Eastbound and down: Atlantic Canada is the next major pipeline battleground
Melissa Campeau, Financial Post, May 8, 2014
Western-based oil pipeline projects have for several years generated opposition worthy of Hollywood dramas. This past March, for example, police arrested hundreds of Keystone XL protesters who had tied themselves to a White House fence in opposition to the deeply divisive development. On this side of the border, environmental groups and Aboriginal communities flooded the courts with lawsuits last December-10 when all was said and done-beginning just three hours after the Joint Review Panel gave the go-ahead to the Northern Gateway pipeline in northern B.C.
But while much of the nation has been watching the action to the west, two major pipeline projects have been moving closer to implementation in the east: TransCanada Corp.’s Energy East and Enbridge Inc.’s reversal of its existing Line 9. Yet, so far, the fuss has been minimal and largely under the radar. Of course, it’s early days for both projects. Energy East will be filing initial regulatory paperwork this summer and Line 9 has an initial go-ahead from the National Energy Board (NEB), but with a long list of conditions to be met before the board will give its final nod.
Line 9 is the less complex, though not less controversial, of the two projects, since it uses an existing 830-kilometre stretch of pipeline and involves just two provinces. It’s significantly closer to being a reality, as well. TheNEBlast October approved, with 30 conditions, the project, which entails reversing the flow of the pipeline, sending oil from Sarnia to Montreal. Enbridge also plans on upping the volume of the pipeline to as much as 300,000 barrels per day from 60,000, and sending Alberta tar sands oil through the pipes instead of the crude oil it’s been carrying for decades.
Energy East, on the other hand, is a massive, complex project, with an estimated price tag of $12 billion. If executed as planned, the 4,600-kilometre pipeline will have the capacity to transport 1.1 million barrels of crude every day from Hardisty, Alta., to Saint John, N.B. That’s more than Keystone XL could handle if it ever gets approved. Right now, the project is only a proposal-no regulatory documents have been filed-but the current vision could see Energy East sending oil to Quebec as early as 2017 and to NewBrunswick by 2018.
Both projects are in something of a pause period, with TransCanada about to file official paperwork for Energy East and Enbridge entrenched in the work of meeting the conditions for the reversal of Line 9. But all that could change in a heartbeat. There’s simmering opposition from First Nations communities, environmental groups, small towns, big cities and even provincial governments. As the developments march forward, there’s every chance these groups will turn up the heat significantly.
Line 9 and Energy East aren’t household names yet, but that doesn’t mean they have escaped the spotlight completely. Of the two developments, the reversal of Line 9 has taken far more lumps. It’s closer to an official green light, for starters, and it’s been under scrutiny for considerably longer. Those who oppose it have some fairly tangible issues to sink their teeth into as well. The pipeline, which is now 38 years old, travels directly underneath the most densely populated strip of land in Canada, stretching from Sarnia to Montreal. It also crosses every major tributary flowing into Lake Ontario.
Last summer, demonstrators who blockaded Enbridge’s pipeline hub in Westover, Ont., (near Hamilton) to protest the development were eventually arrested, generating a fair number of headlines in the process. At the NEB hearing for the project last fall, crowds outside the Metro Convention Centre in Toronto became raucous enough that the regulator, fearing for participants’ safety, shut down the last day of hearings and asked Enbridge to hand over its final statements in writing.
When the board eventually approved the proposal, it tacked on 30 conditions, mainly dealing with engineering and safety concerns. The approval generated some vocal arguments from the opposition, but the conditions were just as contentious, revealing deep divides over the aging infrastructure’s ability to take on its new assignment. “The conditions are very, very thorough,” says Warren Mabee, assistant professor at Queen’s University’s School of Policy Studies and the Department of Geography in Kingston, Ont. “They run the full gamut from technical testing to working with the municipalities up and down the line. I do think many of the issues that people have raised prior to the conditional approval have been addressed in the conditions in the approval for Line 9.”
But the conditions didn’t do much to allay concerns for critics of the project. “None of the 30 conditions address the specific requests by the government of Ontario, the municipalities or environmental groups,” says Adam Scott, climate and energy program manager at Environmental Defence, a green action organization based in Toronto. “Most of the conditions are things they are legally required to do in terms of basic safety. There are no real new safety measures.”
Energy East, meanwhile, is still in its infancy, so those who might oppose it don’t have many details to hang an argument on just yet. It’s also massive in scope, which means a singular community is less likely to feel Energy East is its own to embrace or fight. “It’s bigger than the Mackenzie Valley pipeline, bigger than the Northern Gateway,” Mabee says. “It involves a lot more players, a lot more activity, and many governments because it crosses so many provinces.” That pretty much guarantees a rough reception, especially since a proposed path would take the pipeline through some very sensitive areas. “There are watersheds, First Nations communities and other groups, all of whom have legitimate concerns and a need to walk through this process,” Mabee says. “They need to be involved.”
The most significant organized pushback to Energy East so far is from clean energy group Pembina’s publication, Climate Implications of the Proposed Energy East Pipeline. The 32-page report claims the project, as planned, would represent a 34% to 39% increase from current oil sands production levels, equal to adding seven million cars to Canada’s roads. Adding fuel to environmentalists’ fire is the Harper government’s 2012 nixing of mandatory federal environmental assessments for pipelines such as these. Changing the rules means Energy East, if approved, won’t need a federal environmental review. (Line 9 wouldn’t have required one anyway since it is already in the ground.) The decision seems intended to quicken the green-lighting of energy projects, but it’s also raising the ire of those who oppose the pipelines. With Keystone XL and Northern Gateway projects making headlines in the past few years-and environmental concerns about both reaching more mainstream audiences – it’s possible removing the environmental testing hurdle will provoke more widespread and vocal opposition, ultimately hindering rather than hurrying the pipelines.
Another major frustration for groups and individuals concerned about pipeline progress has been the hot-ticket nature of the NEB hearings. New federal rules-starting with the Line 9 hearings – make it much tougher to have a say during the proceedings. It’s not a leap to connect the stricter rules for entry to the noisy, angry crowd gathered outside the proceedings last fall, and the resulting waves of stories sympathetic to the protestors in local and national papers.
Green Party of Canada leader Elizabeth May called the new rules unfair and added she felt they were a deliberate attempt to undercut the long-standing right of the public to be heard. And Scott says he’s seen a flurry of legal challenges to the regulatory approvals of Line 9 and Northern Gateway projects on the grounds they were inadequate or unconstitutional. “Exempting projects from environmental assessments and rigging NEB reviews in favour of development has undermined the legitimacy of Canada’s regulatory system, fuelling the growing public opposition to projects like Energy East,” he says. Mabee notes the energy companies have taken steps to ease the tensions created by the federal government’s moves. Although Enbridge has a conditional approval for Line 9, the company is still holding meetings with groups that oppose the project in the hopes of resolving major issues before they erupt. “There are still some ongoing negotiations for improving the safety and monitoring of the pipeline, especially in built-up and geographically sensitive areas,” says Julie Abouchar, a partner with Willms & Shier Environmental Lawyers in Toronto.
Voluntarily reaching out to groups that have felt marginalized at this point in the process isn’t an extraordinary measure so much as a survival tactic, given what widespread and vocal opposition might mean for the projects’ successes. “In TransCanada’s case,” Mabee says, “we have a company that’s willingly undertaking, at least in the case of Quebec and maybe in other cases, too, some additional environmental assessments for the project.”
Energy East spokesperson Philippe Cannon notes TransCanada has met with about 500 communities since last summer and more than 5,500 landowners in six provinces. He adds the company has held more than 60 open house events along the pipeline route so far and has plans for more in 2014. It has also met 155 First Nation and Metis organizations. When it comes to addressing affected communities, Aboriginal groups are likely at the top of the energy companies’ lists. “There are hundreds of Aboriginal communities and municipalities in the path of the projects and they’re going to have to resolve the issues raised by those communities,” Abouchar says. “The companies will garner quite a lot of support from First Nations communities if they can find real opportunities there. I don’t mean the brush-clearing contract in the pipeline’s path; I mean the opportunity to get involved in partnerships to build, operate or maintain different facilities related to the project.”
The projects’ success or failure may hinge on this, Abouchar says. “I think the outcome will be determined by the extent to which the companies are willing to work in this way with First Nations and the creativity of both the companies and affected Aboriginal communities in determining those opportunities,” she says. “If you’re looking at partnering with a First Nations community, you need more time to understand what the opportunities are and to put those business arrangements in place.”
This is true of any group with concerns about the project, especially influential organizations or communities with the ability to sway a greater number of followers and, ultimately, governments. But the relatively rushed nature of these projects is making calm, reasoned conversations challenging. “It’s very important to have good early engagement on meaningful topics,” says Abouchar. “You need a lot of lead time if you expect communities to understand the project, its impact, and to have a chance to move on the opportunities.”
Fast-tracking pipeline projects-by limiting the number of interveners in hearings and removing the mandatory environmental review – means fewer conversations between groups that have little or any common ground to start with. “The timelines the government came up with a few years ago, I feel like maybe we need to relax that and allow discussions to happen so, ultimately, people can feel better about the decisions we’re making,” Mabee says. “I think at some point we might want to say,’We need more time.’”
IT’S WHAT’S INSIDE THAT COUNTS
There are some issues that even the most languidly paced negotiations are unlikely to resolve. “The people who are adamantly opposed to the lines may be opposed for reasons that go beyond the purview of the pipeline,” Mabee says. “It’s not that they hate the pipelines, it’s that they hate what’s in the pipelines. They don’t agree with that resource extraction.” For many environmental groups, this is an elemental point of difference. “Building more fossil fuel infrastructure locks us in for decades of growing emissions at a time when we need to be focusing our efforts on alternative energy,” Scott says.
The link between fossil fuels and climate change is no longer a dotted line for the majority of Canadians. How big a problem this poses for the energy companies depends on how large and how vocal anti-oil activists become. What was once a fringe movement is now much more mainstream. Scott points to the headline-grabbing Keystone XL and Northern Gateway projects of recent years and says, “Only a few years ago, the public had little knowledge of the climate and spill risks of pipeline projects, but today we’re witnessing one of the largest environmental movements on the planet.”
On the other hand, the economic argument-cheaper oil for Canadians in the east, a boost to the economy with export profits once landlocked tar sands oil flows to the coast, and jobs for the eastern provinces-is compelling.ForNewBrunswick in particular, a province that currently has 10% unemployment, Energy East’s pluses might outweigh the negatives. An independent report by Deloitte & Touche, however, tossed a little cold water on those hopes. It estimated the three-year development phase of the pipeline project would create 332 direct jobs and the three-year construction phase in New Brunswick would, promisingly, generate 1,095 jobs. When the dust settles, though, the report estimated the pipeline would only add about 121 direct jobs during the project’s 40-year operations phase. “Yes, the employment shows up more in the west than in the rest of Canada,” Mabee says. “But there’s a gain for everybody if the oil sands are doing well or if the resource sector is doing well. It’s nuanced, and unfortunately that’s hard to get across these days.”
New Brunswick is also home to Irving Oil, which plans to build a $300-million terminal in Saint John to serve as the final stop for the Energy East pipeline. The Irving family, one of Canada’s wealthiest dynasties and owners of Irving Oil, wields a great deal of influence in the province. Together, their companies are the province’s largest private-sector employer, and one of those companies, Brunswick News, owns New Brunswick’s entire collection of English language dailies. That’s a lot of power to sway public opinion, yet the situation isn’t cut and dried. The province’s Green Party leader, David Coon, has been an outspoken critic of the proposed marine terminal. And last October, during the Atlantic Canada Energy Summit in Saint John, a coalition of environmental groups held a counter summit, Energy for Everyone, co-sponsored by Council of Canadians, Common Causes Saint John and the Conservation Council of New Brunswick. “There are a lot of tensions around energy issues in the province,” says Abouchar. “To me, it’s a little unpredictable as to how it’s going to go. It will depend to a large extent on how much the province, the citizens and the First Nations ofNewBrunswick will benefit from this project.”
That uncertainty is true beyond New Brunswick’s borders as well. There’s a motivated and persuasive group that feels there’s a great deal to be gained from Energy East and the reversal of Line 9. The real X factor is how big, how vocal and how influential the opposition is likely to become as the developments roll out. Their numbers may be small now, but they will likely grow given the inherent tug of war at play: two projects snaking their way through sensitive and populous areas on one side; the promise of jobs, easier to-access energy and trickle-down economic prosperity on the other.
Right now, Mabee says, it’s just the calm before the storm. “In a way, things are in limbo. When a final approval comes or a final denial comes for either project, that’s when we’re likely to see some real fireworks.”
Posted on May 9, 2014, in Oil & Gas and tagged Enbridge, Enbridge Line 3 Replacement, Enbridge line 9, Energy East, TransCanada Corp., TransCanada Energy East pipeline. Bookmark the permalink. 1 Comment.