Northern Gateway pipelines says the company will not appeal the Federal Court of Appeal decision that blocked the approval certificate by the Joint Review Panel and the National Energy Board because there had been insufficient consultation with First Nations.
OTTAWA — The federal government is joining Enbridge Inc. in not appealing a Federal Court of Appeal ruling quashing a 2014 Conservative decision to approve the $7.9 billion Northern Gateway pipeline, Postmedia has learned.
John Carruthers, President of Northern Gateway said in a news release, “We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process.”
Northern Gateway news release
VANCOUVER, Sept. 20, 2016 /CNW/ – Northern Gateway will not appeal a recent Federal Court of Appeal decision that reversed the project’s federal approval certificate. The Federal Court of Appeal found that the National Energy Board’s Joint Review Panel recommendation was acceptable and defensible on the facts and the law. The Court, however, concluded that further Crown consultation is required.
Northern Gateway supports the path outlined by the Federal Court of Appeal for the Federal Government to re-engage with directly affected First Nations and Métis communities to ensure thorough consultation on Northern Gateway is undertaken.
Statement from John Carruthers, President, Northern Gateway:
“We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process. We believe the government has a responsibility to meet their Constitutional legal obligations to meaningfully consult with First Nation and Métis. It also reflects the first priority of Northern Gateway and the 31 Aboriginal Equity Partners to build meaningful relationships with First Nation and Métis communities and ensure their voice is reflected in the design of the project.
We believe that projects like ours should be built with First Nation and Métis environmental stewardship, ownership, support, and shared control. Northern Gateway, the Aboriginal Equity Partners, and our commercial project proponents remain fully committed to building this critical Canadian infrastructure project while at the same time protecting the environment and the traditional way of life of First Nation and Métis and communities along the project route.
In order to encourage investment and economic development, Canadians need certainty that the government will fully and properly consult with our nation’s Indigenous communities. We look forward to this process and assisting those communities and the Federal Government with this important undertaking in any way we can.
The economic benefits from Northern Gateway to First Nation and Métis communities are unprecedented in Canadian history. As part of the opportunity to share up to 33 percent ownership and control in a major Canadian energy infrastructure project, the project’s Aboriginal Equity Partners will also receive $2 billion in long-term economic, business, and education opportunities for their communities.
The project would add over $300 billion to Canada’s gross domestic product over the next 30 years, 4,000 construction jobs and 1,000 long-term jobs, $98 billion in tax revenue, and an estimated $100 million investment in community programs and services. Northern Gateway will provide a badly needed multibillion dollar private infrastructure investment in Canada’s future.”
Statement from the Aboriginal Equity Partner Stewards (Bruce Dumont, President, Métis Nation British Columbia; David MacPhee, President, Aseniwuche Winewak Nation; Chief Elmer Derrick, Gitxsan Nation Hereditary Chief; Elmer Ghostkeeper, Buffalo Lake Métis Settlement):
“We support Northern Gateway’s decision to not appeal the recent decision by the Federal Court of Appeal. This is a reflection of the commitment to the new partnership we are building together and their support of meeting Constitutional obligations on government to consult.
The Federal government has publically stated they are committed to reconciliation with First Nation and Métis communities. As such, we are now calling on this same government to actively and fully undertake the required consultation as directed by the Federal Court of Appeal in relation to the Northern Gateway project.
The Aboriginal Equity Partners is a unique and historic partnership that establishes a new model for conducting natural resource development on our lands and traditional territories. We are owners of Northern Gateway and are participating in the project as equals.
Environmental protection remains paramount and as stewards of the land and water, and as partners in this project, First Nation and Métis communities have a direct role in the environmental protection of the lands, waters, and food sources along the pipeline corridor and in marine operations. Our traditional knowledge, science, and values will be used to design and operate land and coastal emergency response to make the project better. We believe with this project there is an opportunity to work together with the Federal Government to improve marine safety for all who live, work, and depend on Canada’s western coastal waters.
This ownership ensures environmental stewardship, shared control, and negotiated business and employment benefits. Collectively, our communities stand to benefit from more than $2 billion directly from this Project.
Our communities need the economic and business benefits that Northern Gateway can bring. We are focused on ensuring our communities benefit from this project and are actively involved in its decision making so we can protect both the environment and our traditional way of life through direct environmental stewardship and monitoring.
Our goal is for Northern Gateway to help our young people to have a future where they can stay in their communities with training and work opportunities. We remain committed to Northern Gateway and the opportunities and responsibilities that come with our ownership. We also remain committed to working with our partners to ensure our environment is protected for future generations.”
In a two to one decision, the Federal Court of Appeal has overturned the Harper government’s approval of the Enbridge Northern Gateway Pipeline, finding that the federal government’s consultation process with First Nations on the BC coast that occurred after the NEB decision and the Joint Review Panel Report was inadequate, saying:
We conclude that Canada offered only a brief, hurried and inadequate opportunity in Phase IV—a critical part of Canada’s consultation framework—to exchange and discuss information and to dialogue. The inadequacies—more than just a handful and more than mere imperfections—left entire subjects of central interest to the affected First Nations, sometimes subjects affecting their subsistence and well-being, entirely ignored.
The dissenting judge found that the federal government under Stephen Harper had adequately consulted the First Nations. The split decision means that one of the parties, either the federal government, Enbridge Northern Gateway or the Canadian Association of Petroleum Producers may seek leave to appeal to the Supreme Court of Canada.
Court challenges and rising costs will stall the Northern Gateway project for most of 2015, Enbridge says in its Fourth Quarter (2014) Strategic Update, released Friday. That means if the Northern Gatway project actually goes ahead, the company now says it will not be completed until at least 2020 or 2021.
The strategic planning report also contains cryptic references that Enbridge may be planning a second pipeline project to the “west coast” possibly to carry LNG, that could also be completed by 2020 or 2021.
Editor’s Note: Some readers have pointed out that the obscure reference to the second pipeline to the west coast might also refer to the proposed twinning of the Kinder Morgan pipeline to the Lower Mainland.
Enbridge executives made no direct references to Northern Gateway during the conference call marking the release of the company’s 2014 results, nor did financial analysts nor media participants ask any questions about the Northern Gateway, an indication, that for now, the controversial project has dropped off the media and financial radar.
As for a possible new Enbridge pipeline to the British Columbia coast, the strategic planning report notes:
Based on the prospect for higher global LNG demand, the large resource base in western Canada and the changing North American natural gas flow patterns discussed above, there is an increasing probability that additional projects to export LNG from the continental United States or potentially off the west Coast of Canada will proceed. However, a sustained period of low crude oil prices or other changes in global supply and demand for natural gas could delay such opportunities.
Then in the conference call, Guy Jarvis, Enbridge president of Liquids Pipelines, made this reference to a slide that projected Enbridge’s future earnings.
In our base case, which is the green line and which we discussed at Enbridge Day, Keystone XL is in service in 2019 and Energy East plus one of the two West Coast projects is in service in 2020. In this scenario, we are currently chockablock full and we remain full as we bring on the two faces of Alberta Clipper expansion capacity and as we squeeze the last bit of capacity availability out of our system leaving about 200,000 barrels a day of capacity that we can’t get at due to upstream bottlenecks and crude slate versus line allocations.
So that means Enbridge expects one of two West Coast projects to be online by 2020. One, of course, is Nothern Gateway, the second, perhaps a LNG project now on the drawing boards in Edmonton. If, however, the reference is to Kinder Morgan, that too may be delayed by opposition to that project. Sources indicate that pipeline companies often have various scenarios and plans on backburners that may be activated if market conditions are favourable.
As for Northern Gateway itself, Enbridge’s report on the project is buried deep in the strategic review, after almost every other project and pipeline the company is working on.
Enbridge begins by noting the history of the twin 1,177-kilometre (731-mile) pipeline system from near Edmonton, Alberta to a new marine terminal in Kitimat, British Columbia. It then mentions the pipline would carry “crude oil for export” from the Edmonton area to Kitimat, fudging that the pipeline would actually carry diluted bitumen. The other pipeline would carry natural gas based condensate back to the oil sands. On June 17, 2014, the federal government approved the Northern Gateway project subject to the 209 conditions imposed by the Joint Review Panel six months earlier.
First Nations and enviromental groups then filed court challenges to the project.
The report notes that on December 17, 2014, the Federal Court of Canada consolidated all the challenges to Northern Gateway in a single proceeding.
Those challenging the Northern Gateway have until May 22, 2015 to file with the Federal Court the Appellants’ Memoranda of Fact and Law.
Northern Gateway must respond with a Respondents’ Memoranda by June 5, 2015.
The company says the Federal Court hearing will open sometime in the fall of 2015, with a decision possibly late in 2015. Enbridge expects either one side or the other to seek Leave to Appeal to the Supreme Court of Canada which could delay the project into 2016 or 2017.
The report says that in October, 2014, Enbridge began reviewing its cost estimate for Northern Gateway, “based on full engineering analysis of the pipeline route and terminal location.” Now the companys says “the final cost of the project will be substantially higher than the preliminary cost figures included in the Northern Gateway filing with the JRP, which reflected a preliminary estimate prepared in 2004 and escalated to 2010.”
What is raising the cost of Northern Gateway include “significant costs associated with escalation of labour and construction costs” probably due to LNG other projects, as well as satisfying the JRP’s 209 conditions. It appears also that Enbridge is finally actually looking at the costs of building the pipeline over BC’s rugged terrain, “a larger portion of high cost pipeline terrain, more extensive terminal site rock excavations and a delayed anticipated in-service date.”
Enbridge adds: “The updated cost estimate is currently being assessed and refined by Northern Gateway and the potential shippers.”
It may be that Northern Gatway’s future is becoming more precarious, especially with the collapse in world oil prices.
Enbridge notes: “Subject to continued commercial support, receipt of regulatory and other approvals and adequately addressing landowner and local community concerns (including those of Aboriginal communities), the Company now estimates that Northern Gateway could be in service in 2019 at the earliest. The timing and outcome of judicial reviews could also impact the start of construction or other project activities, which may lead to a delay in the start of operations beyond the current forecast.” (The 2020 or 2021 figure came from the conference call and slide presentation, not the strategic report)
Given the many uncertainties surrounding Northern Gateway, including final ownership structure, the potential financial impact of the project cannot be determined at this time.
The Joint Review Panel certificate granting Enbridge permission to proceed expires, under Condition 2, on December 31, 2016. Under Condition 187, Northern Gateway must assure the JRP and National Energy Board that it has sufficient financial resources to both build the project and to implement all the safety and environmental conditions imposed by the JRP and accepted by Stephen Harper’s cabinet when it approved the project.
Enbridge Northern Gateway officials are loath (to put it mildly) to speak to the media but sometimes they let things slip. Earlier this summer, at a social event, I heard an Enbridge official (probably inadvertently) reveal that when the company’s engineers came before District of Kitimat Council earlier this year they were surprised and somewhat unprepared to fully answer the detailed technical questions from Councillor Phil Germuth on pipeline leak detection.
The results of the municipal election in Kitimat, and elsewhere across BC show one clear message; voters do want industrial development in their communities, but not at any price. Communities are no longer prepared to be drive by casualties for giant corporations on their road to shareholder value.
The federal Conservatives and the BC provincial Liberals have, up until now, successfully used the “all or nothing thinking” argument. That argument is: You either accept everything a project proponent wants, whether in the mining or energy sectors, or you are against all development. Psychologists will tell you that “all or nothing thinking” only leads to personal defeat and depression. In politics, especially in an age of attack ads and polarization, the all or nothing thinking strategy often works. Saturday’s results, however, show that at least at the municipal level, the all or nothing argument is a political loser. Where “all politics is local” the majority of people are aware of the details of the issues and reject black and white thinking.
The Enbridge official went on to say that for their company observers, Germuth’s questions were a “what the…..” moment. As in “what the …..” is this small town councillor doing challenging our expertise?
But then Enbridge (and the other pipeline companies) have always tended to under estimate the intelligence of people who live along the route of proposed projects whether in British Columbia or elsewhere in North America, preferring to either ignore or demonize opponents and to lump skeptics into the opponent camp. The Northern Gateway Joint Review Panel also lost credibility when it accepted most of Northern Gateway’s arguments at face value while saying “what the ……” do these amateurs living along the pipeline route know?
“I am pro-development,” Germuth proclaimed to reporters in Kitimat on Saturday night after his landslide victory in his campaign for mayor.
On the issue of leak detection, over a period of two years, Germuth did his homework, checked his facts and looked for the best technology on leak detection for pipelines. That’s a crucial issue here where pipelines cross hundreds of kilometres of wilderness and there just aren’t the people around to notice something is amiss (as the people of Marshall, Michigan wondered at the time of the Line 6B breach back in 2010). Enbridge should have been prepared; Germuth first raised public questions about leak detection at a public forum in August 2012. In February 2014, after another eighteen months of research, he was ready to cross-examine, as much as possible under council rules of procedure. Enbridge fumbled the answers.
So that’s the kind of politician that will be mayor of Kitimat for the next four years, technically astute, pro-development but skeptical of corporate promises and determined to protect the environment.
Across the province, despite obstacles to opposition set up by the federal and provincial governments, proponents are now in for a tougher time (something that some companies will actually welcome since it raises the standards for development).
We see similar results in key votes in British Columbia. In Vancouver, Gregor Roberston, despite some problems with policies in some neighborhoods, won re-election on his green and anti-tankers platform. In Burnaby, Derek Corrigan handily won re-election and has already repeated his determination to stop the twinning of the Kinder Morgan pipeline through his town. In Prince Rupert, Lee Brain defeated incumbent Jack Musselman. Brain, who has on the ground experience working at an oil refinery in India, supports LNG development but has also been vocal in his opposition to Northern Gateway.
The new mayor in Terrace Carol Leclerc is an unknown factor, a former candidate for the BC Liberal party, who campaigned mainly on local issues. In the Terrace debate she refused to be pinned down on whether or not she supported Northern Gateway, saying, “Do I see Enbridge going ahead? Not a hope,” but later adding, “I’d go with a pipeline before I’d go with a rail car.”
Kitimat’s mayor and council elections also confirm that Northern Gateway plebiscite vote last April. Kitimat wants industrial development but not at the price of the community and the environment. The unofficial pro-development slate lost. A last minute attempt to smear Germuth on social media was quickly shot down by people from all sides of the Kitimat debate. Smears don’t usually work in small towns where everyone knows everyone.
Larry Walker, an environmentalist with a track record in municipal politics as an alderman in Spruce Grove, Alberta, won a seat. Together with Rob Goffinet and Germuth, that is three solid votes for the environment. The other new councillor is Claire Rattee who will be one to watch. Will the rookie be the swing vote as Corinne Scott was?
Mario Feldhoff who came to third to Goffinet in the overall vote (Edwin Empinado was second) is a solid councillor with a strong reputation for doing his homework and attention to detail and the unofficial leader of the side more inclined to support development. Feldhoff got votes from all sides in the community.
During the debates, Feldhoff repeated his position that he supports David Black’s Kitimat Clean refinery. But as an accountant, Feldhoff will have to realize that Black’s plan, which many commentators say was economically doubtful with oil at $110 a barrel, is impractical with oil at $78 a barrel for Brent Crude and expected to fall farther. Any idea of a refinery bringing jobs to Kitimat will have to be put on hold for now.
LNG projects are also dependent on the volatility and uncertainty in the marketplace. The companies involved keep postponing the all important Final Investment Decisions.
There are also Kitimat specific issues to deal with. What happens to the airshed, now and in the future? Access to the ocean remains a big issue. RTA’s gift of land on Minette Bay is a step in the right direction, but while estuary land is great for camping, canoeing and nature lovers, it is not a beach. There is still the need for a well-managed marina and boat launch that will be open and available to everyone in the valley.
Germuth will have to unite a sometimes contentious council to ensure Kitimat’s future prosperity without giving up the skepticism necessary when corporations sit on a table facing council on a Monday night, trying to sell their latest projects. That all means that Germuth has his job cut out for him over the next four years.
The Haisla Nation’s plan for entering the LNG business is based on the idea that “it is anticipated that the Haisla Projects will be developed using a business model based on controlling two components of the value chain: land and pipeline capacity” according to its application to the National Energy Board for a natural gas export licence.
Cedar LNG Development Ltd., owned by the Haisla Nation, filed three requests for export licences with the NEB on August 28, under the names Cedar 1 LNG, Cedar 2 LNG and Cedar 3 LNG. Another name used in the application is the “Haisla Projects.”
The 25-year export licence request is standard in the LNG business; it allows export of natural gas in excess of projected North American requirements. Thus like the NEB hearings for the Kitimat LNG and LNG Canada projects it is not what is called a “facility” licence which is what Enbridge Northern Gateway requested.
The project anticipates six “jetties” that would load LNG into either barges or ships at three points along Douglas Channel, one where the present and financially troubled BC LNG/Douglas Channel Partners project would be.
A second would be beside the BC LNG project, which may refer to the Triton project proposed by Pacific Northern Gas parent company Altagas.
Both are on land now owned by the Haisla Nation in “fee simple” land ownership under Canadian law.
The other four would be on land surrounding the current Chevron-led Kitimat LNG project along Douglas Channel and in the mountains overlooking Bish Cove which the Haisla have leased.
The move last week and the revelation of the Haisla’s plans for the land are a cumulation of Haisla Nation Chief Counsellor Ellis Ross’s idea of restoring more of the First Nation’s traditional territory by buying or leasing the land using standard Canadian land law and at the same time getting around some of the more restrictive provisions of the Indian Act that apply to reserve land.
Just how the Haisla will go into the pipeline business is not as clear as the First Nation’s acquisition of the land. The application says:
The pipeline capacity required to transport sourced LNG to the Haisla Projects will include a mix of new and existing pipeline and infrastructure. The Haisla are in the advanced stages of negotiating and drafting definitive agreements with the major gas producers and pipeline transmission companies located in the vicinity with respect to securing pipeline capacity. It is expected that the Haisla Projects will rely on the Haisla’s business partners or customers to source gas from their own reserves and the market.
With the Haisla basing their business strategy on land and pipelines, the First Nation’s strategy is looking for flexibility in what is a volatile and uncertain market for LNG.
The application says the Haisla “are currently in advanced stage discussions and negotiations with a number of investors, gas producers, LNG purchasers, pipeline transmission companies, technology providers and shippers. As such, the particular business models have yet to be finalized. However, it is anticipated that between the various Haisla Projects, multiple export arrangements may be utilized.”
As part of the idea of flexibility, the actual LNG infrastructure will be constructed and operated with potential partners. That is why there are three separate applications so that each “application will represent a separate project with independent commercial dealings with investors, gas producers, LNG purchasers, pipeline transmission companies, technology providers and shippers.”
The Haisla say that they are “working with a number of entities to develop business structures and partnerships to provide transaction flexibility, adequate financing, modern technology, local knowledge, and marketing expertise specific to Asian targets. The separate projects will accommodate expected production and demand and will also allow for a number of midlevel organizations to be involved with the various projects as well as traditional major gas producers and LNG purchasers.”
The Haisla are working with the Norwegian Golar LNG which had been involved in the stalled BC LNG project, using a Golar LNG’s vessels and technology, using a new design that is now being built in Singapore by Keppel Shipyard.
The filing says the project will “be developed using either barge-based or converted Moss-style FLNG vessels. The terminals will consist of vessel-based liquefaction and processing facilities, vessel-based storage tanks, and facilities to support ship berthing and cargo loading”
The jetties to be used for the Haisla Projects may be either individual FLNG vessels or “double stacked”, meaning that the FLNG vessels are moored side-by-side at a single jetty. The Haisla have conducted various jetty design work and site /evaluation studies with Moffat and Nichol.
The Haisla Projects anticipate that the construction will be in 2017 to 2020, “subject to receiving all necessary permits and approvals” and is expected to continue for a term of up to twenty five years. There is one warning, “The timelines of the Haisla Projects will also depend on the contracts and relationships between the Applicant and its partners.”
The filing goes on to say:
Haisla Nation Council and its Economic Development Committee are committed to furthering economic development for the Haisla. The Haisla’s business philosophy is to advance commercially successful initiatives and to promote environmentally responsible and sustainable development, while minimizing impacts on land and water resources, partnering with First Nations and non-First Nations persons, working with joint venture business partners, and promoting and facilitating long-term development opportunities.
The Haisla Applications will allow the Haisla to be directly involved as participants in Canada’s LNG industry, rather than having only royalty or indirect interests. The Kitimat LNG and LNG Canada projects, and the associated Pacific Trails Pipeline and Coastal Gas Link Pipeline, have increased economic opportunities in the region and the Haisla are very supportive of these projects locating within the traditional territory of the Haisla. The support of the Haisla for these two projects reflects a critical evolution of the Haisla’s economic and social objectives.
The Haisla Nation have filed an application with the National Energy Board for their own liquified natural gas export project, according to industry newsletters.
There is nothing at this point in the public section of the NEB website, probably due to the holiday weekend. Northwest Coast Energy News is contacting Haisla leaders for confirmation.
According to both the Daily Oil Bulletin and Natural Gas Intelligence the Haisla have formed three companies, Cedar 1 LNG Export, Cedar 2 LNG Export and Cedar 3 LNG Export, and have applied to the NEB for three standard 25 year export licences.
According to Natural Gas Intelligence:
The filings with the National Energy Board (NEB) envision construction starting in 2017-2020 of a network of six jetties or docks jutting out from Haisla land on the shore of Douglas Channel for floating LNG vessels. Each requested export license would enable operations by two jetties.
The plan calls for a mini-armada of six mobile processing plants, with each one capable of converting up to 400 MMcf/d of gas into liquid cargo for overseas deliveries.
Work is under way with international tanker firm Golar LNG to commission construction of the vessels in Singapore at the Keppel Shipyard, according to the applications.
With the project still in planning stages, Cedar LNG did not disclose cost estimates. Names of prospective partners in the terminals; Asian customers, BC gas suppliers and pipeline service providers were also undisclosed. Discussions are under way on all fronts with an array of industry participants, Cedar told the NEB.
The Hasila are partners in the stalled BC LNG project that ran into trouble when the original Texas based investors got into financial difficulty. AltaGas, parent company of Pacific Northern Gas, is also involved in Triton, a floating LNG project that would be at an old log sort on Douglas Channel, the same site as the BC LNG project.
The response to the Joint Review Panel decision on the Northern Gateway, beginning in December and continuing until this Canada Day, both in the public and in the media is sharply divided by the Rocky Mountains.
A lof of Albertans, most of the energy companies and many in the media, especially the Toronto-based business press, keep telling Canadians that the NEB is an independent, quasi-judicial body, that carefully weighs the scientific and other evidence before coming to a conclusion.
Prime Minister Stephen Harper stands up in Question Period and from his prepared script also claims the JRP and NEB are independent bodies.
Most of those writing about the attitude of the National Energy Board have never attended a single hearing, As for the Joint Review,. those from the major media who did attend were only there for the opening and closing sessions.
In British Columbia, those attended the Northern Gateway Joint Review sessions saw a strange and arcane bureaucratic system with rules of evidence and procedure often tilted toward a proponent in the energy sector.
Those rules of evidence were created for the cosy club atmosphere of the NEB in Calgary where mostly there are friendly hearings attended only by the proponents and energy sector lawyers. Those same rules were infuriating to those in northwest British Columbia trying and failing to persuade the JRP to take seriously many of the concerns of the region. The rules of evidence and procedure were baffling to lawyers practicing in BC; even the highly experienced lawyers from the BC Department of Justice were chewed out by the JRP in Prince George for not following proper procedures.
The JRP seemed to believe that time stopped at the evidentiary deadline, and although it acknowledged that Northern Gateway was a 50 year project, the panel didn’t need to know anything new.
A careful reading of the two volumes of the Joint Review Panel report and decision clearly shows that JRP finding was not, as one columnist called it, a triumph of science over emotion, but a proceeding that was biased from the outset to find in favour of Enbridge. It is clear that even though the Joint Review Panel did impose 209 conditions on Northern Gateway, reading those almost 500 pages one sees time and time again that Northern Gateway’s evidence and assurances were accepted at face value, while the panel treated the evidence and testimony from opponents with a much higher level of skepticism.
Moving to Calgary
One of my sources once told me that the “NEB is nothing more than an extension of the Petroleum Club.” In the 1991 budget, then Prime Minister Brian Mulroney moved the NEB headquarters from Ottawa to Calgary as a political gift to Alberta.
At that time the move was also seen as practical, Alberta was still complaining no one in Ottawa was listening to it. So if the Conservative government moved the NEB to Calgary, it would be there listening to the oil patch. NEB offices were scattered across the country, consolidating them in Calgary seemed, at the time, to be a way of saving taxpayers’ money and enhancing internal communications.
Seen now, about 25 years later, it’s clear the NEB move from its Ottawa headquarters and regional offices to Calgary was a disaster waiting to happen. Over the past quarter century, despite its claims of independence, the NEB and its staff have become so embedded in the oil patch energy culture of Calgary that (probably subconsciously) the NEB has shown that it is largely incapable of really taking seriously the culture of British Columbia on issues such as the Northern Gateway and Kinder Morgan projects. The NEB Calgary culture is also colliding,with the concerns and culture of other parts of the country as diluted bitumen pipelines head eastward.
The Conservative omnibus bills that gutted environmental protection and speed up the review process has made things much worse–at least until this week.
Now the Supreme Court has sent a shot across the bow of the full steam ahead National Energy Board, compelling the board to put much more weight on the concerns of First Nations.
The decision upholding the Tsilhqot’in claim to its traditional territory means the NEB and any future joint review panel (whether involving multiple federal agencies or federal agencies and a province) are going to have to take the concerns of First Nations and indeed all Canadians a lot more seriously—and the future of the planet as well, as described in the first part of this analysis. Chief Justice Beverly McLaughlin wrote that on First Nations` traditional territory:
that it is collective title held not only for the present generation but for all succeeding generations. This means it cannot be alienated except to the Crown or encumbered in ways that would prevent future generations of the group from using and enjoying it.
“Future generations” is the key phrase.
Future generations could undermine that whole world view of the Joint Review Panel, since the panel so casually dismissed the fears of a major disaster on the coast, saying it was “unlikely” and could be “mitigated.”
The JRP basically had a so-what attitude to British Columbia, arguing that since parts of the British Columbia environment had already been degraded any future environmental problems would be minimal and could be “mitigated.”
While in the introduction to its definition of the Public Interest, the JRP says
If approved and built, the Enbridge Northern Gateway Project could operate for 50 years or more. Sustainable development was an important factor in our environmental assessment and our consideration of the public interest. The project would have to meet today’s needs without compromising the ability of future generations.
Sounds like that might match the Chief Justice. But, as the old saying goes, the devil is in the details. And just a few paragraphs later, the JRP says:
Our assessment of the project’s effects on residents and communities Considering Northern Gateway’s project design, its commitments, and our conditions, we concluded that the project’s potential effects on people’s land, water, and resource use could be mitigated. We were not persuaded that construction and routine operations of the project would have a negative effect on the social fabric of communities in the project area. We also were not persuaded that the project would adversely affect the health and well being of people and communities along the route or in coastal areas. We found that the net overall economic effects of the project would be positive and would provide potential benefits and opportunities to those individuals and businesses that choose to participate in the project.
The JRP’s attitude toward a major disaster was “trust Enbridge.”
We found that some level of risk is inherent in the Enbridge Northern Gateway project, and that no party could guarantee that a large spill would not occur. We found that a large spill, due to a malfunction or accident, from the pipeline facilities, terminal, or tankers, is not likely.
We found that Northern Gateway has taken steps to minimize the likelihood of a large spill through its precautionary design approach and its commitments to use innovative and redundant safety systems, such as its commitments to address human error, equipment failures, and its corporate safety culture. These commitments and all others made by the company
Oh well, the ecosystem will recover eventually—a conclusion that could be reached only by ignoring the evidence from Prince William Sound, site of the Exxon Valdez spill.
We found that, in the unlikely event of a large oil spill, there will be significant adverse environmental effects, and that functioning ecosystems recover through mitigation and natural processes.
We found that a large oil spill would not cause permanent, widespread damage to the environment. The extent of the significant adverse effects would depend on the circumstances associated with the spill. Scientific research from past spill events indicates that the environment recovers to a state that supports functioning ecosystems similar to those existing before the spill. We found that, in the unlikely event of a large oil spill, there would be significant adverse effects on lands, waters, or resources used by residents, communities, and Aboriginal groups.
We found that, in rare circumstances, a localized population or species could potentially be permanently affected by an oil spill. Scientific research from a past spill event indicates that this will not impact the recovery of functioning ecosystems.
In other words, some communities, probably aboriginal communities, would have be sacrificed in the public interest and the economics of Alberta while the economy of that part of British Columbia would be destroyed.
Will the JRP have to start over?
The environmental law community and First Nations leaders are already taking a look at another paragraph in the Supreme Court judgement. Paragraph 92 in lawyer speak.
One of the many reports comes from West Coast Environmental Law which noted in an e-mail
[T]he Tsilhqot’in decision, Canada’s highest court brings home the implications of this for Enbridge and other project proponents:
Once title is established, it may be necessary for the Crown to reassess prior conduct in light of the new reality in order to faithfully discharge its fiduciary duty to the title-holding group going forward.
For example, if the Crown begins a project without consent prior to Aboriginal title being established, it may be required to cancel the project upon establishment of the title if continuation of the project would be unjustifiably infringing.
And what about the overhaul of environmental legislation in 2012 to smooth the way for pipeline and other industrial development?
The court notes: “Similarly, if legislation was validly enacted before title was established, such legislation may be rendered inapplicable going forward to the extent that it unjustifiably infringes Aboriginal title.”
In other words, the Supreme Court decision resets everything.
It could nullify the recent decision by the Prime Minister to permit the Northern Gateway to go ahead. Or it could mean, especially given the number of court challenges just to the JRP, that, in light of the Tsilhqot’in decision the panel will be ordered by a court to go back to the drawing board and reconsider its findings.
Then there are the pending challenges to the Harper decision allowing the Northern Gateway to go ahead. Sources told Northwest Coast Energy News that the first of a number of court challenges were to be filed last week. It is likely that after the holiday weekend, lawyers will be rewriting their filings and their briefs in light of the Tsilhqot’in decision and presenting the Federal Court with those challenges some time in July.
The justices of the Supreme Court did allow a public interest exemption on the use of First Nations land for a larger purpose, but there must now be genuine consultation and the public interest will likely have be proven beyond a reasonable doubt, it can’t just be the whim of a prime minister with a tame, unquestioning caucus who decides what is in the public interest.
Who consults whom?
In the decision, Chief Justice McLaughlin wrote:
Governments and individuals proposing to use or exploit land, whether before or after a declaration of Aboriginal title, can avoid a charge of infringement or failure to adequately consult by obtaining the consent of the interested Aboriginal group
The right to control the land conferred by Aboriginal title means that governments and others seeking to use the land must obtain the consent of the Aboriginal title holders. If the Aboriginal group does not consent to the use, the government’s only recourse is to establish that the proposed incursion on the land is justified under s. 35 of the Constitution Act, 1982.
Compare that again with what the JRP said. As with the environmental impact it begins by saying:
The Panel finds that the magnitude, extent, and potential impacts of this project required an extensive program of public consultation. The Panel considers thorough and effective consultation to be a process that is inclusive of, and responsive to, all potentially-affected groups and individuals.
Then the JRP says:
The Panel notes that, among potentially-affected parties, there were differing perspectives on what constitutes a thorough and effective process of consultation. There were also different views among some parties about how consultation should occur, and their roles and responsibilities during consultation.
The Panel believes that it is critical for all parties to recognize and understand their respective roles and responsibilities for achieving effective dialogue during consultation. The Panel noted the principles of thorough and effective consultation at the beginning of this chapter. The Panel finds that these principles require that a process must provide timely, appropriate, and effective opportunities for all potentially-affected parties to learn about a project, provide their comments and concerns, and to discuss how these can be addressed by the applicant.
So what does it mean?
The JRP starts off by giving Northern Gateway a slap on the wrist:
The applicant [Enbridge] must be genuinely responsive. Affected parties have an ongoing and mutual responsibility to respond to opportunities for consultation, to communicate concerns they may have, and to discuss how these can be addressed.
But then it goes on in the same paragraph:
Consultation requires trust, mutual respect, and relationship-building. All parties have an obligation to seek a level of cultural fluency, in order to better understand the values, customs, needs, and preferences of the other parties involved in the consultation process. All parties may be required to adjust their expectations in response to the information, concerns, and interests raised and considered through the process. The Panel observed that this approach did not always occur in this proceeding.
Get the phrase “all parties.” It is clear here that the JRP is taking on the First Nations and other opponents for not seeing Northern Gateway’s point of view, since it accepts, as seen below, Northern Gateway’s contention that it is doing a good job with consultation,
And the word “trust.” Again the Alberta-bound JRP (the panel had no members from British Columbia, two from Alberta, one from Ontario) are saying “trust Enbridge.”
Unfortunately after a decade of operating in the northwest, and despite its spin, Enbridge has failed time and time again to establish trust with First Nations and it has equally failed to establish trust with a significant number non-aboriginal residents of the northwest.
The companies developing LNG projects have, for the most part, established a level of trust.
The joke up here is now so old it’s a cliche (but still unknown to the eastern media) where an LNG executive says, “We look at what Enbridge did and do the exact opposite.”
The Panel accepts Northern Gateway’s view that consultation is a process which should ensure that all parties are better informed through consultation, and that it involves being prepared to amend proposals in light of information received. In this regard, the Panel notes that Northern Gateway made numerous changes to the design and operation of the project in response to input provided by the public, landowners, governments, and stakeholders
In fact, Northern Gateway is still fumbling the ball.
It is true that Northern Gateway did change its plans and put another $500 million into the plans for the project–after a lot of public pressure and growing controversy during the JRP hearings over its plans.
Equally telling was Northern Gateway’s dismissal in its final arguments (arguments accepted by the JRP) that there was no earthquake hazard in the region, despite two major earthquakes at Haida Gwaii and southern Alaska just months earlier, both of which shook Kitimat.
In the final oral arguments, Northern Gateway’s lawyer Richard Neufeld summarily dismissed the fears of the Haida and Heiltskuk First Nations about destruction of the herring spawning beds because, he said, first, the chances of a tanker disaster were unlikely and second, even if there was a tanker disaster it was even more unlikely that it would occur during the spawning season. (Not that the spawning season matters, herring beds in San Francisco Bay are still damaged years after a spill there).
Now with the Tsilhqot’in decision, Enbridge can no longer summarily dismiss those fears. The companies who have proposed liquefied natural gas projects are meeting with anyone, including avowed opponents, and opening dialogues, even if both sides continue to disagree. Despite its spin, accepted by the political pundits and eastern business media, those who live in the northwest know Northern Gateway’s consultations and engagement, so far, have mostly been with friendly groups and friendly audiences.
The Supreme Court decision is going to change that attitude in the coming weeks. If Enbridge wants Northern Gateway to go ahead, the company is going to have to genuinely engage with First Nations. Given all the damage created by Enbridge over the past decade, that engagement is unlikely to change anything.
The Supreme Court decision is going to have one more consequence.
Eventually, in a few years, the decision will negate that stupid attitude from the conservative media and some in the business community that the people of northwestern British Columbia are against all development. That was never true but it’s a convenient excuse for those columnists and conservatives not to question their own assumptions.
If the reporters and columnists had bothered to come up here, if the press-release dispatching business leaders had bothered to leave their executive suites, they’d know what northwestern BC wants is responsible and sustainable development, not quick in and out profits.
The Supreme Court decision means that any future industrial development in the northwest will be much different from anything seen in the past because First Nations must be involved from the beginning.
Given its sorry track record, it is unlikely that Enbridge will be part of that development. but others will profit, yes profit, from that failure.
In the coming years it is also likely that there will be a new approach to development from the National Energy Board after they begin to see their narrow oil-patch friendly approach and rulings struck down by the courts quoting the Tsilhqot’in decision.
Both Prime Minister Stephen Harper and the Conservative political minister for British Columbia, James Moore, have brushed off Kitimat’s concerns about the Northern Gateway Pipeline after a majority of residents voted to oppose the project.
Even though Northern Gateway is a high priority for the Harper government, the Prime Minister did not bother to sign the letter himself. Instead it was Salpie Stepanian , an assistant to the prime minister who responded to the District for “taking the time to write.”
James Moore responded with a much shorter letter but apparently did sign the letter himself (if it wasn’t a sign-o-robot). He too thanked the District for writing and asked to be kept informed. Both letters were released at Monday’s District of Kitimat Council meeting.
Notes: On Monday District of Kitimat Council approved a $2500 support grant to the Kitimat EconomicDevelopment Association that says it is “active in pursuing development that will return Kitimat to a robust, self-sufficient community.” The grant was conditional in that it cannot be used for “initiatives Council does not support”–in other words Enbridge.
As expected, the federal government has approved the Northern Gateway project. In a news release this afternoon, Natural Resources Canada said that the “Government of Canada” had accepted the 209 conditions set by the Joint Review Panel for the Northern Gateway.
In recent years, Stephen Harper’s government has usually issued news releases headlined “the Harper government.” The headline on the NRC website also emphasizes the 209 JRP conditions and not the approval of the overall project, which is mentioned formally in the last line instructing the National Energy Board to issue the ” Certificates of Public Convenience and Necessity.”
Government of Canada Accepts Recommendation to Impose 209 Conditions on Northern Gateway Proposal
Proponent must demonstrate how conditions will be met, undertake further consultations with Aboriginal communities as part of next steps in regulatory process
Natural Resources Canada
The Honourable Greg Rickford, Canada’s Minister of Natural Resources, today issued the following statement outlining the Government of Canada’s decision after the Joint Review Panel’s independent review of the Northern Gateway Pipelines proposal to construct and operate two parallel pipelines to transport crude oil between Bruderheim, Alberta and Kitimat, British Columbia, and a marine terminal at the port of Kitimat. The proposal was submitted by Northern Gateway Pipelines Limited Partnership to the National Energy Board (NEB) for an environmental assessment and regulatory examination in 2010. This constituted the beginning of the regulatory process.
The Joint Review Panel for the Northern Gateway Project was an independent body established by the Minister of the Environment and the National Energy Board to review the project. The Panel’s rigorous science-based review included feedback from over 1,450 participants in 21 different communities, reviewing over 175,000 pages of evidence and receiving 9,000 letters of comment. The NEB is responsible for regulating some 73,000 kilometres of pipelines transporting crude oil, natural gas and petroleum products across Canada.
“In December 2013, the Joint Review Panel found that construction and operation of the Northern Gateway Pipelines project is in the public interest, subject to 209 conditions being met by the proponent. After carefully reviewing the report, the Government accepts the independent Panel’s recommendation to impose 209 conditions on Northern Gateway Pipelines’ proposal.
“Today constitutes another step in the process. Moving forward, the proponent must demonstrate to the independent regulator, the NEB, how it will meet the 209 conditions. It will also have to apply for regulatory permits and authorizations from federal and provincial governments. In addition, consultations with Aboriginal communities are required under many of the 209 conditions that have been established and as part of the process for regulatory authorizations and permits. The proponent clearly has more work to do in order to fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route.”
The National Energy Board will now issue Certificates of Public Convenience and Necessity.
It comes down to the idea that Harper will approve Gateway “in the national interest,” count on a vote split between the NDP and Liberals in British Columbia to avoid any consequences to the Conservative majority and then leave it up to Enbridge to actually get the job of building the pipeline and terminal project done.
Mason quotes “ a senior member of Mr. Harper’s government,” and while Mason doesn’t say what part of Canada the source is from, (unlikely in my view the source is from BC) what the member told Mason reveals that the Harper government is still mired in it the Matrix-world that has always governed its policy on Northern Gateway.
The first step, apparently coming in the next few days, is that the Harper government “rigorous” new tanker protocols for traffic along the west coast.
Even if the protocols are new, just who is going to enforce those policies?
Even if Gateway and the Kinder Morgan expansion went ahead, he argued, B.C. would still only see about 60 per cent of the annual oil tanker traffic the neighbouring state of Washington deals with. And yet Washington has an exceptionally clean record when it comes to the safe transport of oil in and out of its harbours – this, he noted, while operating under marine safety regulations that are not as rigorous as the ones Ottawa intends to put in place for the shipment of oil along the West Coast.
There are a lot big problems with that statement.
First, there’s an organization that the Mason’s source may have heard of known as the United States Coast Guard. The United States rigorously enforces its “weak” regulations, while Canada’s Coast Guard is plagued by staff shortages and budget cuts.
Second, the State of Washington also rigorously enforces its environmental regulations, not only on the coast but across the state. I have been told by retired British Columbia forestry and environmental officials (not to mention Fisheries and Oceans) that there are often more state environmental watch dogs in most Washington State counties than in all of northern British Columbia where the Northern Gateway is supposed to be going.
The September 2013, report by the US National Oceanographic and Atmospheric Administration on the export of Canadian bitumen sands through the US shows that the Washington Department of Ecology is working on strengthening regulations for both pipelines and (where it’s in state jurisdiction) tanker traffic. The same report says the state of Alaska Department of Environmental Conservation is updating its plans and possible regulations in anticipation that bitumen filled tanker traffic from Kitimat would come close to the coast en route to Asia.
Third, the coast of northern British Columbia is more rugged and stormy than the waters off Washington.
The one factor that the urban media seems to ignore, is the big question.
Who pays to enforce the 209 conditions that the Joint Review Panel imposed on the Northern Gateway project?
If the Harper government announces new tanker regulations in the coming days, who pays to enforce those regulations?
There were no provisions in the February budget for enforcing the 209 conditions. Rather there were continuing budget cuts to the very departments that the JRP ruled must be involved in the studying, planning, implementation and enforcement of the 209 conditions, Environment Canada, Fisheries and Oceans and Transport Canada.
So while Mason says “The federal government will play its part in meeting the five conditions laid out by the B.C. government for support of the project,” the response must be “Show me the money!”
During the recent plebiscite campaign, Northern Gateway finally revealed its plans for the “super tugs” that will escort tankers along the coast and up Douglas Channel. Owen McHugh, a Northern Gateway emergency manager said, “Adding these four or five tugs to the north coast provides a rescue capability that doesn’t exist in this format. So for any large commercial vessel that is traveling on our coast, this capacity to protect the waters of the north coast.” Those tugs and Northern Gateway’s plans to station teams at small bases along the coast means that the company is, in effect, creating a parallel, private, coast guard on the BC Coast.
What about the Coast Guard itself? The Harper government has been gutting Coast Guard resources along the coast even before it had its majority. It closed and dismantled the Kitsilano Coast Guard station in Vancouver. There is more dependence on the Royal Canadian Marine Search and Rescue volunteers, who have to raise money locally for modern rescue boats which cost up to $750,000. The money that government was “generously” giving to RCMSAR had to be split up to 70 stations in 42 communities along the coast as well as its administrative and training staff.
Does anyone notice what is missing from that list? What’s missing are better Coast Guard vessels just to police all the expected tanker traffic on the west coast (whether LNG or bitumen) and no mention of dedicated spill response vessels, which under the “polluter pay” policy will likely be left to private contractors (and hope that the ships are available at the time of a spill)
How will we know?
Then there is the question of how will people even know if the 209 conditions are being enforced; whether or not the reports demanded by the Joint Review Panel are going be sitting on the National Energy Board server and ignored.
There is every indication, given the government’s obsession with secrecy that until there is a disaster the Canadian public will never know what’s going on. Harper’s muzzling doesn’t just cover government scientists, it covers the lowest level of bureaucrats, as District of Kitimat Council found out when low level DFO bureaucrats refused to appear publicly before council to discuss the risk to the Kitimat River.
So the scenario is, according to Mason’s source
“I think once this decision is made, Enbridge could have shovels in the ground the next day,” the member said. “They are ready to go. This means the First Nations could start realizing profits from this right away, as opposed to the promised profits from LNG, which may never materialize. I think they need to think about that.”
While the LNG market is volatile, the “member” forgets that most of the First Nations of British Columbia have opposed the Northern Gateway since Enbridge first floated the idea in 2001. The current LNG rush didn’t start until after Japan shut down its nuclear power plants after the March 2011 earthquake, The first major anti-Enbridge rally, “The Solidarity Gathering of Nations” was held at Kitamaat Village in May 2010.
Writing off BC
It appears that Conservatives, in their election strategy have already written off Gateway opponents:
Still, there is a raw political calculus that needs to be taken into account. Polls measuring support for the pr.oject in B.C. vary, but generally have shown that anywhere from 55 to 60 per cent of the province opposes Gateway and 40 to 45 per cent support it. Isn’t that enough to scare off a government that needs critical votes in B.C. to win another majority?
“Let’s say 60 per cent are against it,” he said. “And that vote splits between the Liberals and the NDP come the next election. Who are the 40 per cent going to vote for?”
Mason also speculates that Harper will approve Gateway to stick it to Barack Obama and the delays on Keystone XL. As he points out that’s a political, not an economic decision.
There are civil disobedience classes being held across northwestern BC this month. Access to Information requests by the Vancouver Observer revealed increased RCMP surveillance of the anti-Gateway movement. There has always been talk of a “war in the woods” if the pipeline project is forced on an unwilling population.
So it comes down to a question that Mason and the Conservatives are avoiding. Mason’s source says Northern Gateway is crucial to the national interest:
“At the end of the day, you have to do what’s right, not what’s politically expedient,” he said. “You have to ask: What’s in the best interests of all Canadians?”
So given all that will the Harper government leave Enbridge to tough it out on its own?
But will the Harper government, with its bean counting obsession on balancing the budget be willing to pay for all that is needed?
There’s lots of marine clay along the pipeline route, laid down by ancient oceans. That brings to mind just one word. Quagmire, not just the wet, sticky BC mud but a political quagmire.