CALGARY – National cohesion on Energy East seemed to drift further out of reach Tuesday after the Quebec government announced plans to seek an injunction against the company proposing the cross-Canada pipeline.
Environment Minister David Heurtel said his government got no response from TransCanada Corp. (TSX:TRP) to two letters it sent in late 2014 advising that the $15.7-billion project must pass a provincial environmental impact assessment.
So he said the province intends to go to court to make sure the company obeys provincial rules. The Calgary-based company insists it’s a matter of federal jurisdiction.
“In the face of its neglect, the government has taken action,” Heurtel said. “This is not only a matter of respect, but equally a question of fairness toward all companies that wish to do business in Quebec.”
Heurtel stressed that Tuesday’s announcement does not mean the province has decided whether it’s for or against the project.
He also sought to defuse any potential backlash from Western Canada.
“This is not directed at any province or region,” said Heurtel.
“This is about one company that wants to do a project in Quebec which, in our opinion, is not respecting Quebec law.”
Nonetheless, Saskatchewan Premier Brad Wall said the move is likely to be “divisive.”
“Let’s respect the fact that there is a national process in place,” he said. “Provinces shouldn’t be slapping their own processes on top of that, especially when it is trying to avoid the project happening at all.”
Alberta Premier Rachel Notley said if Quebec wants the power to veto the pipeline, the province will fight back vigorously.
But based on discussions she’s had, that does not appear to be the case.
“I am going to leave the gun in the holster until we are actually at the gunfight,” she said.
In Vancouver, Prime Minister Justin Trudeau said he understands a province’s desire to seek “social licence” for pipelines.
“Even though governments grant permits, ultimately only communities grant permission,” he said. “And drawing in from voices and a range of perspectives is going to lead us to better kinds of solutions and better outcomes for everyone across the country.”
Pipelines that cross provincial boundaries are subject to a federal environmental review process administered by the National Energy Board. The federal cabinet makes the final decision based on the NEB’s recommendation.
Provinces conduct their own reviews to help formulate their positions, which are considered in the NEB process.
Quebec’s environmental regulation agency is to begin hearings Monday.
TransCanada called Tuesday’s move “perplexing” in light of that impending process.
Louis Bergeron, vice-president in Quebec and New Brunswick for Energy East, said the BAPE (the French-language acronym for the environment review body) already has most of the necessary documentation Heurtel said was needed.
“If there’s additional information that is required, we will be providing it during the BAPE hearings,” he said.
Energy East would carry 1.1 million barrels a day of western crude as far east as Saint John, N.B., serving domestic refineries and international customers.
This isn’t the first time jurisdictional debates have weighed on pipeline plans.
Except this time, the dynamic has been flipped, said Alan Ross, a partner at law firm Borden Ladner Gervais in Calgary.
“Historically, at least in Western Canada, the approach has been to achieve a one-window regulatory process where there’s not duplication or overlap between the federal and provincial governments,” he said.
“What the Quebec injunction seems to suggest is precisely the opposite, where you do have the provincial government seeking to assert its powers in respect of environmental assessment.”
In January, the B.C. Supreme Court nullified an agreement that gave the NEB the power to review the Northern Gateway proposal, which aims to connect Alberta crude to Kitimat, B.C.
That means B.C. must make its own decision after consulting with and accommodating indigenous communities along the route.
Heurtel was asked Tuesday whether that case had anything to do with Quebec’s decision to push ahead on the legal front.
“It definitely had an impact but it wasn’t the only reason we decided to press forward,” he said.
B.C. has imposed five conditions on oil pipelines that cross the province. The conditions include receiving regulatory environmental approval, First Nations support and a test on the economic benefits.
Companies must also have systems in place to respond to spills on land and in water as well as plans and programs to recover anything that is spilled.
Former NEB chairman Gaetan Caron, who is now with the University of Calgary’s School of Public Policy, said there’s nothing particularly new about provinces voicing concern over a project’s environmental impact.
“What has changed for the NEB has been the politicization of regulatory process for pipelines.”