Copyright of the Daily Oil Bulletin 2018
Contentious Project Reviews Point To Need To Deal With Larger Energy Issues
The lack of a meaningful process to deal with unresolved issues around aboriginal rights, climate change and cumulative impacts of energy projects is impacting on the effectiveness of individual project reviews such as that for the Trans Mountain pipeline expansion, an Ottawa conference heard this week.
Societal values have changed over the decades and more recently misinformation and distrust in information has led to “far lower levels of trust in government, in industry, in the media,” said Monica Gattinger, Institute for Science, Society and Policy, and chair, Positive Energy at the University of Ottawa. “People are less deferent to decisions of public authorities. We see people want to be involved in decisions that affect them, the democratization of decision-making.”
However, persistent elephants remain in the room, she said, referring to “policy gaps on big issues like climate, like reconciliation with Indigenous peoples and cumulative effects management for the effects of multiple projects. We have seen these spilling over into the energy decision-making processes for individual projects, all of which are ill-equipped to try to address any of those broader policy issues.”
David Runnalls, board president, Pembina Institute, saidthe longstanding failure of Canada to address climate change not only puts future projects at risk, but impacts on Canada’s ability to deal with the issue on its own terms. “I’ve been arguing for years that if you [delay action] and you are a smaller country and a medium sized power, sooner or later you will get to the stage where your climate policy will be determined by somebody else, by the international community,” he told the conference.
And Kim Baird, senior advisor, Hill & Knowlton Strategies, and a former First Nation leader who led the negotiation and implementation of a modern land claim agreement and self governance in her B.C. community, said issues around proper consultations with First Nations aren’t going away any time soon.
“Although British Columbia is unique in relation to issues of aboriginal rights and title, I believe other regions of the country will see increased legal uncertainty about major energy projects unless aboriginal rights and other Indigenous rights are resolved. And by resolving them I think involvement in design implementation and benefits of major projects will be a part of those solutions.”
The Positive Energy conference, Public Confidence in Energy Decision-Making: How is Canada Doing?, was the culmination of the three-year Positive Energy project of the University of Ottawa’s Institute for Science, Society and Policy. Positive Energy seeks to strengthen public confidence in Canadian energy policy, regulation and decision-making through evidence-based research and analysis, engagement and recommendations for action.
‘We can do better’
Canadians are very engaged on the energy file and feel that it’s possible to develop energy resources while protecting the environment, but think Canada is doing a poor job at balancing concerns of communities and building public confidence in energy projects, according to pollster Nik Nanos.
The chair and CEO of Nanos Research said he is still crunching the numbers from a telephone and online survey of 1,000 Canadians, undertaken between March 31 and April 3 as part of the Positive Energy project.
“If I could summarize it in four words: ‘we can do better,’ is probably the single message that we received from Canadians.”
He told the conference that when Canadians hear something in the news about energy issues, whether in their neighbourhood, in their province or other parts of the country, they are engaged. “If there was a key takeaway, it is that [Canadians] are very pragmatic,” said Nanos.
“Another thing that came through, and it’s very interesting considering all the things in the news lately related to Trans Mountain, is that a significant majority of Canadians expect federal leadership on this issue. [They say] that yes, communities play an important role, stakeholders and Indigenous people play a very important role, provinces play an important role, but that there is an expectation that the federal government exercise its convening power to bring people together, to find solutions that are in everybody’s best interest,” he said.
“The good news is that, even though Canadians say that we can do better, they believe that we are creative enough to find solutions, positive solutions that can reconcile our energy reality in terms of what we need to have prosperity in the future, and at the same time our environmental aspirations,” Nanos said.
Gattinger said she found that “a fascinating disconnect. That was one of the things that struck me was the extent to which, if you just listen to the media and the political controversy, one would have the impression that issues around energy are far more polarized than Canadians, in the public opinion research that we have done, are really demonstrating,” she said.
Which is not to say there are not large gaps to be overcome around how to deal with concerns raised by communities, Aboriginal groups and the environment, speakers said. Indeed, in his address to the conference Jim Carr, federal natural resources minister, was interrupted by members of the Aboriginal community who contended that their concerns were not being addressed. One of those who interrupted Carr, who was permitted to take the podium and briefly conversed with the minister, told the audience that “all the work that you are doing on our lands is illegal and should be ceased immediately” until consultation can take place.
“This is precisely the reason that Positive Energy exists,” Gattinger said after the interruption. “Clearly we are facing some very substantial challenges in this country around different ways of thinking about energy [and] different ways of thinking about how we make decisions when it comes to energy projects.”
Part of the problem is the lack of an energy vision for the country, Nanos said. “How can you get anyone to buy into a project when they don’t know how it fits into the future? You can’t. There needs to be an explanation of how [a project] fits into the future in terms of our aspirations for the economy, our aspirations related to the environment, our aspirations in terms of the communities we want to live in,” he said.
“The thing is that, many times if you can get people to buy into the destination, they are probably willing to accept some things that in isolation they might feel uncomfortable with, and I think what we are lacking in Canada is an understanding of what that destination is.
“And I think that’s where we need the … convening power of everyone to come together to say, ‘OK, maybe you don’t like this, but this is how it fits into our long-term strategy for our country and how it fits into our engagement of communities and stakeholders.’”
Hero to zero, to question mark
Climate policy has a long history of failure in Canada, for which it will eventually pay a price, said Runnalls. “If I was to write a book about Canadian climate policy, I would call it ‘From Hero to Zero, to Question Mark,’” he said. “[Former Prime Minister] Brian Mulroney got this and actually was a major figure in getting climate change on the international agenda, but there then was a hiatus of a number of years in which we consistently overpromised and under delivered, and then under delivered in a major way.
“That’s essentially what happened in 2009, when Prime Minister [Stephen] Harper agreed to the 2030 targets, with no plan to do anything about them and no plan as to how Canada would actually meet them.”
Into that vacuum moved the provinces, with some varied success, and the current federal government — after a “semi miraculous” performance at the Paris climate talks in which it brought onside virtually every premier to pledge to meet those targets, said Runnalls. Ottawa has made some progress to stitch together a pan-Canadian climate framework, but that too may not last, he said, pointing to the difficulty of dealing with long-term policy in short-term electoral cycles.
It is “quite likely” new governments will be elected in Ontario this year and Alberta next year, “who have no interest in this as an issue. We will see ourselves fighting elections on the famous ‘job-killing carbon tax,’ of which there is no evidence. And I’m afraid what’s happening now is we are doing what is happening in the United States, which is politicizing an issue which shouldn’t be politicized in the way that it is.
“And I’m not going to necessarily defend the current government, but I think if we flip-flop back and forth on an issue which is at minimum a 50- or 60-year plan, we are going to be in serious trouble. We are going to get our politics dead wrong, and our political establishment will have real problems in establishing any credibility on this issue with the Canadian public,” Runnalls said.
Unresolved Aboriginal issues
Baird said that while “things are headed in a better trajectory, there is still a far way to go” in terms of Aboriginal community consultation and engagement.
“I think it’s twofold; you have Canada struggling with climate change and sorting out emissions with how to move forward on one stream, and the other stream is, Canada is struggling on how to resolve Indigenous rights as well,” said Baird. “I think it’s critically important that Canada resolves Indigenous issues on a separate track to energy issues, and I sense a real urgency in relation to sustainability of Indigenous communities as equally important as energy issues.
“I believe there will be synergies in relation to those issues,” she added, such as the ability for Aboriginal communities to become equity participants in major energy projects to develop their own economies. “There is a huge range of solutions there, but I think we can’t lose track of that issue.”
Energy in context
Encana Corporation CEO Doug Suttles took a larger view, putting Canada’s energy industry in perspective on the world stage.He said not enough attention is given to the developing world in which energy cannot be taken for granted, and that Canada’s energy industry has an important role to play in exporting energy to those areas.
“Demand for energy is growing as fast as it has ever grown at any time in history. The demand for oil and gas is at the highest level of all time and it’s still growing quite rapidly.”
Though demand is relatively flat in the developed world, growth is coming from the two and a half billion people around the world who are trying to move out of poverty into middle class, he said. “This is a very different issue for them than it is here, and I think this is one of the things that’s challenging about it, particularly in Canada where we are an exporting nation.”
Suttles also said Canada should get more credit for initiatives already taken or sought to reduce emissions, both in the country and internationally. For example, Encana was involved in three natural gas processing plants in British Columbia that run on hydro electricity. If that gas could be liquefied on the coast using partial power from hydro and landed as LNG in Asia, it would have less than half the carbon content of natural gas liquefied on the Gulf Coast of Texas, he said. And if it displaces coal in Asia, that would cut another 60 per cent of emissions.
“I think this gets to part of the information issue. I think a lot of people aren’t informed of how Canada can play a role that’s bigger than just Canada’s — it’s about the whole world because there is a whole lot of places where oil and natural gas is produced where you don’t have access to hydroelectricity, so this opportunity doesn’t exist.
“But without information about things like that, how can people make balanced decisions, particularly if most of the information presented to them is all the cases where something didn’t go in the way they wanted it to go, and if that isn’t balanced out? So we have to find a way to do this.”
Restoring public confidence
Carr maintained Canada is well positioned to lead the global transition to a low-carbon economy, “but first we have to restore public confidence…. Canadians’ confidence in the country’s energy system has slipped. There are still those who think we have to sacrifice the economy to protect the environment, or vice versa.”
In concert with provinces and territories the Canadian energy strategy will see the leveraging the fossil fuel resources to deliver clean-energy solutions, advancing shared priorities to use more renewables and promote energy efficiency and linking those provinces that have an abundance of clean electricity with those who are trying to get there, he said.
Bill C-69 will strengthen the way environmental assessments and regulatory reviews are carried out with better rules to restore public trust, advance Indigenous reconciliation, protect the environment and encourage new investments, he added.
The natural resources minister said the new Impact Assessment Agency replacing the Environmental Assessment Agency will “deliver a single, consistent and predictable assessment process for designated projects and co-ordinate consultations with Indigenous peoples. It will look at how a project could affect not just our environment, but also communities and health, Indigenous peoples, jobs and the economy over the long term.”
And the new federal energy regulator to replace the National Energy Board will provide a modern regulator, “updated to reflect Canada’s changing energy needs and an expanded mandate to review traditional and renewable sources of energy — including offshore wind.”
As for Kinder Morgan’s planned Trans Mountain pipeline expansion, Carr said, “Even the best processes, driven by facts and evidence and the widest possible public consultations, cannot guarantee that everybody will agree with the results of that process. But at least everyone should be able to agree that the process itself was fair and open, and balanced and based on the best evidence. That’s what restoring public confidence is all about.
“Does it ensure unanimity? Of course not. At the end of the day, good people will disagree about the outcome. That’s fine. Because that’s where the government of Canada’s responsibility comes in — making difficult decisions that are in the national interest.
“We stand by that decision,” he added. “And we are prepared to be held accountable by Canadians the next time we go to the polls. In free and democratic countries like ours, that is the ultimate expression of public confidence.”