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On January 9, the National Energy Board (NEB) finally announced the new panel members that will review TransCanada’s proposed Energy East pipeline, replacing the trio that recused themselves in September 2016 after revelations that panel members had secretly met with a TransCanada consultant.

But within hours of news breaking about the new panel members, a notice of motion was filed by the environmental law firm Ecojustice on behalf of Transition Initiative Kenora, calling for the complete cancellation of the entire Energy East review based on an unresolved “reasonable apprehension of bias.”

“The original panel presided over the review for years,” says Charles Hatt, one of the two Ecojustice lawyers representing Transition Initiative Kenora, in an interview with DeSmog Canada.

“All of those important decisions that they made along the way occurred after the conduct that gave rise to the reasonable apprehension of bias, after those meetings with the interested stakeholders.”

Hatt says it is clear the entire proceeding had been tainted by the reasonable apprehension of bias.

“There’d be no way for this new panel to look back and try to determine which of those many decisions were tainted and which were not.”

For Hatt and representatives from Transition Initiative Kenora, it simply isn’t enough for the former panel members to recuse themselves. The original panel’s work is tainted by a the apprehension of bias which Hatt describes as “the idea that there’s been some conduct that in the eyes of a ‘reasonable person’ gives rise to the perception of bias.”

These lingering concerns have led the petitioners to request the National Energy Board void the entire proceedings, leaving TransCanada with the option of starting from scratch.

‘Tainted’ Panel Made Dozens of Preliminary Rulings and Requests

The original Energy East review panel was announced in December 2014.

Only the following month, the two review panel members and NEB chair/CEO Peter Watson met privately with former Quebec premier Jean Charest, who was then working as a consultant for TransCanada.

While the NEB denied it at first, the meeting did in fact include specific discussions about Energy East including suggestions of “using the ‘Lac Megantic example’ to show that pipelines are safer than rail.”

Other private meetings took place that Watson and the panel members didn’t publicly disclose.

At least a year-and-a-half of preliminary work was completed by the panel prior to the beginning of the formal review in June 2016. This work was completed without any acknowledgment that members of the review panel had secretly communicated with the project proponent.

The new notice of motion by Transition Initiative Kenora, submitted to the NEB on Jan. 10, reports that the previous panel decided “dozens of procedural and substantive matters that have shaped the Board’s review of Energy East,” including 27 rulings, six procedural directions and nine information requests to TransCanada.

It notes the original panel also determined when TransCanada’s project application was complete and decided who could or could not participate as intervenors in the National Energy Board’s review of Energy East.

“It’s a continuation of work that we had started earlier,” says Teika Newton, executive director of Transition Initiative Kenora.

“We filed the notice of motion back in August that resulted in the original review panel recusing themselves in September. This is a natural progression on that.”

NEB Has to Respond to Notice of Motion or Refer It to Federal Court

Newton’s organization has specific concerns about the proposed construction of Energy East, especially the impacts of a potential oil spill on water sources, wetlands and marshes.

But she emphasizes the notice of motion is something that should concern any participating group given the need to ensure a fair regulatory process and review: “I don’t think we’re any different or have any unique concerns just because of who we are or where we are.”

“I think it’s an issue that applies universally to all participants,” she says.

Transition Initiative Kenora must now wait for the new panel to formally issue a response to the motion.

Hatt says the NEB will have to hear from all interested parties, which will include TransCanada and many intervenors. It could take weeks or longer to hear from all parties, after which the panel will have to make a decision.

The National Energy Board can refer the matter to the Federal Court of Appeal or could refuse to grant relief.

Hatt says “if and when that happens we will advise our client about challenging that decision in court.”

He adds that the motion provides the federal government with the opportunity to restart the process under a renewed National Energy Board Act and Canadian Environmental Assessment Act, both of which are currently under federal review.

Strengthened environmental laws could result in “a totally different type of review of these important pipeline projects,” Hatt says.

“They’ve put bandaids on the existing legislation but it’s still the legislation that was reformed by the previous government.”

It was also announced on Jan. 9 that Ginoogaming and Aroland First Nations had filed a lawsuit and injunction against TransCanada to ensure proper consultation for pipeline maintenance and prevent “integrity digs” that some fear are actually preliminary work connected to Energy East.

Environmental Defence has also called for the NEB to “pull the plug on the Energy East review and restart it only when an overhauled review process with a credible climate test is in place.”

Newton says her group is “content to just see what happens next in this ongoing saga.”

Image: Environmental Defence poster outlining risks of TransCanada's Energy East pipeline. Photo: Environmental Defence via Flickr (CC BY-NC 2.0)

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At a speech given to the Calgary Chamber of Commerce, Canada's Prime Minister Justin Trudeau said he intends to work with President-elect Donald Trump to approve the northern leg of TransCanada's Keystone XL pipeline. 

The speech comes as Trump revealed in a recent interview with Fox News that one of the first things he intends to do in office is grant permits for both Keystone XL and the perhaps equally controversial Dakota Access pipeline. Because Keystone XL North crosses the U.S.-Canada border, current processes require it to obtain a presidential permit from the U.S. Department of State, which the Obama administration has denied.

The next State Department, however, could be led by the recently retired CEO of ExxonMobil, Rex Tillerson, who was just nominated to be U.S. Secretary of State and soon will face a Senate hearing and vote. Potentially complicating this situation is the fact that Exxon holds substantial interest in both tar sands projects and companies, which stand to benefit from the Keystone XL pipeline bringing this carbon-intensive crude oil across the border.

Exxon, along with its subsidiary Imperial Oil, owns both the Kearl Oil Sands Project and Cold Lake tar sands production facilities, and a 25 percent stake in the tar sands production company Syncrude.

According to Bloomberg, Trump's team has shown interest in getting rid of the Executive Order which created the presidential permit process altogether, which President Barack Obama and Secretary of State John Kerry used in November 2015 to axe the pipeline. 

On the campaign trail and during his post-election "Victory Tour," Trump has pledged to rescind all of Obama's Executive Orders. Unsurprisingly, Tillerson has stated his support for Keystone XL, as well.

As reported in a recent investigation by InsideClimate News, nearly a third of Exxon's global reserves is situated in Alberta's tar sands, an oil patch which covers about 55,000 square miles, or roughly the size of New York state. Alberta's tar sands represent the third largest oil reserves on the planet.

Image Credit: InsideClimate News

Processing and producing tar sands crude emits roughly 17 percent more carbon into the atmosphere than conventional crude oil, according to State Department figures cited by InsideClimate News. Exxon's website says that by 2040 the company will provide a quarter of the oil for the Americas via the tar sands.

It remains unclear what Tillerson will do pertaining to the 1.7 million shares of Exxon stock which will be deferred to him — "unvested," in corporate lingo — over the next decade or so. Some industry experts have called for him to either receive his stock payments immediately or divest completely in order to avoid the associated conflict of interest as Secretary of State.

"Keystone XL Clone"

Keystone XL North links Alberta's massive tar sands reserves to the oil hub mecca of Cushing, Oklahoma. From there, it connects with the southern leg of Keystone XL — now known as the Gulf Coast Pipeline — which carries the diluted bitumen (or "dilbit," the result of tar sands oil being mixed with lighter petroleum products to allow it to flow more easily) to Gulf coast refinery markets. 

Trudeau also recently gave a permit to the oil company Enbridge for its Line 3 Pipeline, which likewise crosses the U.S.-Canada border. That line to the Great Lakes connects to what DeSmog has called the broader "Keystone XL Clone" pipeline system, which like the Keystone Pipeline System, links Alberta's tar sands to Gulf Coast refinery markets. 

The southernmost piece of this Keystone XL Clone system, the Seaway Pipeline, which runs from Cushing to Gulf Coast refineries, had a spill in late October.

"Bring It On"

Even with the deck now stacked against those who have spent years fighting against Keystone XL, at least one environmental group responded with a simple message: "Bring it on."

"Keystone XL would imperil countless communities as well as our climate, and President Obama was absolutely right in finally rejecting it last year," Oil Change International's David Turnbull told the publication Common Dreams. "The movement to stop Keystone is one of the most inspiring and powerful collections of landowners, ranchers, Native Americans, and concerned citizens all across the county that we've ever seen. If Trump tries [to] undo President Obama's wise decision, this movement won't be standing idly by. In other words: Bring it on."

Photo Credit: Wikimedia Commons

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The National Energy Board is fundamentally broken.

That was a point repeatedly highlighted by Prime Minister Justin Trudeau during the 2015 federal election — and one confirmed for many with recent revelations that former Quebec premier Jean Charest had privately met with senior NEB officials while on the payroll of TransCanada.

Trudeau and his federal cabinet have the chance to change that: in June, the government announced dual review panels to assess the mandates and operations of the NEB and the country’s oft-criticized post-2012 environmental assessment processes (it also announced five interim principles until those reviews are completed, including a requirement to assess upstream greenhouse gas emissions although it’s unclear how that information is being used).

But for those to serve as anything more than symbolic gestures of goodwill, the pause button must be hit on the reviews of Kinder Morgan’s Trans Mountain and TransCanada’s Energy East pipeline proposals.

Those review processes need to be completely redone once recommendations from the two review panels have been implemented.

If it sounds demanding, that’s probably because it is. But that’s the price of real change.

‘To Govern is to Choose’

If built, the Trans Mountain pipeline and Energy East pipeline would add a combined 1.79 million barrels per day of export capacity from the Alberta oilsands (690,000 and 1.1 million barrels/day, respectively).

Let’s put that in context.

The Canadian Association of Petroleum Producers has projected that heavy oil production will increase 1.45 million barrels per day by 2030, to a total of 3.99 million barrels per day. In other words, the two massive projects currently under review would lock in more than enough export capacity for the oilsands to maximize its growth to 2030.

If paired with the construction of a single LNG export facility in British Columbia, this situation would require the rest of the Canadian economy to contract by 47 per cent from 2014 levels by 2030 in order to meet the country’s Paris Agreement targets (an impossibility “barring an economic collapse” according to David Hughes, who calculated those numbers in a Canadian Centre for Policy Alternatives report).

In other words, approving the two projects would completely botch the country’s chances of meeting international climate commitments.

“When you’re in opposition, you can be strongly committed to contradictory things,” says Keith Stewart, climate and energy campaigner for Greenpeace Canada.

“But to govern is to choose. And the Liberals have been very clear they want to meet our international climate commitments, implement the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and get a pipeline built. The problem is you can have, at most, two of those.”

Why @JustinTrudeau Should Call Off the Reviews of Trans Mountain and Energy East https://t.co/TslT4Z5IbV #bcpoli #cdnpoli

— DeSmog Canada (@DeSmogCanada) August 24, 2016

Opportunity for Canada to Enact ‘Visionary Environmental Laws’

The review of the process has great potential, especially given the impacts of the gutting of environmental assessments in 2012 under former prime minister Stephen Harper.

Anna Johnston, staff counsel at West Coast Environmental Law Centre, describes the review as a “once-in-a-generation opportunity for Canada to enact really visionary new environmental laws and processes.”

Johnston says a key component is to hold projects to a higher standard — requiring companies to prove net benefits as opposed to not simply posing a “significant adverse impact” — as well as measuring total cumulative impacts. Such an approach would result in a threshold of potential greenhouse emissions, meaning some projects simply wouldn’t be considered due to impacts on meeting climate targets.

“Those are just going to a red light and won’t even need to go through an environmental assessment process as we know this huge project is going to take up way more of its fair share of greenhouse gas emission allocations,” she says.

The panel members for reviewing environmental assessment processes were announced on August 15: it will be chaired by Johanne Gélinas of consulting firm Raymond Chabot Grant Thornton, Renee Pelletier of the Aboriginal law firm Olthuis, Kleer, Townshend LLP, Rod Northey of law firm Gowling WLG and Doug Horswill, senior vice president of Teck Resources and “honorary life director” of the Mining Association of Canada. (Interestingly, Bob Rae is a senior partner at Olthuis, Kleer, Townshend and Rod Notley has donated $17,000 to the Liberals since 2004).

Erin Flanagan, director of federal policy at the Pembina Institute, says the panel has “a solid balance of perspectives and experience on the file.”

The panel members for the NEB review haven’t been announced yet. The executive summaries of the final reports will be published on January 31, 2017; Flanagan emphasizes “the clock is ticking – it’s a huge mandate to execute on by early 2017.”

There’s plenty of ground to cover.

Trans Mountain, Energy East Remain Exempt

But even if the review panels produce progressive recommendations — for instance, calling for the revamping the Canadian Environmental Assessment Act, returning the responsibility for federal environmental assessments of interprovincial and international pipelines to the Canadian Environmental Assessment Agency and treating Indigenous nations as much more than an afterthought — they wouldn’t apply to the two biggest pipeline projects in recent Canadian history.

The federal cabinet will be making a decision on the Trans Mountain pipeline before Christmas, a full month before the review panels deliver their recommendations (the NEB approved the project in May with 157 conditions). This occurs in contradiction to a promise Trudeau made during the election that the NEB review would apply to the project.

The government’s ad-hoc supplementary review panel, intended to improve public consultations, has come under serious fire for conflict-of-interest allegations and failures to offer translation services or livestreaming, in many ways pointing out the massive flaws of the existing process.

Those meetings have, by and large, been an opportunity for communities to voice their majority opposition to Trans Mountain and the review process. In the case of Vancouver and Victoria, the overwhelming number of public participants voiced opposition to the pipeline project.

The NEB’s review process for Energy East is already underway via panel sessions in communities. The bulk of the work won’t start until 2017.

But if the federal government is serious about addressing concerns about the NEB, why not hold off on the panel sessions until community members are fully aware of the stakes? Currently, intervenors are operating under the expectation that the NEB will be responsible for conducting the environmental assessment of Energy East, a reality that could very well change if the dual review panels recommend serious alterations to processes.

Canadians Still Without Restored Environmental Laws

In February, Ecojustice argued in regards to the TransCanada project that “the government missed a golden opportunity to put the entire process on hold until legislative amendments could effectively repair the damage done by the Harper government’s rollbacks.”

Green Party leader Elizabeth May has also voiced concern, stating in June 20 press release that “I vigorously opposed the idea of a drawn-out consultation without first repealing the devastating changes made to environmental assessment in omnibus budget bills of 2012” and “the government is choosing to continue with a broken system while it consults stakeholders.”

The future changes may be hugely beneficial, barring carbon-intensive LNG facilities, oilsands upgraders and other industrial emitters from ever entering the review process. But the Trans Mountain pipeline and Energy East could very well be on the path to construction and export, further jeopardizing Canada’s environmental reputation.

Government Hanging onto ‘Deeply Flawed’ Process

The Liberals have already established an unfortunate track record of blaming the previous government for politically unsavoury decisions they could have very well stopped: think the controversial sale of light-armoured vehicles to Saudi Arabia, the government’s decision to withdraw an appeal to force the Catholic Church to pay reparations for its significant role in running residential schools or the approval of permits for construction on the controversial Site C dam in B.C.

It’s a bit of a sunk costs fallacy, but one shaded by an obvious desire to keep the real political mechanisms and motives under wraps.

The same appears to be occurring with the two major pipeline approvals. The government made the powerful and convincing argument during the election that the review process was broken. Yet it has allowed the NEB to continue reviewing Trans Mountain and Energy East.

“You had Trudeau say that this process isn’t credible,” Stewart says.

“So what are you actually going to do about that? How can you approve a major controversial project based on a process that you’ve already said is deeply flawed and is proved once again that it’s deeply flawed? I just don’t understand how they think they can move that forward.”

Image: Prime Minister Justin Trudeau and B.C. Premier Christy Clark meet in Burnaby, B.C., site of the Kinder Morgan Trans Mountain export terminal. Photo: Prime Minister's Photo Gallery

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The US government agency responsible for interstate pipelines recorded a catalog of problems with the construction of TransCanada’s Keystone Pipeline and the Cushing Extension, a DeSmog investigation has found.   Inspectors at the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) observed TransCanada’s contractors violating construction design codes established to ensure a pipeline’s safety, according to inspection reports released to DeSmog under the Freedom of Information Act (FOIA).   Evan Vokes, former TransCanada materials engineer-turned-whistleblower, told DeSmog the problems uncovered in the reports show issues that could lead to future pipeline failures and might also explain some of the failures the pipeline had already suffered.   Vokes claimed PHMSA was negligent in failing to use its powers to shut down construction of the pipeline when inspectors found contractors doing work incorrectly. “You cannot have a safe pipeline without code compliance,” Vokes said.

The Keystone and the Cushing Extension are part of TransCanada’s Keystone Pipeline network, giving the company a path to move diluted Canadian tar sands, also known as dilbit, to the U.S. Gulf Coast.    The Keystone pipeline network is made up of the Keystone Pipeline (Phase I), that runs from Hardistry, Alberta, to Steele City, Nebraska, and the Keystone-Cushing extension (Phase ll), from Steele City to Cushing, Oklahoma. There, it connects to the southern route of the Keystone XL, renamed the Gulf Coast Extension (Phase III), that runs from Cushing, Oklahoma to the Gulf Coast in Texas.    The final phase of TransCanada’s network, the Keystone XL, (Phase lV), originating in Alberta, is meant to connect to the Gulf Coast pipeline. But KXL is blocked for now since President Obama rejected a permit TransCanada needs to finish its network.   According to the inspection reports PHMSA provided, its inspectors observed TransCanada violating construction design codes established to assure a pipeline’s safety. Inspectors wrote that some contractors working on the Keystone were not familiar with the construction specifications.   The reports show that when PHMSA inspectors found improper work, they explained the correct procedures — such as telling welders the correct temperature and speed they needed to weld at according to specifications.   In one instance, a PHMSA inspector found a coating inspector using an improperly calibrated tool, so the PHMSA representative instructed him on the proper setting.   The inspection reports also describe regulators identifying visible problems with pipe sections as they were placed in ditches, and of ditches not properly prepared to receive the pipe.

Caption: PHMSA Inspection report of the Keystone Pipeline 6/15/2009 to 6/19/2009   “Regulators did nothing to stop TransCanada from building a pipeline that was bound to fail,” Vokes told DeSmog after reviewing the construction inspection reports for the Keystone 1 pipeline and the Cushing Extension.   According to Vokes, those welders and inspectors should have been fired because problems with welds and coatings can lead to slow and hard to detect leaks.   “It is impossible to believe the welders and inspectors cited in the PHMSA reports were operator qualified, which is a mandated requirement by PHMSA,” Vokes said.   TransCanada insists it used qualified contractors.   Matthew John, a communications specialist for TransCanada, told DeSmog: “In fact, the Special Permit conditions for Keystone Phase 1 and the Cushing Extension included a requirement for TransCanada to implement a Construction ‘Operator Qualification’ program. We only use highly trained and specially certified contractors in the construction of the Keystone System.”   But the PHMSA inspection reports cast doubt on the effectiveness of the ‘Operator Qualification’ program.   Vokes said: “How is it possible that PHMSA could find multiple violations at multiple sites on multiple days in multiple years?”    “It isn’t a regulator’s job to instruct contractors how to comply to code,” Vokes said.   “If the construction crew was not familiar with the correct procedures, they shouldn’t have been allowed to continue constructing the pipeline.”   Part of Vokes’s job as a pipeline materials engineer was to ensure TransCanada adhered to the accepted codes of pipeline construction set by institutions such as the American Society of Mechanical Engineers.   “Straying from the adopted code is not only illegal, but it compromises the integrity of a pipeline,” he said.   Vokes says that during his five years with the company he did his best to get TransCanada to identify and solve its problems. But he said the company continued to emphasize cost and speed rather than compliance.   This compelled Vokes to send damning evidence of code violations to the Association of Professional Engineers and Geoscientists of Alberta, the Canadian National Energy Board, and PHMSA.   He was fired after airing TransCanada’s failures, which did not surprise him. He is, however, surprised regulators in the U.S. and Canada continue to let TransCanada and other companies build pipelines that are not built to safety standards.   Vokes told DeSmog he had sent senior PHMSA investigator Gery Bauman a “binder full of information” showing issues with TransCanada's construction methods. “Bauman seemed concerned and told me that he would look into my allegations, but blew me off.” According to Vokes, Bauman stopped responding to his emails.   PHMSA confirmed it received documents Vokes sent to Bauman and reviewed them. Bauman and other communication specialists at PHMSA were asked by DeSmog to comment on the communications with Vokes, but have not responded.   According to Vokes, the documents he gave Bauman contained proof that TransCanada didn’t follow minimum safety standards when building the Luddem pumping station — the same pump station that spilled about 400 gallons of oil in North Dakota in 2011.   Bauman witnessed some of the construction problems firsthand. An inspection report on the construction of the Keystone Pipeline bearing his name, dated 06/15/2009 to 06/19/2009, states:

“G. Bauman and M. Kieba conducted an inspection of Spread 3B out of Aberdeen, SD. The issues and concerns noted by Gery ranged from coating anomalies not being repaired to bolts causing coating damage. Additionally, a joint of pipe was found with a three-inch section where the wall of the pipe was measured to be 0.356”. Gery also inquired about the CP [cathodic protection] of the line that had been in the ground for almost a year, and line markers to help prevent any possible third party damage.” 

  Vokes believes the problems Bauman described could lead to a spill. He explained regulators should have required an integrity test to determine if a sleeve (protective layer) was required, but the report makes no mention whether such a test was ordered.   DeSmog asked Bauman and the PHMSA if the issues Bauman reported on Spread 3B could lead to a spill and an integrity test or any other kind of follow-up work was ordered, but did not receive a reply.   Bauman warned Kinder Morgan, another pipeline industry giant, on similar “inappropriate” construction practices when he inspected REX, a natural gas pipeline that runs from Colorado to Pennsylvania completed in 2009. PHMSA accepted assurances form Kinder Morgan that remedial actions would be taken. But whatever actions Kinder Morgan took, they did not prevent a gas leak causing evacuation of nearby homes in southeastern Ohio or a slew of other incidents.   After reviewing the construction inspection reports obtained by DeSmog on the Keystone and the Cushing Extension, Vokes said that regulators cite numerous problems grave enough that, in his opinion, PHMSA should have shut the project down. He said PHMSA’s apparent acceptance that operators would change their ways showed the agency learned nothing from REX. 

Another PHMSA inspection report, dated June 2009, indicates TransCanada ignored basic protocols by working on the Keystone pipeline without written specifications. “That gave PHMSA grounds to shut the work down on the spot,” Vokes said.

Caption: PHMSA Inspection Report 7/06/2009 to 7/10/2009 Indicating Multiple Regulation Violations by a third party auditor   “The PHMSA inspection report dated 10/05/2009 to 10/09/2009 foretells the kind of leak that led to the spill from a section of Keystone Pipeline in South Dakota,” Vokes said. The spill, discovered on 2 April, leaked an estimated 16,800 gallons of dilbit because of a faulty transition weld.    The report states: “There has been a problem with cracked welds on this spread, which is well known to the personnel involved. The problem got worse with twenty cracks the last seven working days. The mainline welded out on Wednesday, October 7, 2009.”   The PHMSA inspection report dated 08/24/2009 to 08/28/2009 calls out a coating inspector for using an unauthorized tool, stating: “The procedures call for a utility knife of a specific size to be used for performing the coating V notch adhesion test. The coating inspector used a lock blade knife for the inspection.”   “Why not just use a pocket knife or prison shank while the coating inspector is at it?” Vokes joked.   Though PHMSA chose not to fine TransCanada for any code violations during construction of the Keystone and Cushing Extension phases after the Keystone Pipeline became operational, PHMSA fined the company twice for construction violations following incidents that required the Keystone pipeline to be shut down for repair.   This included the spill at the Luddem pump station in 2011 and an extreme corrosion event that was detected in multiple spots in 2012 as well as other probable violations.     Most recently, following the South Dakota spill, PHMSA issued a Corrective Order Notice to TransCanada.   “These actions don’t change the fact that any pipeline not built to code is an accident waiting to happen,” Vokes said.

For regulators to allow companies like TransCanada to break the rules seems criminal to him. “It goes against the code of ethics licensed engineers take that require them to put the safety of people and the environment first,” he said.   Inside Climate News reported that Jeffrey Wiese, a top PHMSA administrator, informed a group of industry insiders that PHMSA has "very few tools to work with" in enforcing safety rules.   But PHMSA does have the power to shut a job site down, to fine operators and require additional integrity tests if regulators have reason to doubt a pipeline’s safety.   A PHMSA public affairs specialist told DeSmog: “PHMSA can refer any discovery of possible criminal activity to either the Department’s Office of the Inspector General or the Department of Justice for further investigation and action. Those agencies may initiate criminal investigations and prosecution as a result of, or separate from a PHMSA referral.”   DeSmog asked PHMSA why inspectors did not shut down construction work or fine TransCanada for breaking rules on the Keystone Pipeline and Cushing Extension projects. PHMSA has not responded.   Despite problems with the Keystone Pipeline prior to the 2 April spill, TransCanada’s CEO Russ Girling boasted about the Keystone Pipeline network’s safety last year on the occasion of the company transporting its billionth barrel of Canadian and U.S. crude oil from Canada to the Gulf Coast.   TransCanada spokesperson John said: “Any deficiencies in code compliance identified during the construction of the pipeline were addressed prior to it being put into service. The Keystone System is safe and TransCanada has one of the best operating records in the entire industry.”   But Vokes asked about the violations that inspectors didn’t catch. “If a pipeline is not built to code,” Vokes insists, “it’s not if the pipeline will spill, it is when.”   DeSmog asked PHMSA for final evaluation reports on the Keystone Pipeline and the Cushing Extension after reviewing a Final Evaluation Report for the Gulf Coast Pipeline obtained through a FOIA request.   But PHMSA claims no such reports were conducted for the other two pipelines. Background information provided to DeSmog by the agency indicates that different regions do different kinds of paperwork, which might explain why no final evaluation reports exist for these pipelines.   PHMSA did not quantify what percentage of the inspection reports conducted on the two pipelines it provided to DeSmog.   “It is hard to believe some kind of final inspection report was not done for those pipelines. The Keystone Pipeline was the largest pipeline project in the United States at that time,” Vokes said.   The agency’s website states: “PHMSA inspects pipeline construction to assure compliance with these requirements. Inspectors review operator-prepared construction procedures to verify that they conform to regulatory requirements. Inspectors then observe construction activities in the field to assure that they are conducted in accordance with the procedures.”    The newly released PHMSA inspection reports, minus a final evaluation report, raise further questions about the integrity of the Keystone Pipeline and the Cushing Extension.   Main Photo Credit: TransCanada's pipe yard near Gascoyne, North Dakota. © 2013 Cindy Meyers  

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TransCanada received permission from federal regulators to re-start the Keystone Pipeline a week after a 16,800-gallon spill in South Dakota. The pipeline started back up on Sunday morning at a reduced operating pressure.   The incident has given ammunition to a group appealing the decision by the South Dakota Public Utility Commission (PUC) to re-certify TransCanada’s permit to build the Keystone XL Pipeline, despite President Obama’s denial of a permit needed to cross international borders.    The PUC reasoned that the next president could decide to issue the permit — a reminder that TransCanada has not given up on building the northern route of the Keystone XL. However, this most recent spill renews questions about the company’s ability to build safe pipelines.   When Evan Vokes, a former TransCanada materials engineer-turned-whistleblower, heard about a small spill along the Keystone Pipeline, he guessed that the leak would be found at a transition weld near where the pipeline crossed under a road. Transition welds connect thinner-walled pipe to thicker-walled pipe.

Places where the pipeline goes under road crossings require thicker pipe than the rest of the line, so wherever the Keystone goes under a road you will find transition welds, Vokes explained.    It turns out that Vokes’s prediction was right. In a corrective action order notice issued to TransCanada on Saturday, the Pipeline and Hazardous Materials Safety Administration (PHMSA), the agency that regulates interstate pipelines, indicated the probable cause of the leak was from a girth weld anomaly at a transition site. 

Vokes warned his former employer and PHMSA about the transition welds, which he described as “inherently risky.” Welding different thicknesses of pipe together is harder to do than welding the same thickness, and it is more difficult to get accurate X-rays of welds.   “Even a seasoned welding inspector could miss imperfect welds when reviewing X-rays used to check the welds during the pipeline’s construction,“ Vokes told DeSmog. “And any less than perfect weld is more prone to crack when the pipeline moves, which happens when weather conditions change.”   Vokes felt so strongly about the risk of leaky transition welds that he sent an email to TransCanada’s CEO Russ Girling, warning that the transition weldsused on the Keystone Pipeline were a bad idea.   He pointed out to Girling that TransCanada was ignoring an advisory PHMSA issued in 2003 that warned against the use of such welds because they are prone to crack under stress.   He also emailed Kenneth Lee, a top PHMSA engineer who ran a workshop on “Pipeline Construction Challenges” in 2010, to inform Lee of his concerns.    Diagram of an improper weld transition part of a PHMSA presentation.   Lee responded by email: “We are in full support of efforts and technologies to improve pipeline safety, including many of those you have mentioned. The increased incidents of girth weld cracks are of great concern to us and we treat this very seriously.”    But Vokes believes his warning to Lee was ignored because no corrective actions were taken against TransCanada during the pipeline installation to stop the transition welds.   ”Bad welds can result in a catastrophe, “Vokes explained to DeSmog. “A tiny crack in a weld can leak for years before it is found, because leak detection systems are only capable of detecting leaks when a pipeline’s volume drops by two percent in the course of a day.”   TransCanada’s detection system didn’t pick up the leak near Freemont, South Dakota, allowing the pipeline to spill at least 168,000 gallons of dilbit (refined Canadian tar sands oil) before a landowner noticed the spill.   It is impossible to say how long the pipeline was leaking, or how long it could have gone on leaking, had the spill taken place in a more remote area.    “There could be hundreds of cracks in welds along the Keystone Pipeline and TransCanada’s leak detection system wouldn’t locate them,” Vokes said. "The Enbridge Pipeline spill in Kalamazoo, Michigan, leaked twice as much dilbit before anyone noticed.”   The mounting failures of various TransCanada pipelines does not surprise Vokes because “the company often did not follow the code of construction.”    But he is surprised and dismayed that, when pipeline safety is at stake, regulators in Canada and the United States allow companies to continue to break the rules with few to no consequences.    Two other TransCanada projects that failed not long after they started operating are the Bison Pipeline in Wyoming, and the North Central Corridor Loop in Alberta, Canada, validating Vokes’s claims.   Vokes was fired by TransCanada before most of the changes he advocated took place. PHMSA did issue a corrective warning to the company related to the construction of the Keystone Pipeline, but it was for issues that did not include the transition welds.    Vokes believes that pipelines would be safe if the rules of construction were followed. But he is aware that the rules were broken repeatedly here.   While reviewing photos that Cindy Myers, a member of the Dakota Rural Action group, took near the spill site, Vokes noticed a person on the pipeline right-of-way carrying a firearm. “Firearms are not permitted on a pipeline’s right-of-way,“ Vokes said. “This shows that the company and the regulators are not taking pipeline safety seriously. To ignore safety rules even when the public is present shows a total disregard of public safety." 

Man with reflective safety vest carrying a gun at the site of the Keystone spill in South Dakota 4/4/2016. Photo courtesy of Cindy Myers   Gary Dorr, a member of the Nez Perce Tribe, told DeSmog that TransCanada also ignores laws that say Indigenous peoples must be consulted before pipelines cross a tribe’s land. He is one of the legal challengers that includes members of the Dakota Rural Action, the South Dakota Keystone Consolidated Interveners, and several individual landowners who are challenging the South Dakota PUC’s decision to re-certify TransCanada’s permit. “The Keystone XL, if built, will cross tribal land without permission given to TransCanada by the tribes,” Dorr said.   The challengers filed an appeal against the PUC’s decision that is pending. ABC-TV affiliate KSFY in Sioux Falls, South Dakota, reported that the “circuit court judge in Pierre is expected to issue an order on consolidating the lawsuits against the PUC into one appeal next week.”   Dorr hopes this spill will make a difference in the court’s decision. “We were promised TransCanada’s pipeline won’t spill,” he told DeSmog, “and that is a promise that the company cannot keep.”   The PHMSA corrective order calls for more oversight on the Keystone Pipeline.   But Vokes told DeSmog, “The only way to find out if there are other slow leaks would be to dig up the pipeline everywhere a transition weld was made. There easily could be hundreds of undetected leaks in that pipeline.”

  Photo credit: Keystone Pipeline spill site in South Dakota, courtesy of Bold Nebraska.

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TransCanada’s claim that the southern route of the Keystone XL Pipeline is the safest pipeline ever built in the United States is challenged by the release of new documentation confirming multiple code violations.   Daily inspection reports on the construction of the pipeline obtained by the Tar Sands Blockade, an activist group, renew questions about the pipeline’s integrity. Mounting evidence that the pipeline was not built to mandated minimum requirements established by the American Petroleum Institute increases the chances the pipeline will leak or experience a catastrophic spill.    The reports — prepared by federal regulators with the Pipeline and Hazardous Materials Safety Administration (PHMSA) — reveal some code violations not previously disclosed. The number of reports also account for less than half the number of days the agency claims it spent inspecting the pipeline while it was being constructed.   Last year President Obama denied TransCanada a permit to build the northern route of the Keystone XL pipeline across the U.S.-Canada border.But his administration had fast-tracked the construction of the southern leg of the project in 2012.   The Keystone XL's southern route, renamed the Keystone Gulf Coast Pipeline when the project was split into sections, goes from Cushing, Oklahoma to the Gulf Coast. In Cushing, the pipeline connects to TransCanada’s pipeline network that originates in Alberta, Canada.   After mandatory safety tests revealed potential problems with the integrity of the southern pipeline, TransCanada dug up 130 sites and made repairs before the pipeline was permitted to start up.   PHMSA noted in its final inspection report that 37 sections of pipe had to be cut out and replaced and many areas of the pipeline’s coating had to be repaired.   The Tar Sands Blockade, Public Citizen, and landowners living along the pipelines path monitored the repair work. They were joined by Evan Vokes, former TransCanada materials engineer-turned-whistleblower, who shared his technical expertise.   They requested PHMSA require TransCanada do a new pressure test on the pipeline to test the integrity of the repairs. But PHMSA turned them down at a private meeting held shortly before TransCanada started up the pipeline.    PHSMA explained that it had faith the repairs were done correctly and assured the group that its inspectors spent over 150 days inspecting the pipeline during construction — overseeing welding, coating, installation, backfilling, testing and all other construction activities.   That claim prompted Kathy Redman, a member of the Tar Sands Blockade, to file a request under the Freedom of Information Act (FOIA) for the daily inspection reports. In total 66 reports were released covering 70 days.   Of those reports, two recount a PHMSA inspector aborting his mission after being warned that protesters would be at the site he planned to inspect. Another recounts an inspector sitting in on a safety training session with contractors and interviewing personnel.   “Inspecting pipeline construction is a boots on the ground activity,” Vokes told DeSmog. “Any time not spent on the pipeline right of way cannot be considered time spent inspecting construction.”   Vokes believes it would have been prudent for regulators to spend as much time as possible monitoring the construction of the pipeline. TransCanada has been cited on more than one occasion by regulators in the U.S. and Canada for not complying with construction code.     A couple of the company’s latest projects blew up, not long after they started operating, including the Bison Pipeline in Wyoming and the North Central Corridor Loop in Alberta, Canada.   DeSmog asked PHMSA if it had documentation to prove more than 150 days were devoted to inspections.   “There would not necessarily be 150 reports for 150 days, and we’ve been trying to find another way to explain that,” an email sent to DeSmog by a PHMSA director stated.**   But PHMSA’s final inspection report for the Gulf Coast pipeline states, “Daily reports were submitted by each engineer/inspector to document the daily construction activities observed during the inspections.”  It also says that “A total of 165.9 AFO [away from the office] days and 53.35 non-AFO days were spent on the TransCanada construction project.”

“The discrepancy in the number of days the agency claims it spent inspecting to the number of daily inspection reports makes me doubt PHMSA’s credibility,” Redman told DeSmog. The reports she did get added to her concern that the pipeline is a disaster waiting to happen.   The reports include inspectors’ observations of TransCanada violating construction codes. A report dated 10/30/2012 describes a welder who had the wrong welding rods in his bucket.   “That is a fundamental fuck-up,” Vokes told DeSmog. “It could explain the high number of welding failures the pipeline suffered.”    A welding inspector is required at all construction sites during pipeline installation. Using the wrong welding rods leads to bad welds, and bad welds can lead to slow leaks.   “The welder and the welding inspector should have been fired on the spot,” Vokes said.    Vokes found it troubling that the inspection report makes no mention of PHMSA’s inspector taking immediate corrective action. He believes stopping construction after discovering the wrong rods in a welder’s bucket would have been an appropriate response.   In another PHMSA inspection report, dated 7/09/2013, TransCanada’s pipeline coating problems are noted.  At a dig site where the company was assessing issues detected by a safety test, the inspector found damage done to the coating caused by a shovel.   Previously released warning letters PHMSA sent to TransCanada reprimand the company for hiring unqualified welders and not protecting the pipeline’s coating during installation. And PHMSA’s final inspection report reveals TransCanada received unsatisfactory marks on welding procedures and installation practices related to the pipeline’s protective coating.   PHMSA did not fine TransCanada for any of the violations it cited in warning letters or require a second pressure test after TransCanada repaired the pipeline, although it has the regulatory power to do so.

A repaired pipeline segment on the Keystone Gulf Coast Pipeline. Source: PHMSA FOIA 2016-0041_000077   ”You can’t expect the pipeline to be safe if the basic rules of construction aren’t followed,” Vokes said.  “’Get the bitch in the ditch’ is the best way to describe pipeline construction these days. Speeding up the construction process makes no sense because it is a lot cheaper to do things right in the first place.”   Because pipeline regulators in the U.S. and Canada are not using the full force of their regulatory power, Vokes points out, operators have little reason to change their ways.    Redman is skeptical she was provided all of the documents she requested.  Regardless, the 66 reports she was able to obtain confirm her belief PHSMA didn’t spend an adequate amount of time acting as a watchdog of a company with a questionable safely record.    “Anyone who relies on a safe water supply along the pipelines route should be concerned,” she said.   PHMSA Daily inspection Reports Obtained by the Tar Sands Blockade in 2016   PHMSA Daily inspection Report Obtained by the Tar Sands Blockade in 2014

**Ed note: After publication of this article, a PHMSA public affairs specialist emailed DeSmog this statement: "The daily reports are essentially notes the inspector uses to document their observations over the course of the investigation. Our inspectors use them to complete the final construction report and don’t necessarily keep them once the final report is complete." 

Image credit: Julia Trigg Crawford at a TransCanada construction site across from her farm in Sumner, Texas, on Oct. 14, 2012. She tried to stop TransCanada from taking her land but was unable to prevent the company from using eminent domain. ©2012 Julie Dermansky

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Only three-and-a-half months have passed since the federal election, but fossil fuel companies and lobby groups haven’t wasted any time in ramping up their lobbying efforts.   Suncor, the country’s largest energy company by revenue, has led the pack in meeting with high-ranking federal officials — logging at least 12 meetings in just over one month.   Between Nov. 2 and Nov. 19 the dominant oilsands player met four times with Louise Metivier, who was Canada’s chief negotiator at the UN climate summit held in Paris between Nov. 30 and Dec. 12.   Steve Williams, the company’s CEO and head lobbyist, also met three times with Environment Minister Catherine McKenna (on Nov. 18, Dec. 7 and Dec. 8) another three times with Environment Canada’s chief of staff Marlo Raynolds (on Nov. 5, Dec. 7 and Dec. 9) and twice more with Gerald Butts, Prime Minister Justin Trudeau’s right-hand man and principal secretary ( Nov. 18 and Nov. 19).   “The meetings were preparatory meetings for Suncor’s participation at COP 21 in Paris,” explained Sneh Seetal, spokesperson at Suncor, via e-mail. “Our president and CEO, Steve Williams, attended as a member of the Canadian delegation at the invitation of the federal government. We discussed Suncor’s perspectives on climate change and how industry can help be a part of the solution.”

Lobbyists Include LNG Canada and TransCanada

Other oil and gas interests have displayed similar determination since the Liberals formed government.   Take LNG Canada Development (a Kitimat-based joint venture composed of Shell, PetroChina, Korea Gas and Mitsubishi), which met with Erin O’Gorman, assistant deputy minister of Natural Resources Canada, on Oct. 27, Nov. 5 and Jan. 8.   TransCanada, the proponent of both the Energy East and Keystone XL pipelines, lobbied Canada’s ambassador to the United States, Gary Doer, three times on Oct. 30.

The Canadian Energy Pipeline Association met with NEB chairperson Peter Watson on Nov. 2 and Dec. 17. And the Petroleum Services Association of Canada lobbied McKenna, Finance Minister Bill Morneau and Employment Minister MaryAnn Mihychuk in separate meetings on Dec. 22.

It’s important to keep in mind that the lobby registrations are likely just scraping the surface of the actual lobbying happening in Ottawa.   Richard Girard, executive director of research centre Polaris Institute, notes that only employees who spend more than 20 per cent of their month’s work on lobbying efforts are required to register as a lobbyist. As a result, Girard suggests there are “lots of meetings that are more likely taking place that we don’t know about.”   Even the meetings that are registered lack specifics, only hinting at general subjects such as “environment” or “energy.”   “It certainly provides you with a list of who’s seeing who, which is helpful,” says Gillian Steward, author of the Toronto Star’s 2015 Atkinson Series on public policy on the oilsands. “They do have to at least put down the topic of what they’re talking about. On the other hand, it can be very difficult to get — say, from CAPP — exactly what they’re presenting.”

Bear Head LNG Lobbies Federal Government 15 Times in 10 Weeks

Some companies have clearly been making plenty of moves, with Bear Head LNG — the company proposing to build a liquefied natural gas facility in Nova Scotia — meeting with Doer on Oct. 21, Oct. 26, Oct. 30, Nov. 10, Nov. 11, Dec. 10 and Dec. 18.   Represented by former U.S. ambassador Derek Burney, the company also lobbied the duo of Jay Khosla (assistant deputy minister of Natural Resource Canada’s energy sector) and Terence Hubbard (director general of Natural Resource Canada) four times between Nov. 12 and Dec. 29, with Khosla chatting individually with the company an additional four times in the window.

‘It’s a Question of Balance’

Girard notes that while the Canadian lobbying registry has improved over the years, it’s still flawed because it doesn’t show how much companies are spending on lobbyists, unlike the U.S. But reasonable conclusions can still be made.   “The number of times people register communications increases around certain important pieces of legislation,” says Girard, who served as co-author for the Polaris’ report Big Oil’s Oily Grasp. “Many of those pieces of legislation were very positive for the industry. We can’t draw the line, but yes we can see there’s a correlation between the level of lobbying — who’s lobbying and for what — and the outcome of the legislation.”   The Polaris Institute’s 2012 report found that that 2,733 lobbying communications were made by oil and gas companies between July 2008 and November 2012, far outweighing similar efforts by mining and forestry interests. Prominent lobbying organizations such as the Canadian Association for Petroleum Producers (CAPP), TransCanada, the Canadian Gas Association, Imperial Oil and Suncor led the way. Meanwhile, only 11 environmental non-governmental organizations were registered as lobbyists in that window.   “It’s a question of balance,” Steward says. “[Oil and gas companies] have a right to go and do that. It’s just that they have more resources and more power to actually have those meetings, where environmental and First Nations groups and other kinds of NGOs don’t have the funds or staff, and aren’t represented as well. It’s much harder for them to actually get their message across to the people who influence those decisions.”

Image: Steve Williams takes the helm as Suncor CEO in 2011.  

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