Industry has already said it would reduce carbon intensity of oil sands crude, build partnerships with First Nations – Trudeau wants action

On Thursday, the Trudeau Government introduced new rules governing pipeline environmental assessments. The best way to understand them is this: The Liberals are holding industry’s feet to the fire.

Trudeau

Canadian Environment Minister Catherine McKenna.

Last week, Prime Minister Justin Trudeau said he supported Alberta Premier Rachel Notley and Ontario Premier Kathleen Wynne and their backing of TransCanada’s Energy East pipeline from Alberta to New Brunswick.

This week he imposes tough new conditions that industry is already worried about and which have raised the ire of opposition parties.

How do we square Trudeau’s public cheerleading for pipelines with the onerous process announced yesterday?

Simple. He wants industry to fix the two biggest issues dogging their pipeline projects. If they do, he has dangled the enticing carrot of federal cabinet approval, which is the final step after National Energy Board approval.

No question, the new approach is tougher on Alberta oil sands producers, in two ways.

trudeau

Canadian Prime Minister Justin Trudeau.

One, for the first time the National Energy Board must consider upstream greenhouse gas emissions. Environmentalists have been demanding this for years and they were giddy with the victory. “If this new process is rigorous and the government does what it says it will do, they will come to the inevitable conclusion that the Kinder Morgan pipeline cannot be built,” said Sven Biggs, pipeline campaigner for Vancouver-based ForestEthics Advocacy.

But Big Oil was hoist on its own petard.

When Notley announced her climate change strategy in Nov., four Big Oil CEOs stood with her on the stage, cheering a carbon tax, a GHG emissions cap, and methane emissions reductions because they believed it would earn them market access.

inside-enduralloy-pipeDown-hole tubing failures are costly. Reduce failures due to wear/abrasion with EndurAlloy™.  Available in Texas through Maple Leaf Marketing.

 

 

Trudeau

Tim McMillan, CAPP president.

And here is where Big Oil put its gigantic foot in its mouth: Tim McMillan, president of the Canadian Association of Petroleum Producers, said in a Nov. 20 press release: “Our industry developed the technology to get the oil out of the sand, and we will develop the technology to take carbon out of the barrel. We know we can do more and we will do more.”

The new pipeline regs are Trudeau’s response: “Ok, show me.”

CAPP opened the door and the Canadian government happily walked through it. Can you blame it?

Two, the bar has been raised for First Nations consultation, which has been a highly controversial issue in British Columbia, where First Nations have been among the most vocal opponents of Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain Expansion projects. To be frank, the pipeline companies completely bungled the First Nations file.

Your faithful scribe has heard horror story after horror story during interviews with First Nations leaders, and from industry insiders.

trudeau

Jim Carr, Canadian natural resources minister.

Enbridge, in particular, is a toxic brand on the West Coast, though Kinder Morgan is rapidly catching up. And one can expect Ontario and Quebec First Nations to be just as vocal in their opposition to Energy East.

The companies have just not been able to get their head around doing business with First Nations.

And that really is the issue. Consultation, required by the Canadian Constitution, is not enough.

First Nations want to be equity partners on projects crossing their traditional territories. And they have the legal clout to back up their demands.

trudeauThe Liberals’ new pipeline process appoints a ministerial adviser who will consult with indigenous communities along the proposed pipeline routes.

Trudeau has said he wants to be more hands on as a deal broker, someone who can bring parties together to iron out their differences. The ministerial advisor will be the Prime Minister’s eyes and ears on the ground. If there are compromises to be had, presumably that person will be in the know.

Who the government appoints as the advisor will be a clue about how seriously Trudeau wants this process to work. No word yet on when that appointment will take place, but expect it shortly.

To sum up, the Liberal government of Justin Trudeau appears willing to support new pipelines for Alberta oil, but only if industry meets higher standards – standards pipeline operators and oil sands producers have already agreed to in one form or fashion.

The bar has been raised. Can industry raise its game? We’ll see.