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After months of public criticism for its review of major pipeline projects, the National Energy Board (NEB) has announced that all decisions made by the original Energy East panel are officially void.
The new hearing panel for the controversial TransCanada Corp. project ruled on Friday that all decisions made by the previous panel members, who recused themselves in September last year, will be removed from the official hearing record. Panel members Roland George, Lyne Mercier and Jacques Gauthier stepped down from their positions amidst conflict of interest allegations. NEB chairman and chief executive officer Peter Watson also recused himself from dealings with the Energy East proposal following allegations that he appeared to be bias.
The new hearing panel, assigned earlier this month, will now reconsider whether the Energy East application is "complete," the list of participants in hearings, individual rulings on participation, and the hearing order itself. It will also decide the list of issues and factors to be included in the environmental assessment, under the Canadian Environmental Assessment Act, 2012.
Panel decides it was "the right thing to do"
“I think it would be fair to say starting from scratch almost, because they’re really restarting from the beginning," NEB communications officer Marc Drolet told National Observer. “They decided that starting from the beginning was the right thing to do and they will be looking at all the previous decisions that have been made. They will make new decisions.”
The decision also applies to TransCanada's lesser-known Eastern Mainline project, a proposal to add 250 kilometres of new natural gas pipeline facilities and nine compression facilities to an existing natural gas system in southern Ontario. The Energy East pipeline, the largest pipeline proposal in Canadian history, is 4,500-kilometre project that, if approved, would ship up to 1.1 million barrels of oil per day from producers in Alberta, Saskatchewan and North Dakota to refineries and marine ports in Quebec and New Brunswick.
All hearing steps and related deadlines are no longer applicable, said an NEB press release on Friday morning. The new hearing panel, consisting of bilingual appointees Don Ferguson, Carole Malo and Marc Paquin, will decide how to move forward with the hearing. They will also decide whether to consider the Energy East and Eastern Mainline proposals in a single hearing.
In a media statement, TransCanada's Tim Duboyce said the Calgary-based energy company will review the new panel's decision "to understand it's impact on TransCanada and the project."
"Energy East represents a new opportunity to bring Canadian oil to market more safely and with lower emissions than by train, while creating thousands of jobs all across the country and generating billions of dollars in new tax revenues and GDP growth," said Duboyce. "Energy East remains of critical strategic importance because it will end the need for refineries in Quebec and New Brunswick to import hundreds of thousands of barrels of foreign oil every day, while improving overseas market access for Canadian oil."
Lawyers, environmentalists pleased with decision
While TransCanada insisted that Energy East will help revitalize slumping provincial economies, opponents of the project celebrated the reset in the pipeline's proceedings. The project's critics argue that if approved, Energy East will cross more than 3,000 waterways from Alberta to New Brunswick, push Canada's climate change goals out of reach, and expose sensitive ecosystems to risk of an oil spill.
Ecojustice welcomed the news on Friday warmly. Earlier this month, the environmental law firm filed a new legal motion to stop the Energy East process in its tracks after a National Observer investigation revealed last summer that members of the original panel had met in secret with former Quebec premier Jean Charest, who was, at the time, contracted by TransCanada.
Two of the panel members, Gauthier and Mercier, along with chairman Watson, provided the ex-politician with advice on how to effectively engage with Quebec residents on the Energy East pipeline. After September's recusals, Ecojustice argued that the entire Energy East review process had been permeated with "bias," and the only solution to avoid the perception of conflict of interest was to start from scratch.
“It’s certainly a striking decision from the board, and it’s one that we welcome," said Ecojustice lawyer Charles Hatt. "It shows they’re taking seriously and understanding and giving effect to procedural fairness inCanada, which is something that has been a major critique of the National Energy Board."
"Today’s ruling by the new Energy East panel to void all decisions to date and restart the review from scratch is the right move," added Environmental Defence’s Patrick DeRochie. "The decision is in the best interest of all parties after the pipeline review was tainted beyond repair by the perception of bias."
The panel's decision also reflects demands made by the new pan-continental Treaty Alliance Against Tar Sands Expansion, an alliance of 122 indigenous nations across North America that oppose expansion of Alberta's oilsands, and all pipeline projects, rail and tanker traffic associated with it. Grand Chief Serge Simon of the Mohawk Council of Kanesatake said the NEB had no choice but to start over with Energy East.
“Kanesatake has said from the beginning that the NEB process is a sham and the NEB decision today confirms that,” he said in a media release. “But the meeting in question with Jean Charest that led to all of this was just the tip of the iceberg – the NEB is a biased and broken institution that has been rubber stamping tar sands pipelines for years.”
The new panel has decided that project applications do not need to refile their applications, and if it determines that the existing applications are still "complete," the 21-month time limit will start from scratch. Drolet said if the panel decides the applications are not complete, it could ask TransCanada to provide "additional information."
More work to be done on pipeline reviews
Despite Friday's news however, environmental organizations and First Nations say that the embattled NEB still has a lot of work to do before public confidence is restored in its ability to evaluate major energy projects. Despite hitting the reset button on Energy East, they argue, projects will still be reviewed under the same environmental assessment laws created by the Stephen Harper administration, despite Prime Minister Justin Trudeau's election promise to overhaul the way such reviews are done in Canada.
Environmental assessments, according to Environmental Defence, must involve more robust consideration of Canada's climate goals, full public participation, greater consultation with indigenous leadership, and high-quality energy data provided by experts outside of oil and gas industry employ. They should also be conducted by an environmental body rather than the NEB, says the organization, and in order to ensure diverse regional representation, NEB commissioners should not have to reside in Calgary.
"For the new review of Energy East to be credible, the process cannot be restarted until the reform of the National Energy Board (NEB) and Canada’s environmental assessment laws is complete," said DeRochie. "The federal government admitted that the current process is broken and appointed an expert panel to modernize the NEB."
Keith Stewart, senior energy strategist for Greenpeace Canada, agreed:
"There is no way that the new review should be allowed to go ahead under the old rules, which are being re-written as we speak to address the structural pro-industry bias introduced by the Harper government and to incorporate consideration of climate change impacts."
Concerns about Keystone, Kinder Morgan
As a result of these concerns, the federal government is facing at least four lawsuits related to recent approvals of the Kinder Morgan Trans Mountain expansion and Enbridge Line 3 pipeline projects. Signatories to the Treaty Alliance Against the Tar Sands say the pipelines were subject to an "illegitimate review."
As TransCanada prepares a new application for the Keystone XL pipeline with President Donald Trump's approval, they have called on the federal government to deliver on its domestic and international climate targets, and promises to respect indigenous rights.
“First Nations demanded Prime Minister Trudeau live up to his oft-repeated campaign promise to not approve pipelines until the NEB was overhauled, but as we saw, Trudeau chose to merely tinker and 'modernize' the NEB only after approving the Kinder Morgan and Line 3 pipelines,” said Grand Chief Stewart Phillip, president of the Union of BC Indian Chiefs.
“It’s not surprising to First Nations that we now see Trudeau cheerleading Trump’s attempt to ram through the Keystone XL pipeline rather than honouring the Paris Agreement, the UN Declaration on the Rights of Indigenous Peoples and the 94 Calls to Action of the Truth and Reconciliation Commission. Totally bogus!”
At least one environmentalist also accused the government of allowing a double standard on pipeline reviews.
According to the NEB, the ticking clock on the Energy East pipeline has been stalled for now, and the time limit for approval will only restart once the new panel determines TransCanada's application is complete.
— Editor's Note: This story will be updated throughout the day as more information becomes available.