Canada is preparing to modernize the review process for energy projects such as contentious pipelines.
The aim, in part, is to restore public confidence in the National Energy Board (NEB) – a discredited regulator currently stacked with former oil and gas industry insiders, like Lyne Mercier (once with Gaz Métro) and Steven Kelly (a former Kinder Morgan advisor).
However, implementation of one key recommendation would, in my opinion, further undermine trust in decision making and mire pipeline approvals in added controversy. The recommendation is that cabinet should decide whether a major project is in "the national interest" before a detailed project review takes place.
Put simply, the pipeline industry wants the federal government to reject or approve major energy projects—like pipelines—before they’ve undergone a technical review and environmental assessment. Proponents include TransCanada, Kinder Morgan, Enbridge and the Canadian Energy Pipeline Association. Most recently, this recommendation was championed in The Financial Post in an op-ed by two former TransCanada executives.
Putting the cart before the horse
The government-appointed NEB modernization expert panel has recommended such a process to the government. The panel recommended a two-part review beginning with a one-year process to determine whether a major project is aligned with “national interest." Cabinet would make that decision, "informed by substantive Indigenous consultation and stakeholder engagement." This would take place before the detailed project review or licensing decisions.
To be fair, the report by the expert panel released last month, contains some good recommendations to improve energy regulation, project reviews, data collection and dissemination, public participation, and the regulator’s relationship with Indigenous peoples.
But the recommendation for government approval for major energy projects before a technical review and environmental assessment is way off the mark. It would only invite more distrust, controversy and political gridlock. It's a classic case of putting the cart before the horse.
Industry says this will make approvals simpler because politicians, once having decided that a project is in the national interest, would then be in a position to champion energy projects. I guess the energy industry has a short memory. The industry already tried paving the way for project approvals by convincing the previous federal government to tilt the review process in its favour, by placing severe restrictions on NEB hearings and systematically dismantling decades of environmental protection laws in 2012.
And they could have found no stronger a champion than former prime minister Stephen Harper.
A strategy that backfired
But their strategy backfired spectacularly. No new pipelines have been built and public trust in government decisions plummeted, which is why Canada’s environmental laws and processes themselves are now being overhauled.
The industry’s claim that the two-stage process would resolve pipeline gridlock and provide greater business certainty is mistaken. A project that’s green-lighted in the first stage would simply ensure that the technical review and environmental assessment become lightning rods for public discontent and political controversy. Public concerns about a project's impacts on land, water, air, communities and Indigenous rights would be unearthed during a technical review and environmental assessment. These concerns should help determine whether a project is in the public interest and inform a final government decision, NOT be raised as an afterthought following cabinet approval.
For the NEB overhaul to be meaningful, environmental impacts should be assessed by an independent impact assessment agency, as was recommended by an expert panel on the review of environmental assessment processes.
The government should put in place a proper climate test that ensures all major energy projects fit within Canada’s climate targets and make economic sense in a world that has agreed to limit global warming by a maximum two degrees Celsius. And the federal government needs to get serious about the commitment to Indigenous reconciliation.
The decision on whether a project should go forward, and whether it finds political support, should only be made once all the facts are on the table.