The pillow, the sword and the pipeline: the scoop that unraveled Energy East

The New Brunswick Telegraph Journal ran an editorial last week complaining that the Energy East pipeline had been "murdered."

"The pipeline is now the victim of first degree murder," said the editorial. "Yet the weapon was not MacBeth's (sic) dagger or Brutus' sword but a soft, warm, fuzzy pillow, with which the pipeline was smothered."

The editorial lamented that Canada's energy regulator was going to consider the cumulative effects of the proposed pipeline before deciding whether it was in the public interest. The argument was that this new criteria was too stringent and had effectively "murdered" the chances of this pipeline ever being built.

What is it about this pipeline that has generated so much political drama and intrigue? Maybe I'm a bit biased on this point, but I think it is only readers and subscribers of National Observer that have been getting a complete picture about this project and what's at stake.

So here's a summary:

• Energy East is the largest oil industry expansion project of its kind in North America.
• It was proposed by TransCanada, a multinational energy company.
• TransCanada has a wide range of operations, including renewable energy — but their core business is oil and gas distribution on a vast network of pipelines.
• If approved, Energy East would ship up to 1.1 million barrels of oil from Alberta, Saskatchewan and North Dakota to refineries in Quebec and New Brunswick.
• Oil producers are in favour of major pipeline projects to coastal regions since they would give them access to tidewater for export by tankers.
• The federal regulator, the National Energy Board (NEB), proposed in August — for the first time in its history — to review not only how much pollution would be caused during construction and operations of the pipeline, but also to review what kind of pollution would be caused by the product it was being built to carry — heavy oil from Canada's oilsands.
• The oilsands are Canada's fastest growing source of greenhouse gas emissions.
• Humans are contributing to climate change by burning fossil fuels like the oilsands, that release pollution which traps heat in the atmosphere and warms the planet.
• The NEB describes itself as a life-cycle regulator, which means it must provide long-term oversight for all infrastructure under its jurisdiction.
• When the Liberal government of Prime Minister Justin Trudeau was sworn into office, the NEB denied that climate change considerations were part of its mandate.
• NEB president and chief executive officer Peter Watson wrote in a letter to Natural Resources Minister Jim Carr on Nov. 4, 2015: "There is heightened public expectation that we will address many issues in the debate around fossil fuels, including climate change and the pace of oil and gas development. These issues are legitimate concerns of the public; however they fall outside our mandate."
• Watson recused himself from any involvement or decisions related to the review of Energy East on Sept. 9, 2016 after admitting that he appeared to be biased following revelations by National Observer that he had participated in a private meeting with a TransCanada consultant, former Quebec premier Jean Charest.
• The new Energy East panel disagreed with Watson's assessment that climate change was outside of the NEB's mandate
• The New Brunswick Telegraph-Journal is owned by Brunswick News, a company that's owned by the Irving family. Irving Oil is another company in that family empire. And it just so happens that Irving Oil is also a business partner in the Energy East proposal.

Those are the facts.

Energy East was first proposed at a time when the global market for oil was much stronger than it is now. As Bloomberg reported three years ago, the east-west pipeline was an alternative to another TransCanada project, Keystone XL, when it appeared that pipeline, linking Alberta to the Gulf Coast of Texas, would never be approved by President Obama's administration.

Of course, all of that changed in March when the new Trump administration reversed Obama's move and gave a thumbs-up to Keystone XL.

What happened to the Energy East pipeline?

After a few days lurking around oil industry headquarters in Calgary, I can tell you that not everyone in this town believes the Energy East pipeline project makes good business sense, regardless of whatever conditions were imposed by the regulator.

If things had gone according to plan for TransCanada and the project's backers, we would now be more than halfway through hearings to approve Energy East. All this would have been done under rules and conditions laid out by former prime minister Stephen Harper's government to limit public participation and to narrow the scope of the review. The process began rolling out under the watch of high-ranking members of the regulator, handpicked by the previous Conservative government.

Under that process, the first Energy East panel determined that the company's application was "complete" even though TransCanada hadn't demonstrated how it could safely build its crude oil pipeline under two major bodies of water in central Canada — the St. Lawrence and Ottawa Rivers. The original panelists also decided that it was not important to consider cumulative climate-warming impacts of the project.

The Irving-owned newspapers may believe that a "soft, warm and fuzzy pillow" is what got in the way of rubber-stamping a massive pipeline in the dark. I think something more substantial happened.

The price of the government's secrecy is high for taxpayers

I spoke to a public servant recently who works on processing freedom of information requests for a government organization. He told me that he has been working overtime to handle a flood of my own formal requests for access to information.

I'm only able to keep up in filing dozens of requests for access to information thanks to those of you who subscribe to National Observer. I'd say that every subscription is an investment that supports investigative journalism. And the Energy East pipeline debacle is clear proof of that.

Getting back to the public servant, I think it’s heartening to hear stories about hard-working professional public servants who promote openness and accountability from within the government. But sadly, many of them are running up against a brick wall because of their managers.

Taxpayers wouldn’t have to foot the bill for overtime on processing access to information requests, likely millions of dollars, if management at government departments and agencies were transparent, instead of being secretive about how they are spending taxpayer money.

If government were truly open and shared all the evidence it used to make decisions, the reporters at National Observer wouldn't need to file dozens of access to information requests every month to dig up inconvenient truths about the stuff that affects your daily lives.

Secrecy in government is the norm, but you need to know

But the current toxic culture in government, developed over many years, promotes secrecy. This is why journalism is so essential to the public good. This is why it's so important for you to invest in good journalism.

Construction of this pipeline would create tens of thousands of jobs in six provinces and provide a boost to Alberta's slumping oilpatch, its supporters say. Its opponents argue the project is too risky since it could cause spills in major waterways and drive an increase in pollution that would push Canada's international climate change goals out of reach.

My role as a journalist isn't to take sides on an important debate. But I believe I have a responsibility to uncover all the facts and ensure that government decisions aren't rigged.

Before National Observer entered the fray, I didn't see much in-depth coverage of how this pipeline and its economic impacts would fit in with global economic trends that show investors are abandoning from fossil fuels.

I saw little coverage of whether Canada was providing adequate oversight of the powerful energy industry. I saw little analysis of how weak government oversight of industry can quickly become a subsidy when Canadians have to pay the bill to clean up after a spill and other unsafe operations.

How secrecy costs you money

In Ottawa, there are a number of senior public servants who seem to assume that if they don't answer a tough question directly, the journalist who asked it will eventually give up and move on to another story. There's a chain of command that creates secrecy and, sadly, it often works. Most news outlets just don't have the resources to stay on the trail and keep investigating.

In most cases I've seen in my reporting, the people in government who care the most about transparency and democracy have the least amount of power to change things.

And the people in management are correct in assuming that hiding information can conceal a news story they don’t want the public to see. Unless they are dealing with National Observer.

The culture in our newsroom is different. If I don’t get an answer to a question today about a matter of public interest — a matter that could affect millions of people — you can count on me to ask that question again tomorrow.

Many of you reading this today have already subscribed to National Observer and you know this. And I thank you for playing such a critical role in democracy by subscribing and making an investment so that I can continue to investigate where others have looked the other way.

Safeguard your values: here's how it works

The investigation we did that uncovered the so-called Charest Affair was triggered in 2014 when I obtained a copy of an internal public relations strategy produced by the NEB. This strategy was released at around the same time that the regulator was establishing its first Energy East panel to review the project.

The strategy was part of a slew of documents I had been poring through for years from deep inside former prime minister Stephen Harper's government. They unveiled details of an elaborate communications plan, in partnership with oil and gas industry lobbyists, to drive home key messages into the public consciousness with misleading information about Canada's energy industry and environmental groups.

Also, the NEB's PR strategy included the creation of new regional offices in Montreal and Vancouver.

In July 2016, my efforts to learn more about these mysterious new NEB offices in Montreal and Vancouver turned up evidence about a bunch of meetings between high-ranking NEB officials — including members of the NEB Energy East panel — with other prominent people such as Charest, the former premier of Quebec.

And Charest, who left politics in 2012, had gone on to work at a law firm, accepting some consulting work for TransCanada.

As you probably know by now, the NEB downplayed my questions about this meeting, saying they didn't know he was working for TransCanada at that time, and that nothing inappropriate was discussed.

A federal panel that reviews a pipeline project like this one is similar to a jury or a panel of judges in a courtroom. So they would certainly have no business taking part in private meetings with a project proponent or opponent, let alone discuss the project behind closed doors.

But they did both, and they even got some political advice from Charest about how to gain support for Energy East in Quebec.

I kept asking questions

I’ve been observing how the management at the NEB operates for years, so I had feeling they might not tell me the truth if I asked them about it. After all, only a few months before the Charest Affair broke wide open, the NEB had released some reports to me showing that its employees had a low level of confidence in management.

In fact, the stats showed that only one in three of their employees said they understood the reasons for management decision and direction.

As I asked the NEB for an explanation about the meetings, I also sent in some formal requests for answers to questions in the mail using the federal Access to Information Act.

While they told me one thing in July, they were forced by the law to tell the whole truth in August.

After they revealed the truth about the Charest meeting, they still claimed they had done nothing wrong, and attempted to proceed with hearings on Energy East.

As you probably know by now, what followed was an avalanche of developments that ultimately led the panel and the chief executive officer of the NEB to admit that they appeared to be biased about TransCanada’s Energy East project.

Stephen Harper’s hand-picked choices to lead the review of the Energy East pipeline were forced to recuse themselves and every decision that the panel made was considered to be tainted and scrapped as a result.

Instead, a new panel was named by Prime Minister Justin Trudeau's government to lead the federal assessment of Energy East and it introduced the new stringent conditions for the review.

In New Brunswick, some people haven't been happy about this, as anyone reading the Telegraph-Journal would know.

Jacques Poitras, a CBC journalist in New Brunswick, who is writing a book about Energy East, described the Telegraph-Journal's response as "an exceptionally angry editorial."

The Irving-owned newspaper said that it was "absurd" for a company building fossil fuel infrastructure to take responsibility for the fossil fuels that are allowing it to make massive profits. Then it complained that TransCanada would invest its money outside of Canada, and that New Brunswick could take comfort by blaming environmentalists or Quebec.

And while it printed arguments that could divide Canadians, this editorial appeared to have missed something that is uniting the rest of the world. Even big financial institutions are starting to get the message in Canada as global markets abandon 20th century fossil fuels and the billions in costs they leave behind. They are moving to new forms of energy for the 21st century that are expected to generate 24 million jobs by 2030.

Powerful interests came clean

Will Canada be a part of this shift?

As you watch this saga unfolding, I’d like you to remember that solid evidence-based journalism makes a difference. And it can continue, with your support, to have an impact that puts your own values first.

This is what helps ensure that powerful interests are playing by the rules just like you do.

And quite frankly, based on what some oil industry insiders are saying behind the scenes these days, the delays in the Energy East hearings — triggered by National Observer's reporting — may have actually saved TransCanada and others a lot of money on a project that the industry was just not ready to deliver with great success.

Getting access to information about how the government operates is a key part of our democracy. As the Washington Post has been saying lately, “democracy dies in darkness.”

Here in Canada, we have freedom of speech enshrined in our constitution. But Canadians cannot truly speak freely about their government and exercise their democratic rights, if they’re deprived of knowledge.

It’s always a shame when the leaders of Canada's public service don’t take their responsibility to be transparent seriously.

And just imagine what it means when the head of a government organization participates in a meeting and is still in charge when his employees put out false statements about what that meeting was about.

The NEB put out false statements about its meeting with Jean Charest in July 2016.

They were forced to admit this a few weeks later.

This was because people like you decided to pay for journalists to uncover the truth.

National Observer was then able to give you the tools to raise your own tough questions directly to the government and demand that they do the right thing.

But there are still some unanswered questions about what went on behind closed doors that could have implications for what will happen in the future.

Even TransCanada's chief executive, Russ Girling, wasn't entirely sure about what happened with the Charest meeting when I asked him about it last summer.

Shortly after I reported on the NEB's private meeting with Jean Charest, senior management at the regulator spent nearly $25,000 of your money for a private investigator to find out who my sources were. The top bureaucrat at the NEB, chief operating officer Josée Touchette, later told National Observer that this contract was a "good idea."

Is it just me, or is it possible they haven't quite figured out the difference between what's right and wrong?

There are a lot of stories like this one that I've known about for months. I'm having a hard time getting to them all. I work with a dedicated staff of reporters at National Observer. We have been your watchdogs for two years, but we can only do so much, by ourselves to defend your values and hold the powerful to account for the things that affect your lives.

If you want to help bring more transparency to Canada, subscribe to National Observer. If you already subscribe, please gift a subscription to a friend.

You don't want anyone in Canada to miss the next hard-hitting investigations we'll be bringing to you this month.