The federal government is offering to foot the bill for the additional cost of assessing the carbon pollution associated with the proposed Energy East pipeline. We think TransCanada, the company behind Energy East – not Canadian citizens – should be financially liable for determining how much pollution its proposed pipeline would cause.
In August, the National Energy Board (NEB) ruled that it will take into account greenhouse gas (GHG) emissions in its review of Energy East. That is, it will study the carbon pollution emitted during the pipeline’s construction and operation, as well as from all the oil that would be extracted, refined, transported and burned because of Energy East. The NEB will also consider how laws and policies to reduce GHG emissions affect the need for the pipeline.
It’s reasonable and lawful for the NEB to consider carbon pollution and the impact of climate policies in the review of a tar sands pipeline.
But just two weeks after the NEB ruling, TransCanada asked for a 30-day suspension of the review process, saying that it had to study how the NEB’s new requirements would affect the pipeline’s cost, timing and viability. The request from TransCanada led to speculation that it was getting ready to pull the plug on Energy East, as new pipelines don’t make economic sense in a world that must move away from oil.
This also led TransCanada to complain to New Brunswick Premier Brian Gallant, one of Energy East’s most ardent supporters. Premier Gallant then wrote a letter to the Prime Minister asking the federal government to undertake and fund a carbon pollution analysis for Energy East.
The federal government agreed. The Minister of Natural Resources offered to undertake the GHG analysis “in order to avoid added cost constraints to the proponent.” (emphasis added).
Why does the Minister of Natural Resources appear to be intervening in the work of an independent, arms-length NEB panel, outside of the review process, while the review is suspended? Moreover, why is the Minister’s offer to TransCanada and the NEB for the explicit purpose of alleviating the costs of the review for TransCanada, and using public dollars to do so? And was his decision influenced by the request from the Premier of New Brunswick, who himself admits TransCanada expressed concerns about the review?
The federal government has thus far allowed the Energy East review panel to conduct its work independently, as flawed as the pipeline regulator may be. So it seems like inappropriate political interference to now be offering to help cover TransCanada’s costs while the review is suspended.
The whole episode confirms that the pipeline review process is broken and that the government is scrambling to legitimize the review of Energy East. It seems that neither TransCanada, provincial governments, the NEB, nor the federal government are clear on how high-carbon projects like Energy East should be reviewed at a time when Canada and the world have committed to cut carbon pollution.
The former Vice-President of TransCanada has even called for the federal government to clarify whether or not the carbon pollution from Energy East is consistent with national climate policy.
We’ve been saying for years just how broken the pipeline review process is. This latest development further emphasizes that the review of Energy East should be suspended, and not restarted until the modernization of the NEB and the overhaul of Canada’s environmental laws are complete.
It also shows that this pipeline doesn’t make any sense – environmentally or economically – in an era where it’s clear the world is transitioning off of oil.
TransCanada – not Canadian citizens – should have to pay for analyses of the carbon pollution that would be caused by Energy East. And the federal government, as the final decision-maker on this mega-pipeline, should not be offering to help TransCanada with the costs of getting its project application through the review process.