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Canadian unity on the line Quebec stirs up political squabble by seeking to force TransCanada to participate in provincial environmental review of Energy East GARY PARK For Petroleum News
More than 20 years of relative peace and quiet on Canada’s national unity front threatens to disintegrate in what is becoming a bare-knuckles brawl over TransCanada’s Energy East pipeline.
The latest addition to a succession of disputes between Quebec and Western Canada - Canada’s two most separatist-minded regions - over the C$15.7 billion project erupted when the Quebec government filed a motion for a court injunction to force TransCanada to participate in a provincial environmental impact assessment.
“So far TransCanada has refused to comply” with letters sent to the company in late 2014, said Quebec Environment Minister David Heurtel.
“It’s not that we’re trying to block the project. Quebec in no way with this announcement is saying it is for or against the project. We just want our laws to be respected.”
The bid for an injunction came less than a week before Quebec’s environmental regulation agency, BAPE, started hearings on March 7, adding to doubts over Quebec’s intentions.
A TransCanada spokesman said his company was “perplexed” by the motion because of its understanding that the public hearings would meet Quebec’s request for ample information on the environmental safety provisions for Energy East.
Feedstock for refineries The pipeline is designed to carry 1.1 million barrels per day of crude from Alberta and Saskatchewan as feedstock for Quebec’s two refineries, partly to reduce 730,000 bpd of oil imported from the United States, the North Sea, the Middle East, Africa and Venezuela, along with opening export routes from Atlantic Canada to Europe.
The spokesman said the BAPE process will examine the project in detail, with three commissioners taking questions from the public and hearing presentations from interested groups.
“We’re going to fulsomely participate and answer all of the questions that are put forth about the project,” he said.
The BAPE findings will be submitted to Canada’s National Energy Board, which has the regulatory authority to gather opinions on the economic, safety and environmental aspects of pipelines that cross inter-provincial boundaries.
The NEB, in turn, makes recommendations to the federal cabinet which is legislated to make the final decision.
“Energy East certainly falls within the NEB’s purview,” said a spokesman for the regulator.
Political reaction Political reaction to Quebec’s filing flared immediately, led by Saskatchewan Premier Brad Wall who said all of Canada should support a pipeline that will create thousands of jobs, reduce the need to import foreign oil and remove crude shipments from rail lines.
He issued a barely veiled threat by ordering government officials to study whether trade reprisals could be applied against Quebec.
Alberta Premier Rachel Notley started out in traditional western style, saying she was set to come out with “guns blazing” in response to the Quebec filing before softening her stand.
“But I’m going to leave the gun in the holster until we’re actually in a gunfight,” she told reporters, adding she had been assured that Quebec wants only to embark on a parallel process that would not interfere with the Canadian government’s final decision on the pipeline.
Federal jurisdiction cited Notley and pipeline allies say they don’t want Quebec to use its environmental review process to wander into an area of federal jurisdiction which a 2010 ruling by the Supreme Court of Canada upheld.
She observed that the federal government plays the lead role in passing the final judgment on inter-provincial infrastructure projects.
Energy East is “this century’s railway in Canada. If we are going to build this country we must get a pipeline to tidewater. We just need to grow up and ensure that we act like 21st Century energy producers,” Notley said.
The court reiterated a principle that prevents provincial governments from adopting laws that interfere with a “vital part” of interprovincial pipelines.
“A provincial law that makes an interprovincial pipeline practically impossible to construct would likely affect a ‘vital’ part of it,” a legal research note has concluded. “If the provincial law were challenged on that basis, a court would likely rule that the law did not apply to the pipeline.”
But University of Alberta political scientist Julian Castro-Rea said the NEB should be wary of making decisions that challenge provincial concerns.
He said an NEB decision “might be legal from a technical point of view, but it would be illegitimate because there would be opposition from a provincial government.”
Castro-Rea said the confrontation is ideological because of the priority that conservative politicians give to economic growth as much as it is environmental.
Tensions already high Tensions over the pipeline were already high from opposition that forced TransCanada to abandon plans for a crude export terminal on the St. Lawrence River because of concerns about the threat to beluga whales and a declaration this year by mayors of 82 municipalities in the Metropolitan Montreal region that the environmental risks posed by Energy East far outweighed the economic benefits.
Saskatchewan Premier Brad Wall was less inclined to accept Quebec’s assurances that it has no intention of interfering with the regulatory process in place for Energy East.
He questioned whether Quebec is using the opportunity to claim the high ground by introducing tough climate change legislation while ignoring the fact that Canada accounts for only 1.6 percent of global greenhouse gas emissions.
Wall said all of Canada should be supporting Energy East as a source of jobs, a means of reducing crude imports and a way to get dangerous crudes off railways.
He suggested that Canada should conduct economic-impact assessments on energy projects and not just limit itself to environmental-impact assessments.
Alberta opposition Opposition leaders in Alberta slammed Notley for not reacting more strongly and not emphasizing the importance of the pipeline.
Wildrose Leader Brian Jean said “we are frustrated as many Albertans are at being treated as the piñata” of the Canadian Confederation.
“Provinces need to stop holding our energy sector hostage,” he said, suggesting Quebec should return C$10 billion in equalization it received when Alberta was enjoying a prolonged period of budget surpluses and “explain why they prefer Saudi Arabian and Nigerian oil over Canadian oil” to fuel the province’s refineries.
Progressive Conservative Leader Ric McIver said he was “extremely disappointed” Quebec was taking legal steps to block a pipeline that would generate economic benefits for all of Canada.
“The Quebec government has been more than happy to benefit from Alberta’s prosperity in the past and now that the tables have turned and it’s Alberta that needs support that help is nowhere to be found,” he said.
Liberal Leader David Swann said that although he respected Notley for “not inflaming tensions ... the fact remains that Quebec appears to be preparing to fight the approval of Energy East.”
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