Erratic regulation of Energy East
For those of us who hoped the proposed $15.7-billion Energy East project would finally join Atlantic Canada to the national pipeline network – and give us secure access to Western Canadian oil that Ontario and Quebec have benefited from for six decades – last week’s decision by TransCanada Corp. to put the project application on a 30day hold is a disappointment and grave concern.
But given the National Energy Board’s erratic handling of the Energy East hearings, already stopped and restarted once because panel members got into a conflict of interest, TransCanada’s move is not such a surprise.
TransCanada is seeking a 30-day suspension of the application “to conduct a careful review of recent changes announced by the NEB regarding the list of issues and environmental assessment factors” of the project. It wants to understand how the changes — which it called “significant” — impact project “costs, schedules and viability.”
The changes relate to the topics on which the board will hear submissions in its hearings on Energy East.
For the first time in a pipeline application, the board will allow discussion of the effect of meeting government greenhouse gas (GHG) emissions targets on the viability and need for the project. The board will also consider for the first time the impact of any upstream and downstream GHG emissions — that is, from oil producers and consumers — that it deems related to the pipeline.
Historically, the NEB has only considered environmental impacts that relate directly to construction and operation of pipelines. Last year, when it approved expansion of the Kinder Morgan pipeline that carries Alberta oil to the West Coast, the NEB only required the line to offset GHG emissions related to construction. And that was a groundbreaking decision in considering GHGs at all.
Making Energy East potentially accountable for producer and consumer emissions goes far beyond this in terms of costs and uncertainty. And, indeed, it stretches credulity.
Pipeline operators have no control over the behaviour of consumers or producers. And there’s no need to put that onus on them.
Governments themselves can directly regulate producer emissions and consumer demand for oil and gas, through legislation and taxation. They don’t need to do this by saying one part of the country may have a pipeline, while another may not, or by putting tougher restrictions on an East Coast pipeline than they apply to a West Coast one or to lines running to the U.S. That is irrational discrimination, not sound environmental policy. The East Coast and the project evaluation deserve better from the NEB.