Analysis

Everything you wanted to know but were afraid to ask about the NEB hearings

A guide to the NEB hearings coming up on the proposed Energy East pipeline.

What's all this Energy East business about?

It's been a long and winding road, strewn with potholes and roadblocks, for the National Energy Board and the proposed Energy East pipeline. (Sue Ogrocki/Associated Press)

It's the same process. But different.

Federal Natural Resources Minister Jim Carr was in New Brunswick on Friday and found himself defending the National Energy Board's review of the controversial Energy East project.

The process has changed and adapted in four important ways — yet technically is still following the rules put in place by the Conservative government of Stephen Harper.

Carr told CBC's Information Morning Fredericton that while the Trudeau government plans to overhaul those rules, it wouldn't be right to force TransCanada Corp. to wait to reboot its application under a new process.

"They had already invested hundreds of millions of dollars," Carr said Friday of the company pitching to build a 4,500-kilometre pipeline to carry oil sands bitumen from Alberta to an export terminal in Saint John so it can be sold on the world market.

"To say 'the government has changed, and we believe that we can do a better job as a regulator,' doesn't mean you have to go back to square one at a cost of many hundreds of millions of dollars. It doesn't pass the fairness test."

Instead, Energy East will be subject to the Harper rules, which Prime Minister Justin Trudeau once called "torqued" in favour of the oil industry.

But while the process is officially the same, it's been "enhanced," scrutinized, appended, halted and restarted in several ways:

Parallel process

The Trudeau Liberals came to power in 2015 criticizing a pipeline-review process that it said didn't pay enough attention to environmental concerns.

The existing NEB law requires the board to look at technical and safety issues and to only hear from people and groups directly affected by a project.  

Prime Minister Justin Trudeau promised to hold a second set of consultations on the pipeline. That has been delayed. (Sean Kilpatrick/Canadian Press)
Though they opted to stick with that process for Energy East, they also asked the NEB to add "enhanced engagement opportunities," a second set of consultations that will give Canadians left out of the formal hearings a chance to take part in separate public sessions.

Those parallel consultations haven't started yet, however, because of delays to the main hearings.

The Liberals also said they would hold their own consultations with Indigenous people and would assess the pipeline's potential impact on emissions — something outside the NEB's mandate.

New panellists

The second major change was forced on the NEB. In 2016, media reports revealed two members of the three-person Energy East panel discussed the project at a private meeting with former Quebec premier Jean Charest, then a lobbyist for TransCanada.

All three panellists, as well as the NEB chair, recused themselves, and earlier this year, three new panellists were appointed, including Don Ferguson, a former deputy minister in the New Brunswick government.

The new panel isn't forcing TransCanada to resubmit its application, but it hasn't yet ruled whether the original application is complete. Only then will the 21-month timeline restart again.

New criteria

Even though the Liberal government had already announced it would consider the emissions impact of Energy East, the new NEB panel announced earlier this month it will now examine that issue as well.

The panel will look at "upstream and downstream emissions" — whether Energy East would lead to increased oil production in Alberta and increased oil consumption by customers.

Media reports in 2016 revealed two members of the three-person Energy East panel discussed the project at a private meeting with former Quebec premier Jean Charest, then a lobbyist for TransCanada. (Graham Hughes/Canadian Press)
The panel said it will also consider how government climate "strategies, policies, laws and regulations," including emissions caps and carbon taxes, would affect the business case for the pipeline.

In other words, if new climate-change policies will reduce oil production and consumption to the point the pipeline isn't needed, it may not get approved.

And then there's modernization

The big change at the NEB has yet to come: the overhaul Trudeau promised in 2015.

Earlier this spring, a five-member commission recommended splitting the organization in two, with one agency assessing projects and the other monitoring the industry, and moving it from Calgary to Ottawa to reduce the influence of the oil sector on decisions.

It also recommended a longer approval process.

Those reforms, if adopted, wouldn't affect Energy East.

Policy is clear, Carr says

After the NEB makes its recommendation, the federal cabinet gets the final say.

Despite the constantly evolving NEB process, Carr made it clear Friday the government is pro-pipeline — with an asterisk.

"The government's policy is to move our natural resources to markets sustainably," he said. "We have approved pipelines. We don't want 99 per cent of the export of oil and gas in Canada to go to one customer, the United States."

Carr said the government's stance is clear: economic development and "environmental stewardship" go hand in hand.

But he wouldn't say if there's a scenario in which the federal cabinet would overrule a positive NEB recommendation on Energy East and kill the project.

"That would assume that I know everything, and I don't," he said. "That's why there will be 21 months of really thorough examination, and I think it's reasonable and fair to let this process to play out."

With files from Information Morning Fredericton