Energy East, when all is said and done, will serve as a fascinating case study for many decades to come. In the meantime, the project once publicly dubbed "pharaonic and utopic" by the CEO of a major energy corporation will continue to polarize Canadians. This division is nowhere more profound than in Quebec.
Quebec opposition to Energy East comes from every quarter and is concentrated along three axes:
- Canada and Quebec must fight climate change and prioritize de-carbonization. The pipeline will increase western Canadian oil production and related greenhouse gas emissions, thus making it more difficult for Canada to transition away from oil and meet its environmental objectives and international obligations.
- Pipeline accidents occur and big pipelines have big accidents. Energy East is projected to have a daily capacity of 1.1 million barrels, making it one of the largest pipelines in North America. Damage from spills will be amplified because Energy East is expected to cross more than 850 rivers and other bodies of water. An accident could therefore have serious consequences, including adversely affecting potable water sources.
- Quebec does not need the oil from Energy East. It is an export project that will produce little lasting economic benefit for Quebec and the 65 municipalities along the project's path.
A fourth axis of complaint is receding at this time. A chorus of elected officials and community groups have complained for some time about what they perceive to be arrogance, lack of consultation and information. Things have greatly improved in the last six months and criticism is more muted.
Opposition to the project is a broad coalition of diverse groups and individuals with different concerns. For example, most Quebec officials are primarily concerned with criticisms 2 and 3: safety and permanent economic benefits.
The Quebec government will remain neutral until such time as it understands the project and has analyzed it. Its final decision is expected in June 2018.
Government has been trying hard to frame the Energy East debate in Quebec and bring order to an otherwise vociferous and politically corrosive debate. This has been difficult but Quebec has taken four very important steps:
A. In November 2014 the Premiers of Quebec and Ontario agreed on seven joint principles for approving pipeline projects. The principles are reproduced verbatim below:
- Compliance with the highest available technical standards for public safety and environmental protection;
- Have world leading contingency planning and emergency response programs;
- Proponents and governments consult local communities and fulfil their duty to consult with Aboriginal communities;
- Take into account the contribution to greenhouse gas emissions (Quebec at this time understands this to mean greenhouse gas emissions from building and operating the pipeline);
- Provide demonstrable economic benefits and opportunities to the people of Ontario and Quebec, in particular in the areas of job creation over both the short and long term;
- Ensure that economic and environmental risks and responsibilities, including remediation, should be borne exclusively by the pipeline companies in the event of a leak or spill on ground or water, and provide financial assurance demonstrating their capacity to respond to leaks and spills;
- Interests of natural gas consumers must be taken into account.
B. Quebec has mandated the Bureau d'audiences publiques sur l'environnement (BAPE), Quebec's environmental evaluation body, to look into the environmental aspects of the project. Government wants to de-politicize the debate by referring the matter to technocrats and experts best able to evaluate the project. Energy East recently agreed to present the project to the BAPE but wants to do so "voluntarily" as it does not recognize the BAPE's jurisdiction. Quebec disagrees and insists that Energy East recognize the BAPE's jurisdiction.
C. Quebec has tasked the Ministry of Finance with studying the economic benefits of Energy East. The BAPE has demonstrated in the past that it is ill equipped to deal with economic issues.
D. Quebec's 2030 Energy Policy released early April 2016 (see our April 8, 2016 post) is very "green" but confirms that Quebec will continue to use oil well beyond 2030. Oil is part of Quebec's future and Quebec states in the Policy that it will favor "the safest modes of transportation from an environmental and technical standpoint" (page 59).
A number of factors have conspired to shift the Quebec government's position on who has the final say on Energy East: relentless opposition to the project, political face-saving measures required by successive and very public faux-pas, federalist vs. independence politics, etc. The position of the Quebec government has gone from participation in the NEB process and letting the federal government have the final say to Quebec deciding matters regarding the Quebec portion of the pipeline. This represents a significant departure from accepted Canadian constitutional law.
But the decision on Energy East will ultimately be political and the current timetable for the federal and Quebec processes confirms this. The NEB's report is scheduled to be delivered to the federal government in March 2018 and the federal government is expected to make a final decision by September 2018. The BAPE is expected to deliver its report to Quebec's environmental minister in February 2017. The Minister in turn is expected to deliver his recommendation to the Quebec government in May 2018, with Quebec's final decision scheduled to follow in June 2018. Quebec City will decide before Ottawa. But 2018 is an election year in Quebec and Energy East is the kind of issue that could loom large in the campaign leading up to the vote (which, in accordance with Quebec's fixed-date election law, will be held in October 2018).
The Parti Québécois, Quebec's official opposition, is not irremediably opposed to Energy East but has made it very clear that Quebec must have the final word. The last thing Premier Couillard wants to do during an election is defend an unpopular federal decision and one can expect that Ottawa does not want to force the federalist Liberals to choose between its electorate and Canada.
Any of the following would make it very difficult for the Quebec government to support Energy East:
- British Columbia is considered an environmental leader. If it were to reject the passage of an oil pipeline through its territory on safety or environmental grounds, then Quebec would have a very difficult time defending a different outcome. Thus, what happens in B.C. will have repercussions in Quebec. If Alberta's neighbour is refractory, then why should Quebec, more than 2,500 km away, come to a different decision?
- The BAPE, Quebec's expert body, concludes that (i) Energy East is inherently unsafe and/or environmentally unsound, and (ii) no changes to the project would modify such finding. In other words project risks cannot be reasonably mitigated.
- Quebec's Ministry of Finance concludes that the project generates insufficient economic benefits for Quebec and Energy East is not prepared to improve the bargain.
A lot has been said about Quebec's lack of enthusiasm for Energy East. Much of it has been unhelpful and unfair. While Energy East is viewed at best as an unfortunate distraction by the Quebec government, it remains that Quebec is doing its best to provide a framework within which both sides can present their case and the pipeline can be impartially studied on its merits.
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