Ontario, Quebec want Energy East's greenhouse gas impact considered

CALGARY - Ontario and Quebec have agreed greenhouse gas emissions must be considered when it comes to the proposed cross-Canada Energy East pipeline.

But the new boss of the National Energy Board, the agency tasked with weighing the $12-billion proposal, said climate change policy isn't within its purview and the board doesn't intend for its hearings to become bogged down in that debate.

Ontario and Quebec, two of the six provinces Energy East would traverse as it carries crude from Alberta to the East Coast, announced a raft of agreements on Friday, including on energy matters.

Premiers Kathleen Wynne and Philippe Couillard on Friday agreed to build "a stronger and more competitive low-carbon economy" to fight climate change and set out a list of "principles" for new oil pipelines in their provinces.

One of those would be to "take into account the contribution to greenhouse gas emissions."

NEB chair and CEO Peter Watson, who's been in the job for three months, said the NEB weighs the emissions pipelines themselves generate — a minuscule amount.

But, much to the chagrin of pipeline critics, Watson said it's not the board's job to look at a project's enabling role in oilsands growth and the rising carbon dioxide emissions that would accompany that development. Nor is it the board's job to look at how crude products are burned for energy at the other end of the pipe.

That authority rests with provinces and other regulators, he said.

"Our job is to assess the need for new cross-border energy infrastructure and to make sure it can be constructed and operated safely and in the public interest," Watson said in a speech to the Economic Club of Canada on Friday.

"Our job is not to conduct a referendum on society's use of fossil fuels every time a proponent proposes to build a section of pipe."

Watson also said reviews must be conducted in a timely manner, but that he "won't hesitate" to extend the legislated 15-month time limit if more information is needed or more stakeholders need the chance to be heard.

Watson said the energy board used to garner little attention, but now he's in the "eye of the storm" as the issue of pipeline safety rises in the public's consciousness. Last year, the board fielded 600 inquiries from the media, compared with just 80 in 2008.

The company proposing to build Energy East, TransCanada Corp. (TSX:TRP) filed its application — all 30,000 pages of it — to the NEB last month.

The project would connect more than one million barrels a day of Alberta crude to export points and refineries in Quebec and New Brunswick, making use of a repurposed natural gas pipeline for two thirds of the way and building new pipe for the rest.

Besides emissions, Ontario and Quebec's other oil pipeline principles centre on safety, emergency response, aboriginal consultation, economic benefits, the company's responsibility to address a spill and the interests of natural gas consumers.

"We are studying these principles and look forward to working with both governments in the appropriate manner to make the project successful," said TransCanada spokesman Tim Duboyce, adding the project would create thousands of jobs and bring in billions of tax revenue in the two provinces.

Federal Natural Resources Minister Greg Rickford said he doesn't think of the demands by Ontario and Quebec as a lack of confidence in the NEB process.

"They just want to make sure that their interests are represented and that's a conversation that goes directly, in this instance, between TransCanada and those provinces."

Alberta Premier Jim Prentice said he's not concerned Ontario and Quebec may stand in the way of the project.

"This project is a nation building project and I take the comments that they made in that spirit," he said, adding he plans to meet with his counterparts in both provinces in the weeks ahead.

"I think we can all work together and I think we can do business together."

Tim Gray of Environmental Defence said Ontario and Quebec have "shown leadership" with Friday's environmental announcements.

"Specifically, the announcement says that the pipeline must ensure environmental protection and social acceptance," he said.

"Given that the Energy East pipeline is incompatible with these goals, it is our understanding that the pipeline must be rejected by both provinces."

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