Authority to approve the Northern Gateway oil pipeline still resides with the federal government, but British Columbia’s May 31 submission to the federal Joint Review Panel dealt a fatal blow to Enbridge’s current application. “Our government does not believe a certificate should be granted,” B.C. provincial Environment Minister Terry Lake stated, at least not until Enbridge offers up better spill response provisions and a “financial structure to handle any incidents.”
Still, B.C.’s statement was “not a rejection of heavy oil projects” outright. It leaves the door open for both a revised application from Enbridge and one from Kinder Morgan for the Trans-Mountain Expansion project, expected later this year. In that respect, the re-elected B.C. Liberals have distanced themselves from the NDP opposition led by Adrian Dix, who during the campaign leading up to the May 14 vote said he would use his powers to block expansion of Alberta’s oil exports off the West Coast.
A constitutional crisis, over one province’s power to stifle another’s economic aspirations, has been averted for now. But it’s clear that pipeline boosters must take more seriously the five conditions Premier Christy Clark laid out last summer to obtain B.C.’s consent.
The first condition is approval of the federal panel. The others leave a lot of room for interpretation: setting up world-leading spill-prevention protocols, implementing similarly rigorous spill-response systems, addressing First Nations’ opportunities and treaty rights, and ensuring B.C. gets its “fair share” of economic benefits.
The final condition is the stickiest. A Canadian Energy Research Institute analysis last year estimated each pipeline would return more than $4 billion in additional gross domestic product to B.C. over the next 25 years while generating handsome tax revenues and creating thousands of jobs during construction. But that’s evidently not enough even for the moderate middle of the electorate that pushed Clark over the top.
Ottawa, or the pipeline companies, could craft some sort of financial package that ensured B.C. received a greater financial benefit to compensate for the environmental risks, says George Hoberg, a professor of natural resource policy at the University of B.C. “Perhaps the most straightforward step would be to supplement liability insurance to ensure the province was not on the hook for paying for cleanup in the event corporate liability insurance is exhausted,” he says. “Another would be to simply find a way to transfer revenues or fiscal capacity to the province, such as some kind of levy on the pipeline.” These types of side deals may set a bad precedent, however.
Alberta Premier Alison Redford, who last year urged Clark to take a stance on the pipelines, is now preaching patience. “I think it’s early days in British Columbia. I think we’ll just let some time pass,” she said following the election. The western premiers are expected to meet in the next couple of months to discuss economic opportunities.
Meanwhile, public opposition to pipelines remains fierce. “If Clark moves into a more pro-pipeline position, it would activate that latent opposition, and it would become a very significant liability for her,” says Hoberg. Even those who believe the pipelines should be built can see how high the hurdles are. Says Peter Howard, chief executive of CERI: “I think the pipeline should be built. It’s something that is needed for the hydrocarbon sector. I think it’s needed for Canada.” But, he adds, “the hurdles are there. They’re big.”