First Nations court challenges to pipelines have same characteristic: consultation was “inadequate.” But what does inadequate mean?

By Sue L. Blanchard, special to Energi News

Veteran pipeline executive Dennis McConaghy told a Global Petroleum Show audience in Calgary on Tuesday that Canada’s new regulatory review process for energy projects has to change or no more pipelines will be built in Canada, despite recent industry forecasts of a 1.6 million b/d boost in production by 2035. 

His comments were directed at the Trudeau Government and Environment Canada’s new Impact Assessment Act, which broadens the scope of environmental assessments and gives Environment Canada more discretion to veto energy projects like pipelines even before an assessment begins.

Dennis McConaghy.

“The current government should stand down from its current legislation (Bill C69),” said McConaghy in an interview. “Trust me, it’ll only make things worse and will probably be the death of private capital for any major (energy) infrastructure in this country.”

If passed by the House of Commons, Bill C69 will enable Environment Canada’s new Impact Assessment Act and Impact Assessment Agency of Canada. The new act would replace the Canadian Environmental Assessment Act of 2012 and the Canadian Environmental Assessment Agency.

The new act expands consultations with stakeholders and calls for greater respect for indigenous knowledge.

“What (Environment Canada) could actually do is clarify what represents adequate consultation,” said McConaghy. “

“All of these energy projects have been beset with litigation after the approval stage. They get approval and then there are cases brought before courts.  And certain courts are prepared to let these claims overhang the approval process.”

Court challenges delayed the $7.4-billion Trans Mountain pipeline expansion and overturned approval for Enbridge’s Northern gateway pipeline in 2016. In both cases indigenous groups argued that Canada failed to consult with First Nations on the pipeline projects.

“The claims all have the same characteristic, that consultation was inadequate. But what does inadequate mean? Was it the (joint federal-provincial consultation and accommodation) report that you didn’t like? Or were there actual gaps in your understanding of what the project actually was?” McConaghy said.

“A functional country actually has to give clarity to that. And they have to reduce the risk of the courts second-guessing adequate consultation. Frankly, that is one of the biggest doubts and risks that overhangs the Kinder Morgan project.”

The new Act calls for a 180-day planning phase and consultations with the public, local jurisdictions, federal agencies and indigenous peoples before the assessment begins. The legislated timeline is shorter now, and Environment Canada can “stop the clock” during the planning and assessment phases, leading to further uncertainty.

“We have to get the politics out of these projects early not late. By that I mean that the regulatory process should be a technocratic not a political exercise,” said McConaghy.

“It should be about setting conditions on the construction and the operation of the project, ensuring that legitimate stakeholder impact, environmental impact and safety risks have been addressed through reasonable conditions.”

McConaghy said “reasonable conditions” should achieve global standards of risks, “because there’s no absolute guarantee that there won’t be a future incident with any piece of infrastructure.”

The new Impact Assessment Act also calls for alternative means of carrying out the project in a technically and economically feasible manner.

Resource companies must show they have deployed the best available technologies and contributed to sustainability without hindering the Canadian Government’s ability to meet its environmental obligations and climate-change commitments.

Sustainability would be mandatory in the new act and is defined as “the ability to protect the environment, contribute to the social and economic well-being of the people of Canada and preserve their health in a manner that benefits future and present generations.”