Among the promises produced by Justin Trudeau’s Liberal government to restore “trust” within the National Energy Board, there’s one which former chairman Gaetan Caron really loves: Keep politics from pipeline reviews.
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Justin Trudeau has taken a dysfunctional pipeline regulatory system and made it not simply worse, but a potentially impregnable barrier. Read on
It’s “regrettable” that a lot of politicians have lashed out in the quasi-judicial regulator, without providing backup evidence, and knowing that its 400 employees cannot defend themselves, said Caron, who led the Calgary-based energy regulator until retiring 2 yrs ago, after supervising or ruling on a few of the highest-profile energy projects in NEB history.
“Overall circumstances have made it so that it has become cool to blame the NEB to be all sorts of things – for example being captured by those it regulates, not focused on evidence, and relaxed on safety,” Caron said within an interview this week in the University of Calgary’s downtown campus, where he enjoys working with students as an executive fellow at the School of Public Policy.
“For politicians to criticize a public institution, without the accountability to describe why, and defend themselves in an evidence debate, I find it very unfortunate.”
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But Caron is skeptical that Trudeau’s de-politicization plan will succeed, or that his fixes to “modernize” the board will repair Canada’s pipeline divide.
Instead, he worries that pipelines have grown to be proxies for bigger issues like global warming policy and aboriginal reconciliation that needs to be handled elsewhere, which the proposed reforms will deepen animosity between regions, different levels of government, project proponents and opponents.
Caron mentioned the Green Party and also the federal NDP for going “aggressively negative” on the NEB. However the new Liberal government also did plenty to discredit the institution.
The latest broadside came in Calgary a week ago, when Trudeau said: “The framework and the approach that the previous government took in the last Ten years on pipelines didn’t get anything done. These were not able to build the general public trust, the public confidence to move forward on such projects. And just what we have to do is restore a framework in which Canadians may have rely upon their regulators as well as their governments to both create economic growth to benefit all Canadians but additionally to protect environmental surroundings.”
In fact, Enbridge Inc.’s Northern Gateway pipeline project stalled because of aboriginal opposition, after receiving NEB and cabinet approval. TransCanada Corp.’s Keystone XL project was killed through the U.S. administration. The Mackenzie pipeline wasn’t built because Arctic gas was no longer required after its review took too much time, a cautionary tale that lengthy reviews kill projects.
On the other hand, Enbridge’s Alberta Clipper pipeline and Line 9 reversal, TransCanada’s base Keystone, and Kinder Morgan’s last TransMountain expansion all moved forward.
Trudeau wouldn’t even say whether he’d give Energy East, proposed by TransCanada, the green light whether it receives NEB approval – almost not a vote of confidence within the regulator.
His explanation: “I am not going to pre-judge or shortcut the NEB process as it goes forward. It’s important that we have confidence within our regulators.”
Promised throughout the fall election campaign, the NEB reforms started fourteen days ago. Natural Resources Minister Jim Carr and Environment Minister Catherine McKenna introduced interim measures for pipeline projects already under review – Kinder Morgan’s new TransMountain expansion, which within the final stages of a two year review and due to have an NEB recommendation in May, and East, the next big project to hold public hearings.
Under the brand new regime, there’ll an additional study of the greenhouse gas emissions of gas and oil projects that feed oil into the pipelines, in addition to additional consultations with aboriginal groups and also the public. The extra process will require place following the NEB has completed its very own. An entire overhaul of the NEB and also the environmental regulatory process is anticipated in the future years.
The most immediate impact would be that the federal cabinet will require one more 4 months, or until December, to reach its decision on if the TransMountain expansion is incorporated in the public interest.
“If we’re likely to attract the investments we need to sustainably develop our energy resources, only then do we have to better engage Canadians, conduct deeper consultations with indians and base decisions on science, facts and evidence,” Carr said.
Anyone familiar with the NEB’s costly, painstaking and inclusive hearings knows that’s exactly what the NEB has been doing for many years. Yet one area it’s fled from is the climate change debate.
Though routinely asked by environmental organizations to get involved, the NEB decided in the past there wasn’t enough specific connection between a pipeline under review and also the greenhouse gas emissions of upstream and downstream facilities, said Caron, who had been NEB chair for seven years, vice-chair for two, an associate for 2 and chief operating officer for eight.
The Laval University engineering graduate would be a member of the panels that reviewed the Mackenzie pipeline, the base Keystone pipeline, the final TransMountain expansion, and was NEB chair throughout the Northern Gateway review.
In reviewing the bottom Keystone pipeline, for instance, the NEB concluded it could be given by a lot of upstream sources, and could feed its oil into just like many refineries, to make greenhouse gas effects “relevant” to a decision under the NEB Act, he said.
“The test is always relevance towards the benefits and drawbacks from the public interest from the pipeline,” he explained.
Board hearings are not an open-line radio show where you can now dial in
Caron is supportive of Canada’s global warming commitments in Paris, along with Alberta’s carbon tax and cap on oilsands emissions. He just doesn’t think pipelines are the right place to achieve those policy goals.
“Who is talking today concerning the need to change driving habits, in order to proceed to higher density housing, to market 1 of 2 cars, making transit more available?” he asks.
Caron also questions intends to expand public consultations. Under current legislation, the NEB has to hear directly affected persons, as well as people it believes would bring special value or expertise.
In recent years, hundreds, even a large number of participants have sought to have a say, seen as an way to delay proceedings.
“Does the Trudeau government wish to relax the directly affected test?” Caron asks. “That would be very interesting to monitor. Even with the directly affected label that you need to show, we got a large number of intervenors attempting to be heard. And in the case of TransMountain, many were offended that the panel chose as a matter of procedural choice, to not include cross-examination other than the oral proof of indigenous people and also the elders.”
Caron agrees with a current decision by the Federal Court of Appeal that does not all of us have the right to take part in hearings.
The 2014 ruling arrived reaction to requests for any judicial review by environmental organization Forest Ethics and by Donna Sinclair, once they were excluded from NEB hearings on the Line 9 reversal. Sinclair had claimed she could bring special religious knowledge because “a spill from the pipeline, even far away from her home, is ‘an insult to [her sense] of the holy’,” the ruling noted.
“Board hearings aren’t an open-line radio show where you can now dial in and participate,” the court ruled. “Nor could they be a drop-in centre for anybody to raise anything, regardless of how remote it may be to the board’s task of controlling the construction and operation of oil and gas pipelines.”
Caron supports wholeheartedly the development of consultations so there is more feedback from Canada’s indigenous people, because “there cannot be an excessive amount of a good thing.”
He is hopeful there will be more to reconciliation than their input on pipelines.
It’s the opportunity of “perverse effects” from the new global warming test that worries him the most.
One is federal intrusion into provincial powers.
“Imagine the scene – the us government saying ‘The provinces do the things they can, we don’t think it’s enough, then when we look at pipelines, which is a method for provinces to move what underneath the Constitution they have the ability to build up, we will choke the oil flowing through these pipelines therefore we can reach our Paris commitments,’” Caron said. “If it is not a federal intrusion of provincial powers, if it is not also doing policy through the backdoor, what exactly is it?”
And he’s concerned that Canadian oil will be kept in the ground, while oil will be imported in growing quantities from regimes like Saudi Arabia to assist meet demand included in a transition to a carbon-free society.
“You have a situation where you say, ‘As a nation we have were able to become embarrassed with our prosperity in natural resources,’” Caron said. “And that’s OK because we’re feeling better within our conscience.”
Overall, the changes reverse a few of the reforms made only 4 years ago underneath the Conservatives, who eliminated duplication with provinces and introduced fixed timelines.
For sure, Ottawa may reveal that change can triumph over experience, and that using a national debate on climate change, aboriginal rights, oilsands growth and regulation on the back of pipeline reviews can soothe discord and obtain them built. But it could also break what didn’t need fixing, and make pipeline reviews much more political. Like Caron, many are watching.
ccattaneo@nationalpost.com
twitter.com/cattaneooutwest
