Quebec and Ontario want to discuss Alberta emissions to approve Energy East?

By: David Yager, National Leader, Oilfield Services

MNP Oilfield Services News

We should all think our luck stars our industry got a few interprovincial oil and gas pipelines built before they became the political issue of the day. There was a time – decades ago regrettably - when people were happy to have the jobs and economic activity associated with pipeline construction. No longer.  With lots written about Keystone XL, Northern Gateway and increasingly Kinder Morgan TransMountain, it is now time to put the public and media focus on Energy East. OFS New predicts getting this pipeline approved will also not be easy. 

Energy East is the all-Canadian plan to get Alberta crude to Ontario, Quebec, New Brunswick and the Atlantic Ocean. It involves switching the flow of one of TransCanada’s underutilized legacy natural gas pipelines from gas to oil. If completed, one day the $12 billion project (today’s estimate) could carry 1.1 million barrels of day of oil to new markets. Its economic benefits to the country are huge and need not be repeated here. 

In of an NEB hearing expected to take 15 months, on November 20 Quebec and Ontario weighed in and publicly announced their list of conditions by which they would permit rampant prosperity, investment and job creation to take place within their borders. The concept of a province outlining the terms under which pipelines will be allowed to pass through their jurisdictions began in B.C. in 2012 and the Northern Gateway pipeline.

In a Calgary Herald Story on November 21, Ontario Premier Kathleen Wynn and Quebec Premier Philippe Couillard announced their “principles” for energy developing surrounding Energy East which included building, “a stronger and more competitive low-carbon economy” and that new oil pipelines must “take into account the contribution to greenhouse gas emissions”. 

The construction and operation of a pipeline has only negligible incremental GHG emissions. Therefore, this position was obviously a reference to the contents of the pipeline, meaning that Ontario and Quebec would in fact be dictating the acceptable type of industrial activity to take place in Alberta. One cannot imagine Alberta dispensing advice on how Canada’s two largest provinces should operate their economies, tempting as it might be.

What is more interesting is the comments of new NEB chair and CEO Peter Watson who clearly stated that the concerns of Ontario and Quebec about emissions are not within the NEB’s mandate. “Our job is to assess the need for new cross-border energy infrastructure and to make sure it can be constructed and operated safety in the public interest. Our job is not to conduct a referendum on society’s use of fossil fuels every time a proponent proposes to build a section of pipe”. Watson says issues like total emissions are the purview of the federal government and the province in which the emission are created.

TransCanada Corp. filed its 30,000 page application with the NEB in October. Groups like green lobbyist Environmental Defense are already are already on the record as demanding Ontario and Quebec reject the project.

Meanwhile, in B.C. another NEB approved project – Kinder Morgan’s TransMountain pipeline – is encountering continued civil disobedience as the company attempts to survey a route to the ocean through the municipality of Burnaby. Kinder Morgan recently received a court order allowing work to continue. Several protesters have been arrested. This opposition is likely to continue.