The Real Problem Behind Pipeline Approvals: How Trans Mountain Was Overturned – David Yager

By David Yager
Energy Policy Analyst – Oil & Gas Writer

“Canadians must be able to trust that government will engage in appropriate regulatory oversight, including credible environmental assessments, and that it will respect the rights of those most affected, such as Indigenous communities. While governments grant permits for resource development, only communities can grant permission. We will make environmental assessments credible again.”

Pass the Kleenex. These stirring words are extracted from the Liberal Party of Canada platform for the October 2015 election. In 2012 and 2013 there had been fierce opposition to the Northern Gateway pipeline during the NEB hearings. Over 4,000 people demanded intervenor status, many from central Canada and the U.S. Concerned about interference from outside the country, in 2013 Ottawa changed the NEB rules so only those directly affected could participate. Following approval by the NEB, the Northern Gateway decision was ratified by Stephen Harper’s Conservative government in 2014. Pipeline opponents promised to fight on and launched a legal challenge in the Federal Court of Appeal.

Seeking more votes, Justin Trudeau piled on with more promises. In Vancouver on September 10, 2015, Trudeau publicly promised an oil tanker ban off B.C.’s Northern coast. Canadian Press reported, “…the Liberals would place a moratorium on oil tanker traffic along the northern coast of British Columbia. The move would effectively kill any pipeline projects through the area — including the controversial Northern Gateway pipeline that Liberal Leader Justin Trudeau opposes…”

Trudeau and the Liberals won the election. The Federal Court of Appeal overturned the Northern Gateway decision the following June citing inadequate Indigenous consultation as required in the Constitution. In late 2016 Trudeau approved the Trans Mountain expansion, killed Northern Gateway for good and promised legislation to enshrine his oil tanker ban. The federal Liberal and Alberta NDP governments triumphantly bragged how their progressive approach had gotten an oil export pipeline approved where the knuckle dragging, consultation-hating Conservatives had failed.

The good news didn’t last long. The NDP won the 2017 B.C. election and vowed to block Trans Mountain by any means possible. Ottawa introduced Bill C-69 to completely restructure the NEB and the energy infrastructure application and approval process. Industry was mortified. Kinder Morgan set a hard deadline. Ottawa bought the pipeline to save it. Alberta Premier Notley staged multiple photo ops of shovels in the ground showing pipeline construction activity, at least on TV. Harper’s incompetence was raised at every possible opportunity.

Then the bomb dropped. On August 30 the Federal Court of Appeal rejected Trans Mountain because, in part, of inadequate Indigenous consultation. The Prime Minister responded with – get this – “We need to be able to build resource projects with all different types with appropriate social license”. He added, “The Keystone XL pipeline has been approved in Canada for a long time and it’s bogged down in processes in the United States because, again, there are concerns that they hadn’t done enough around consultation in partnership with communities and environmental science”.

Now you know. The only obstacles to securing pipeline approval is having the right people ask the right questions the right way. There is no aspect of this problem that cannot be resolved with more talking, more consultation, more input, more transparency, more soothing words and, in Canada, more Liberal government. Everything else is Harper’s fault.

Except three years ago Trudeau promised the country he would solve this problem. Three years later he is back to square zero. Two pipelines are dead – Northern Gateway and Energy East – and Trans Mountain is uncertain. Bill C-69 has cleared the House of Commons and is now before the Senate. Anybody who knows anything about pipeline applications and hearings is terrified because C-69 will enshrine even more power in the hands of the federal cabinet, the same cabinet which assured voters in 2015 this problem would be solved by now.

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In 2008 a U.S. ENGO (Environmental Non-Government Organization) called Corporate Ethics authored a position paper titled “The Tar Sands Campaign 2.1”. It was clear after the incredible success of Al Gore’s 2006 movie An Inconvenient Truth – which won both a Nobel prize and an Academy Award in 2007 – the future for the American environment movement and the next big crusade was opposing fossil fuels because they cause climate change.

While somewhat loose with the facts (there is still snow on Mount Kilimanjaro), An Inconvenient Truth was widely credited with moving the climate change issue from scientists, diplomats and politicians into the public arena. Because of its international accolades, teachers across North America began showing the video in their classrooms. Often it was their first introduction to climate change. Scenes of devastation like 2005’s Hurricane Katrina made the movie a crossover between a documentary and an action video.

If you wonder why an entire generation thinks what it does about climate change, thank Al Gore, Hollywood’s Motion Picture Academy and The Nobel Foundation.

At the same time, Alberta’s rapidly-growing oil sands were gaining broad attention. In 2008 images of 1,606 dead ducks in Syncrude’s tailing pond went viral, reinforcing oil’s environmental devastation. Dirty oil from another country that would find its way to the U.S. was the perfect crusade for American ENGOs.

The document opened, “We stand at a crossroads. The path we choose may well determine the fate of the earth.” American ENGOs were enjoying reasonable success opposing coal but, “What we lack is a comparable transportation fuels campaign to address the challenges posed by this industry. Transportation contributes 25% of the annual global emissions…While non-conventional fuels, like tar sands oil from Canada, are a small percentage of the U.S. annual fuel consumption today, the percentage if projected to rise. Stopping the flow of tar sands oil now…is critical if we are to force government and industry to pursue a clean and sustainable energy future”. (italics from the document)

The position paper continued, “Why a campaign on tar sands oil?…Extraction of these ‘bottom of the barrel fuels’ is energy intensive, emits much higher greenhouse gases, and poses grave risks to air, water, land and wildlife while placing severe pressure on the health and infrastructure of communities”.

Under the heading “Theory of Change”, the strategy is outlined in detail. “The question is, ‘How in the face of nearly unlimited gas and oil industry money can we ever hope to stop tar sands production?’ We are confident that this can be accomplished through the strategy outlined below. Even in the nascent stages of this campaign, we have seen the power of raising the visibility of tar sands negatives, educating the public, and legal challenges. (italics by the writer)

What gives us additional optimism is the following:

• The potential to break the chain for delivery of vital inputs to tar sands operations
• The legal potential to block vital links in the tar sands oil delivery infrastructure
• The potential costs to the industry associated with mitigation and legal fights
• The fact that Barack Obama, the potential next President, has criticized tar sands oil
• The growing potential for national carbon legislation that pre-empts tar sands oil”

American ENGOs were smarter in 2008 than Canadian politicians ten years later. They recognized the “legal potential to block vital links in the oil sands delivery infrastructure”. That’s how the Trans Mountain approval was overturned. West Coast researcher and writer Vivian Krause has done a remarkable job following the money from the formation and funding of the first anti-oil sands strategy in 2008 right through to the various Canadian pipeline and oil sands opponents including ENGOs and First Nations. Although there may be no direct linkage between foreign ENGOs the most recent court challenge, there is no doubt these groups have busy in Canada for many years fulfilling their stated mandate and executing a multi-year plan.

U.S. ENGOs are specialists in the carbon catastrophe industry. They don’t care about the Canadian political preoccupation with “social license” or the Liberal policy embracement of “only communities can grant permission”. Their stated purpose is to block oil sands development and export pipelines. Period. That’s how they raise money to funds operations. The Canadian spirit of compromise after people have had their say about a subject does not exist in the American legal system. After 250 years of legal interpretation of the U.S. constitution, Americans have learned to pay more attention to the judges in the Supreme Court and how they might interpret a few words than what the public thinks.

Today a rebranded CorpEthics calls itself “Strategic Advisors to Environmental Campaigns” and advertises the “The Tar Sands Campaign” as one of its great successes. Its website reads, “From the very beginning, the campaign strategy was to land-lock the tar sands so their crude could not reach the international markets where it could fetch a high price per barrel. This meant national and grassroots organizing to block all proposed pipelines…The Tar Sands Campaign jump-started the climate movement in the U.S. as major political figures, celebrities, and a diverse range of NGOs came together to get the Administration to block this (Keystone XL) pipeline. It also played a major role to unseat the Conservative Party in Alberta and nationally”.

Who is pulling Justin Trudeau and Rachel Notley’s strings? Why are we still having the political theatre of public hearings into important economic infrastructure when it is known how the process has been manipulated and hijacked?

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Politicians love regulatory hearings. This is how to move controversial industrial development along without having to take a position that might cost votes. There is no better example than the Critical Sour Gas regulations after the disastrous Lodgepole blowout of 1982 spewed poisonous hydrogen sulphide (H2S) gas in quantities which at one point spoiled the air in Winnipeg. After two U.S. well control experts died on location and Edmonton and other communities were exposed to very irritating concentrations H2S, the rules on sour gas drilling were completely rewritten.

A “critical” sour gas well was defined as one was likely to release dangerous quantities of H2S should an uncontrolled flow occur. To secure a drilling license for a critical well near people the regulator (then the ERCB, today’s AER) required public hearings. Operators had to contact everybody living near a potential release, explain the plan, and solicit public input. The regulator would look at the technical aspects of the drilling and emergency response plan, analyse the concerns of the public, and issue a final decision.

While most critical sour gas wells were eventually approved, some decisions were hardly attractive. When Compton Petroleum wanted to drill on the outskirts of Calgary, the conditions for approval were impossible. Compton was instructed to develop an emergency response plan to contact 250,000 people and help evacuate them even if most weren’t home because they were at work or school. The regulator didn’t say no, just set conditions that made proceeding economically or logistically impossible. Compton gave up.

Politicians supported the public consultation process regardless of the cost or outcome. Because in the absence of a hearing conducted by an objective and neutral technical body such as the ERCB (or NEB), a politician might have to go on the record and support something voters opposed. “Big Oil is going to drill a poison gas well very close to the school your children are attending. It should be safe. And, of course, the well is in the public interest. More royalties and taxes mean better roads, hospitals, schools and lower taxes. You have two children? Then your family’s share will be 4/4,000,000 or 1/10,000 of one per cent of the economic benefits. Is that okay with you?”

Are you nuts? Given a choice, nobody in elected office would do this. This was clearly a job for the regulator. And as the pipeline approval process has demonstrated, the problem is clear. There is the macro-benefit of oil and gas development infrastructure – the national interest as the NEB has always been instructed to determine – versus the micro-liability of having the pipeline in your yard, community or province. Or having more oil tankers in your coastal waters, not far away like the St. Lawrence River or the Gulf of Mexico.

Alberta’s Critical Sour Gas process succeeded because when those who opposed drilling lost the argument, they rarely went to the next step. They didn’t have the time, money or legal expertise. There were no ENGOs to provide cash and counselling. When people did go to court they usually lost. Because unlike Indigenous peoples, their rights were not enshrined in the Constitution.

The problem with pipelines is not the pipe or the contents. It is the fact you must conduct a public hearing and ask people what they think. Imagine if the law required public hearings today into the construction of the Canadian Pacific Railroad on the Trans Canada Highway. Today the CPR main line runs right through downtown Calgary carrying rail cars full of unknown product. Any toxic or flammable cargo? You don’t get to ask, and the railroad doesn’t have to tell you. The railway goes right through the center of every major community in the country. That’s how Canada was settled and built. Ask the people of Lac Megantic where they want the rail line.

Any major infrastructure project approved today would be impossible if it required public hearings to get a “social license” or “permission” from the affected community. This problem will not go away until either the process is changed, the law is changed, or both.

It will also require real political leadership, elected officials willing to take a position that is certain to cost them at least some votes. Don’t hold your breath.

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Three thoughtful people have proposed solutions. All require politicians to make tough decisions in the national interest.

Senator Doug Black figures the Liberals should enact Bill S-245, legislation he has proposed to declare Trans Mountain “for the general advantage of Canada”. Called the Trans Mountain Pipeline Project Act, it would use a section of the Constitution to expropriate the pipeline corridor thus allowing the federal government to overrule municipal and provincial laws and regulations. Various versions of Ottawa stepping up and using its legislative authority to push the project through have been proposed in the past. In the meantime, Black is urging Ottawa to order the NEB to provide interim construction permits which the federal government reviews its various legal options.

Calgary political scientist Tom Flanagan believes the federal parliament can solve the problem should it muster the political will. Writing in The Globe and Mail on September 10, Flanagan stated, “What has happened to Trans Mountain is not surprising. This is the third time in 12 years that the Federal Court has blocked a major pipeline proposal on grounds of insufficient consultation…” Mackenzie Valley in 2006, Northern Gateway in 2016, and Trans Mountain in 2018.

Flanagan wrote, “In each case, the proposal was backed by many First Nations and Metis organizations, but a small number of First Nations (six, in the case of Trans Mountain) was able to get a court to rule that some phase of the consultation had been inadequate”.

Although the problem keeps recurring, Flanagan said nothing has changed. “…Parliament has passed no legislation to better define the duty to consult. In this legislative vacuum, the courts act the only way they can, reviewing specific cased retrospectively…It is a perfect environment for project opponents to conduct a kind of guerrilla warfare – something dubbed lawfare – in the courts. Months stretch into years as the courts follow their methodical process of hearings and appeal”.

Flanagan believes the original concept of enshrining Indigenous rights and ensuring consultation was to protect local communities and did not anticipate what he called “corridor projects” that involved multiple First Nations. Here only a handful of dissenters can obstruct a major project. Flanagan concluded, “…anyone with experience in human affairs knows that unanimity is rarely achieved in any endeavor.”

One can only conclude either the Prime Minister does not understand this or is so self-possessed with his personal charm and powers of influence it is only a matter of time before they agree with his position.

Except for U.S. ENGOs, which know how to extract the maximum benefit of written laws.

Flanagan’s final thoughts are not much different from Doug Black’s in that he views expropriation in the national interest as a tool Parliament can and has used. “The problem is that we have no equivalent legislation for First Nations’ property rights. Thus, even though the courts repeat that the right to be consulted does not entail a veto, the legal process as it has evolved effectively confers a veto on small numbers of holdout First Nations”.

Another way to approach the problem is to study the judges like in the U.S. Former Wildrose Party leader, MLA and MP Brian Jean, a lawyer, concluded now that Canada has a written Constitution like the U.S. it is time to pay more attention to the judges interpreting what is written.

Jean wrote in the Calgary Sun, “Reading over the decision, it forces any rational person to ask how our energy sector can possibly function in this country when over five years of consultations by the company, the regulator and the federal government can be thrown out by just one court decision, especially given each pipeline project, no matter its merits, can expect to see an endless series of court challenges as a permanent delay tactic used by opponents”.

The Trudeau government keeps trying to fix a problem with public pledges of decency, inclusion and fair play when the problem lies elsewhere.

Jean concluded, “Something is seriously broken. For some reason, in Canada judicial appointments go through without the serious scrutiny they face elsewhere. It’s time for that to change and for us to all take a much closer look at the individuals who seem to constantly rewrite the laws and the political decisions of this country with little common sense or precedent. The result has been a situation where the legislative branch of government is continuously immobilized while the power of our unaccountable judicial branch is ever-expanding”.

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It is highly unlikely the Trudeau government will undertake any major legal initiatives to fix this problem with a federal election only a year away. Legislation to force Trans Mountain through will create a backlash from oil and pipeline haters and cost votes. Amending the Constitution for this specific reason would take years and invoke another national dispute with Indigenous leaders and the myriad of organizations that feel qualified and duty bound to speak for them.

People praying for some break in the oil export logjam can only be discouraged when the Prime Minister’s only public solution is more consultation and to pass Bill C-69. This legislation gives the same cabinet which the courts have rendered powerless on multiple occasions more authority. Without rewriting the underlying rules, opponents will continue to search for ways to challenge the next decision it in the courts.

Passing Bill C-69 will change nothing. Anyone who understands the problem believes C-69 will only make a bad situation worse. It is another motherhood band-aid on a serious, festering wound.

When stuck for words and out of excuses, current governments still try to blame the problem on the Stephen Harper administration which was replaced three years ago. Nice try. The only way to place Canada’s energy future back in the hands or voters is to change the law, not rework and reword an old and broken process that is a proven failure.

On the record as opposing Northern Gateway, banning tankers, and saying Canada must “phase out” of the oil sands for the good of mankind, perhaps things are unfolding the way Trudeau secretly believes they should. And all the love for Alberta, oil sands and pipelines are the things you have to say when you’re the Prime Minister.

Meanwhile, U.S.-based CorpEthics is so proud of destroying Canada’s oil sands it brags about it.

David Yager has been writing, analyzing and commenting about the upstream oil and industry, politics and energy policy since 1979. He is currently writing a book about the future of Alberta and its carbon resource industries in the current anti-carbon era. It will be released in 2019.

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