NEB included downstream GHG emissions at the 11th hour of Energy East review, not upstream, as Morton claims

Ted Morton is once again condemning Rachel Notley for not doing enough to get pipelines built for Alberta, this time in a Calgary Herald op-ed on Saturday. Yet again, Morton has got his facts wrong and misrepresented a complex constitutional issue as an attack on Alberta. To make matters worse, UCP leader Jason Kenney, who really should know better, is now trumpeting this misinformation all over social media.

The former Alberta PC finance minister under Ed Stelmach, University of Calgary professor, and all around conservative firebrand made two arguments, one of them wildly inaccurate – especially curious for a prominent academic, who should adhere to higher standards – and the other an over-simplification of a knotty constitutional issue seemingly designed to mislead Alberta voters.

Firstly, he wrote that the “NEB’s last-minute addition of upstream emissions — which are emissions created during production — to the Energy East review process was a serious and unacceptable intrusion into provincial jurisdiction.”

Secondly, he added that “According to Section 92(A) of the Constitution, upstream emissions are an area of exclusive provincial jurisdiction.”

“It might be a complex issue, but a very important read from Ted Morton. Last session, the United Conservatives repeatedly asked the NDP to stand up to this unconstitutional violation of Alberta’s rights re. upstream emissions. The NDP mocked our calls,” tweeted Kenney.

This is a complex issue, but when one unpacks it, turns out the NDP were right to mock the UCP demands.

Downstream GHG emissions, not upstream added at last minute

The Justin Trudeau Liberals actually ran in the 2015 national election on including upstream emissions as part of pipeline reviews. Readers can find the relevant passage on page 9 of the Liberal economy and environment platform: “We will explore, consult, and work collaboratively to move towards a system where federal environmental assessments of projects include an analysis of upstream impacts and the greenhouse gas emissions resulting from the projects being assessed.”

On Jan. 27, 2016 the Trudeau Government published the five interim principles that would govern review of Energy East. The second principle is to “Assess the upstream greenhouse gas emissions associated with this project and make this information public.”

In June 2016, a memorandum of understanding was signed between the NEB and Environment and Climate Change Canada, the federal department headed up by Minister Catherine McKenna, in which the two agencies agreed that ECCC would conduct an assessment of upstream emissions for Energy East, leaving the NEB its usual task of assessing “emissions directly related to construction and operation of the Project.”

On May 10, 2017 the NEB published its draft list of issues to be addressed by the review panel. Featured prominently under Section 10 was upstream emissions.

There is some confusion about which agency would actually do the assessment. The 2016 MOU clearly assigns this task to ECCC. The NEB list of issues implies it will be the work of the national energy regulator.

Regardless of how the agencies ultimately sorted out this division of labour, the intent to assess upstream emissions is as clear as can be and has been for at least two years.

The nasty NEB may have snuck up on Prof. Morton, but for Energy East proponent TransCanada and the rest of us, the inclusion of upstream emissions were hardly a surprise.

Federal vs. provincial governments – who regulates emissions?

As for the question as to who has jurisdiction over upstream emissions, Morton is simplifying a complex issue that hasn’t yet been sorted out, according to constitutional scholar James Coleman of the Dedman School of Law at Southern Methodist University, and a former University of Calgary professor.

“It’s a simplification because a) there’s a reasonable argument that the federal government has authority to regulate GHGs; and b) that even if it doesn’t have the authority, there’s no harm in just asking for this information,” he said in an email.

What the Canadian government cannot do is regulate oil production, which is clearly the purview of the Alberta government.

But what if the NEB imposes emissions-related restrictions during its review of a pipeline project that ultimately restrict production in some way?

“If the government said it is using the information to make sure new pipelines don’t lead to too much oil production, that looks a lot more like unconstitutional overreach,” Coleman wrote.

“In a middle case, the government could say that it’s only looking to control greenhouse gas emissions from oil production in Alberta—not production itself. That would raise all the usual issues about whether greenhouse gas regulation should be left to the provinces or regulated by the federal government as well.”

Coleman says there are reasonable arguments for both levels of government to regulate emissions. To claim the issue is settled and clear cut, as Morton does, is not correct.

The one Morton did get right is his point that “Energy East was unpopular in Quebec, and the Liberals did not want to have to defend it in the next federal election.”

As I’ve argued in three columns (here and here and here), it is a credible hypothesis to argue that once President Donald Trump put TransCanada’s own 830,000 b/d Keystone XL pipeline back on the table in March 2017, he gave the Trudeau Liberals an out on the Quebec election issue.

Which would explain why the Liberals released a June 29 NEB modernization discussion paper that was viewed very unfavorably by the Alberta-based industry, then followed up by having the NEB unexpectedly announce in August that downstream emissions (those created by refineries and automobile drivers, mostly in other countries) would be added to the Energy East review.

Downstream emissions were the “straw that broke the camel’s back for TransCanada,” not upstream emissions – which were already in play for two years – as Morton tries to argue.

As Notley argued quite convincingly, if the US State Dept. assessed upstream emissions during its 2015 review of Keystone XL and still recommended approval by then President Barack Obama, why should TransCanada worry about Energy East, especially since the NDP government has implemented a number of regulations (including the Carbon Competitiveness Incentives) designed to significantly lower oil sands GHG emissions?

What really killed Energy East was Liberal mishandling of the NEB modernization process and the NEB imposing the downstream emissions assessment, for which Alberta Energy Minister Marg McCuaid-Boyd roundly criticized the Trudeau Government in Oct. when TransCanada withdrew the application and swallowed a $1 billion charge for work already undertaken on the project.

Morton’s call for Notley to demand that both downstream and upstream emissions be removed from NEB pipeline assessments, followed by a legal challenge if the federal government refuses, as it almost certainly would, is nothing more than conservatives playing silly buggers in Alberta politics in advance of the 2019 election.

One can almost hear the UCP meme generators cranking up the outrage machine. And, really, meme fodder is really all Morton’s argument is good for.