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Among the promises made by Justin Trudeau’s Liberal government to revive “trust” in the National Energy Board, there is one which former chairman Gaetan Caron really loves: Keep politics from pipeline reviews.
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It’s “regrettable” that so many politicians have lashed out in the quasi-judicial regulator, without providing backup evidence, and understanding that its 400 employees cannot defend themselves, said Caron, who led the Calgary-based energy regulator until retiring two years ago, after supervising or ruling on a few of the highest-profile energy projects in NEB history.
“Overall circumstances have made it in order that it has become cool responsible the NEB for being all sorts of things – such as being captured by those it regulates, not focused on evidence, and relaxed on safety,” Caron said in an interview this week at the University of Calgary’s downtown campus, where he enjoys working with students being an executive fellow at the School of Public Policy.
“For politicians to criticize a public institution, without the accountability to explain why, and defend themselves in an evidence debate, I’ve found it very unfortunate.”
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But Caron is skeptical that Trudeau’s de-politicization plan will succeed, or that his fixes to “modernize” the board will repair Canada’s pipeline divide.
Instead, he worries that pipelines have grown to be proxies for bigger issues like global warming policy and aboriginal reconciliation that needs to be dealt with elsewhere, which the proposed reforms will deepen animosity between regions, different levels of government, project proponents and opponents.
Caron mentioned saving money Party and the federal NDP for going “aggressively negative” on the NEB. But the new Liberal government also did plenty to discredit the institution.
The latest broadside came in Calgary a week ago, when Trudeau said: “The framework and the approach that the previous government took in the final Ten years on pipelines didn’t get anything done. They were not able to build the general public trust, the general public confidence to move forward on such projects. And what we need to do is restore a framework by which Canadians will have rely upon their regulators and their governments to both create economic growth to profit all Canadians but also to protect the environment.”
In fact, Enbridge Inc.’s Northern Gateway pipeline project stalled due to aboriginal opposition, after receiving NEB and cabinet approval. TransCanada Corp.’s Keystone XL project was killed by the U.S. administration. The Mackenzie pipeline wasn’t built because Arctic gas was no longer required after its review took too much time, a cautionary tale that lengthy reviews kill projects.
On another hand, Enbridge’s Alberta Clipper pipeline and Line 9 reversal, TransCanada’s base Keystone, and Kinder Morgan’s last TransMountain expansion all moved forward.
Trudeau wouldn’t even say whether he’d give Energy East, proposed by TransCanada, the green light whether it receives NEB approval – hardly a vote of confidence in the regulator.
His explanation: “I am not going to pre-judge or shortcut the NEB process as the story goes forward. It’s important that we have confidence within our regulators.”
Promised throughout the fall election campaign, the NEB reforms started fourteen days ago. Natural Resources Minister Jim Carr and Environment Minister Catherine McKenna introduced interim measures for pipeline projects already under review – Kinder Morgan’s new TransMountain expansion, which within the final stages of a two year review and due to have an NEB recommendation in May, and Energy East, the next big project to carry public hearings.
Under the brand new regime, there’ll an additional study from the greenhouse gas emissions of oil and gas projects that feed oil in to the pipelines, in addition to additional consultations with aboriginal groups and the public. The additional process will require place after the NEB has completed its own. A complete overhaul from the NEB and also the environmental regulatory process is anticipated in the future years.
The most immediate impact is that the federal cabinet will require one more 4 months, or until December, to achieve its decision on if the TransMountain expansion is in the public interest.
“If we’re likely to attract the investments we need to sustainably develop our energy resources, only then do we have to better engage Canadians, conduct deeper consultations with indigenous peoples and base decisions on science, facts and evidence,” Carr said.
Anyone acquainted with the NEB’s costly, painstaking and inclusive hearings knows that is exactly what the NEB has been doing for decades. Yet an area it’s fled from may be the global warming debate.
Though routinely asked by environmental organizations to obtain involved, the NEB decided previously there wasn’t enough specific link between a pipeline under review and also the greenhouse gas emissions of upstream and downstream facilities, said Caron, who had been NEB chair for seven years, vice-chair for 2, an associate for two and chief operating officer for eight.
The Laval University engineering graduate would be a member of the panels that reviewed the Mackenzie pipeline, the bottom Keystone pipeline, the final TransMountain expansion, and was NEB chair during the Northern Gateway review.
In reviewing the base Keystone pipeline, for instance, the NEB concluded it may be given by a lot of upstream sources, and may feed its oil into just like many refineries, to make greenhouse gas effects “relevant” to some decision under the NEB Act, he explained.
“The test is definitely relevance towards the pros and cons of the public interest from the pipeline,” he said.
Board hearings aren’t an open-line radio show where you can now dial in
Caron is supportive of Canada’s global warming commitments in Paris, along with Alberta’s carbon tax and cap on oilsands emissions. He just doesn’t think pipelines are the right place to achieve those policy goals.
“Who is talking today about the need to change driving habits, in order to move to higher density housing, to sell one of two cars, making transit more available?” he asks.
Caron also questions intends to expand public consultations. Under current legislation, the NEB has to hear directly affected persons, in addition to people it believes will bring special value or expertise.
In recent years, hundreds, even thousands of participants have sought to have a say, seen as a tactic to delay proceedings.
“Does the Trudeau government want to relax the directly affected test?” Caron asks. “That would be very interesting to watch. Despite the directly affected label that you need to show, we’ve got thousands of intervenors attempting to be heard. And in the situation of TransMountain, many were offended the panel chose as a matter of procedural choice, to not include cross-examination other than the oral proof of indigenous people and the elders.”
Caron will follow a current decision by the Federal Court of Appeal that does not everyone has the right to participate in hearings.
The 2014 ruling arrived response to requests for any judicial review by environmental organization Forest Ethics by Donna Sinclair, once they were excluded from NEB hearings at risk 9 reversal. Sinclair had claimed she could bring special religious knowledge because “a spill from the pipeline, even a long way away from her home, is ‘an insult to [her sense] of the holy’,” the ruling noted.
“Board hearings aren’t an open-line radio show where anyone can dial in and participate,” a legal court ruled. “Nor are they a drop-in centre for anyone to raise anything, regardless of how remote it may be towards the board’s task of controlling the construction and operation of gas and oil pipelines.”
Caron supports wholeheartedly the development of consultations so there is more feedback from Canada’s indigenous people, because “there cannot be an excessive amount of the best thing.”
He is hopeful that there could be more to reconciliation than their input on pipelines.
It’s the potential for “perverse effects” in the new climate change test that worries him the most.
One is federal intrusion into provincial powers.
“Imagine the scene – the us government saying ‘The provinces are doing the things they can, we don’t think it’s enough, so when we look at pipelines, which is a method for provinces to move what underneath the Constitution they have the power to build up, we will choke the oil flowing with these pipelines therefore we can reach our Paris commitments,’” Caron said. “If it is not a federal intrusion of provincial powers, if it is not also doing policy through the backdoor, what exactly is it?”
And he’s concerned that Canadian oil is going to be held in the floor, while oil will be imported in growing quantities from regimes like Saudi Arabia to help meet demand as part of a transition to some carbon-free society.
“You possess a situation in which you say, ‘As a nation we have were able to become embarrassed with our prosperity in natural resources,’” Caron said. “And that is OK because we’re feeling better in our conscience.”
Overall, the alterations reverse a few of the reforms made only four years ago under the Conservatives, who eliminated duplication with provinces and introduced fixed timelines.
For sure, Ottawa may show that change can overcome experience, and that using a national debate on global warming, aboriginal rights, oilsands growth and regulation around the back of pipeline reviews can soothe discord and obtain them built. But it may also break what didn’t need fixing, making pipeline reviews even more political. Like Caron, most are watching.
ccattaneo@nationalpost.com
twitter.com/cattaneooutwest
