CALGARY — The National Energy Board (NEB) said late Wednesday it is expanding the review of the $15.7-billion proposed Energy East pipeline project to include upstream and downstream climate change impacts.
The regulator said it would also look at the market consequences of Canada’s expanding greenhouse gas (GHG) emissions reduction targets to decide whether the pipeline will be needed. Energy East would carry 1.1 million barrels of crude per day from Alberta and Saskatchewan to refineries in Eastern Canada and an export marine terminal in New Brunswick.
The decision is a win for the environmental lobby and was immediately criticized by the pipeline industry, which argued climate change belongs in the public policy arena, not regulatory reviews.
The NEB said it expanded the scope of the review of Energy East and the related Eastern Mainline projects after receiving 820 responses to its call for input, including 700 form letters.
“Given increasing public interest in GHG emissions, together with increasing governmental actions and commitments (including the federal government’s stated interest in assessing upstream GHG emissions associated with major pipelines), the Board is of the view that it should also consider indirect GHG emissions in its NEB Act public interest determination for each of the projects,” the NEB said in a letter to proponent TransCanada Corp.
The Calgary-based regulator previously excluded GHG impacts outside of those directly related to construction and operation of projects.
The original Energy East review was derailed in September 2016 after members of the regulatory panel overseeing the hearings resigned amid questions about a potential conflict of interest. Then in January, the NEB scrapped nearly two years of decisions made by the previous panel and restarted the process.
In the letter, the NEB said Canada’s GHG laws and policies are relevant to the public interest because they may have an impact on existing and potential markets and the availability of oil and gas to the proposed pipelines.
“This decision culminates years of work by countless individuals and groups that have fought against blinkered, siloed regulatory reviews that only pass the buck on climate change,” Charles Hatt, a lawyer for Ecojustice, said in a statement.
“Surely it is now self-evident that a pipeline review must consider all potential greenhouse gas emissions and the risk that the pipeline will become a stranded asset in tomorrow’s economy.”
Also in a statement, the Canadian Energy Pipeline Association (CEPA) said it does not support the NEB ruling.
“CEPA firmly believes that broad public policy issues, such as climate change, should be addressed at the political level, and not through pipeline project reviews,” the group said.
In addition, the NEB said it would put more focus on the risks of potential accidents and system malfunctions that could lead to an oil spill into the environment.
“The assessment will provide more visibility to the evaluation of such scenarios, their potential consequences, the proposed mitigation and response measures, as well as the preventative programs aimed at reducing or eliminating risk factors,” it said.
TransCanada spokesman Tim Duboyce said his company would review the NEB’s announcement before assessing how the project might be impacted.
The regulator’s next step is to schedule new hearings. The Energy East review is taking place as the federal government considers an overhaul of the regulator, including splitting it into two agencies and moving parts of its work to Ottawa.