Environment Canada offers to cover costs of pipeline's climate change research

Canada's federal environment department says it made an offer to the National Energy Board to conduct and cover all costs associated with research on the climate change implications of the proposed Energy East pipeline.

Environment and Climate Change Canada made this offer after the project review was put on hold following a request from the proponent, Calgary-based energy giant, TransCanada Corp.

The offer came four days after New Brunswick Premier Brian Gallant sent a letter to Prime Minister Justin Trudeau saying he believed the Energy East project was now in “jeopardy.”

TransCanada has said that it is reconsidering plans to build the project due to a series of stringent conditions imposed by the NEB, which include a review of the cumulative climate change impacts of the project and of the oil that would be transported by the pipeline.

The energy company made these comments as it was in the midst of a call to get new customers for its other major project, the Keystone XL pipeline, which would ship oil from Alberta to the gulf coast of Texas.

If built, Energy East would stretch 4,500 kilometres and ship more than a million barrels of oil per day from the Canadian Prairies to the East Coast.

The NEB announced on Aug. 23 that it would take into account both upstream and downstream greenhouse gas emissions in its review of the pipeline. Considering the impact of all GHG emissions made in creating and operating the pipeline, as well as from the shipment of the oil, would be an historic first for any pipeline reviewed by the federal regulator.

Two weeks later, on Sept. 7, TransCanada announced in a statement it was seeking a 30-day suspension of its Energy East pipeline application to “conduct a careful review of recent changes announced by the NEB” to better understand the impact of the costs, schedules and viability of the project.

In his Sept. 14 letter to Trudeau, Natural Resources Minister Jim Carr and Environment Minister Catherine McKenna, New Brunswick Premier Gallant made three requests to the government, including that “the federal government should publicly commit to fund and undertake the upstream and downstream GHG emissions analysis as well as similar analysis of alternate oil supply life cycles to avoid added costs and constraints for the project proponent.”

He also asked the federal government to issue a public statement of principles and to continue to support industry by responding to questions asked by TransCanada during its review period.

On Sept. 18, Environment and Climate Change Canada offered to conduct and pay for both upstream and downstream GHG emissions analysis.

“Given public interest in the issue, the Government felt it was important to clarify its intent to assess emissions related to the project in a manner consistent with its January 2016 interim approach and the reviews it has carried out for other recent pipeline projects, such as the Line 3 Replacement and Trans Mountain Pipeline Expansion projects,” said Amélie Desmarais, a media officer at Environment Canada, in an email to National Observer.

Environment and Climate Change Canada has conducted and paid for the analysis of upstream GHG emissions of pipeline projects since January 2016, when interim measures for pipeline reviews were introduced.

The department has completed assessment of upstream GHG emissions for six major pipeline projects, including Enbridge’s Line 3 pipeline replacement project and the TransMountain expansion project.

Budget 2016 allocated $5.4 million over two years for the department to undertake such assessments. Environment Canada told National Observer that if the NEB accepts its offer, it will use this existing funding for that work.

The NEB said in an email to National Observer that its hearing panel will not issue further decisions, take request or take further process steps related to the Energy East project until after the 30-day suspension ending on Oct. 8, 2017. This includes deciding whether to accept Environment Canada's offer.

At a press conference on Sept. 19, Prime Minister Justin Trudeau said he was glad to work with provincial governments across the country, including the one in New Brunswick.

“I look forward to continuing to work with all premiers on protecting the environment and growing the economy,” Trudeau said.

The federal government decides whether to approve pipelines based on the “public interest,” he said, “not on a political basis, but the facts of the case.”

“We know that there is a process to go through. We need to make sure we’ve developed public confidence in the process," Trudeau added.

However, Patrick DeRochie, climate and energy program manager at Environmental Defence, believes it shows the pipeline review process is broken.

“If the government's intention is to restore public confidence in this review process, then they're not doing themselves a favour by intervening in this way while the review is suspended,” he said to National Observer.

— With files from Carl Meyer