Government approves Trans Mountain pipeline expansion project

Justin Trudeau addressing the audience in the Health Sciences Building of the University of Saskatchewan. Photo: Arthur White-Crummey/Daily Herald.

The federal government has approved the Trans Mountain Pipeline expansion and is anticipating work to begin on the project this summer.

Tuesday was the deadline for Prime Minister Justin Trudeau’s government to decide whether the controversial project would go ahead.

Trudeau added during the announcement that all revenue from the project, which his government estimates at $500 million per year in corporate income tax, in addition to proceeds of the pipeline’s sale, would go towards Canada’s transition to clean energy.

He also said that the government will engage with Indigenous groups on ways they could share in the expansion, through equity ownership, revenue sharing or other agreements.

The government originally approved the project in 2016, but the Federal Court of Appeal, citing inadequate Indigenous consultations and incomplete environmental reviews, set aside that decision last summer. This approval takes into account a new approval by the National Energy Board that came along with 156 conditions that would need to be met for the project to proceed. It also included recommendations outside of the board’s purview. The federal government accepted all 156 conditions, strengthening six of them, and committed to the 16 recommendations that fall outside the board’s mandate. The conditions cover such things as emergency preparedness and response, pipeline safety and integrity and ongoing consultation with affected Indigenous communities.

The federal government purchased the pipeline in 2018 for $4.5 billion from Kinder Morgan after political uncertainty left the project in limbo. Tuesday, Trudeau and Finance Minister Bill Morneau reiterated that the long-term plan is to sell the project back to the private sector.

The decision comes a day after the federal government declared a national climate emergency, but Trudeau said the decision to move forward on pipeline construction isn’t contradictory to the nation’s environmental goals.

“We do not see these goals as irreconcilable,” he said, “We see them as complementary. We want good middle-class jobs now and good middle-class jobs for our kids. In order to do that we need to create wealth today so we can invest in the future.”

Trudeau said the pipeline is about finding more markets for Canadian oil.

“(It) could solve a core economic challenge we face,” he said.

“Right now, we basically only have one customer for our energy resources, The United States. Right now, when it comes to our conventional energy, we do not (have choices).”

He added that oil transported by rail has almost doubled over the past number of years and that by adding more market access, the discount on Canadian oil should be alleviated, leading to higher government revenue.

Increased emissions accounted for

According to a document released by Environment and Climate Change Canada, the potential increase in emissions from the project is already accounted for in the nation’s emissions projections and covered by a legislated cap on oil sands emissions.

“Environment and Climate Change Canada assessed the potential upstream greenhouse gas emissions from the project and found that the project is unlikely to result in incremental emissions beyond those already included in Canada’s national emissions projections,” the government wrote.

“Furthermore, the project and any growth in oil and gas production associated with the project are not likely to increase emissions above Alberta’s 100 million tonnes legislated a cap on annual oil sands emissions. Alberta’s cap on emissions was instrumental in the Government of Canada’s decision to approve the project.”

The Trans Mountain Corporation will be required to offset the estimated one million tonnes of emissions created by the pipeline’s construction.

Emissions will come from two sources, land activities and shipping. The Trans Mountain Corporation estimates that the project will emit about 400,000 tonnes of greenhouse gas emissions each year, mostly from the electricity needed to power the compressor stations, ground transportation and possible methane leaks.

The government asserts those emissions are expected to decline as a result of carbon pricing, methane regulations and a forthcoming Clean Fuel Standard. As for shipping emissions, the government will work with the International Maritime Organization to offset increases over a given baseline.

Government expects opposition

Government officials confirmed that some opposition is expected to the decision. Trudeau acknowledged as much in his public comments Tuesday.

“I know some people are disappointed by this decision,” he said. “I understand your disappointment. I know for some, your concerns are very tangible. Our top priority is making sure there is no spill in the first place.”

He appealed to Canadians interested in protecting the environment that he wants what they want — sustainable energy and a cleaner environment.

“I want that too,” Trudeau said.

“But in order to bridge the gap between where we are and where we’re going, we need money to pay for it.”

Trudeau said there will be a demand for existing resources, and that there are “hundreds of thousands of good jobs” that depend on that demand.

“The truth is, it doesn’t make economic or environmental sense to sell any resource at a discount. Instead, we should take advantage of what we have and invest the profits in what comes next, building a clean, energy future that is already at our doorstep. This isn’t a choice in producing more conventional energy or less, it’s a choice about where we can sell it and how we get it there safely.

“We know there is no greater solution than one built on compromise.”

Trudeau said that pipelines are safer and less emissions-intensive than shipping oil by rail. He also stressed that the work between his government and communities unhappy with the decision would be ongoing.

“We recognize and understand that there are people out there for who no amount of accommodations or conditions or changes to the plan would have made the purchase … and the approval of the Trans Mountain Pipeline expansion acceptable. Those people will not be convinced by the arguments we put forward and we accept that. They will use the legal means at their disposal to advance that argument,” he said.

“People expect us to move forward in ways that create good jobs in the future and protect our environment for our kids.  I know that the vast majority of Canadians understand that we need to grow the economy and protect the environment at the same time.”

In answering reporter questions, Minister of Natural Resources Amarjeet Sohi confirmed discussions with concerned Indigenous groups are ongoing.

“The conclusion of the consultation process does not mean that our engagement with the Indigenous community ends. It will continue and we will continue to explore options with … the Indigenous leaders who still have outstanding issues related to this project,” he said.

No firm timelines on start date, sale of project

While construction of the project is expected to begin this summer, no timeline has been given on exactly when that will occur.

“The plan is to start construction this summer,” Trudeau said, adding that there are still some steps to complete with regards to obtaining the necessary permits.

There was also no timeline given for when the government would look to sell the project, though Morneau seemed to indicate the government isn’t currently seeking buyers.

“The situation now is we’re in the process of moving forward, not in the process of actually engineering a sale,” he said.

‘We want to ensure that meaningful Indigenous participation is part of the sale.”

Trudeau said the government only purchased the project to “de-risk” it.

“We will be seeking new owners at the appropriate time when the project is de-risked,” Morneau said.

Reaction

The decision to proceed with construction of the project beginning this year was met with appreciation from both the Saskatchewan Party and the provincial NDP.

“Today’s announcement … is good news for all Canadians,” Premier Scott Moe said in a written statement issued over Twitter.

“Not only is TMX crucial to our energy sector, market access and jobs but after the (federal government) purchased the pipeline over one year ago, they put billions of taxpayers’ dollars on the line.”

Moe said Trudeau’s statement that shovels will be in the ground this season is of “utmost importance” to increase the capacity for energy products to reach markets. He also reiterated his concern that Bill C-69 would mean no new pipeline or industrial projects would be proposed or built in the future.

“We must also ensure that the TMX pipeline is not the last pipeline project to receive approval in our nation,” he wrote.

NDP leader Ryan Meili also briefly tweeted about the decision.

“This is good news for Saskatchewan workers (at Evraz) in Regina who’ll be building the pipe,” he said.

“Earmarking the revenues for clean energy projects is also a great move.”

Alberta Premier Jason Kenney also praised the decision, while criticizing previous decision to cancel Northern Gateway and Energy East, as well as detailing concern with proposals in Bills C48 and C-69.

“We need to get a fair price for our country’s energy to create good jobs and pay for public services,” he said.

“Approval is not construction. So now let’s get it built.”

BC Premier John Horgan was less pleased.

“We are disappointed that the federal government has re-approved a project that poses great risks to our coast, our environment and our economy,” he said in a written statement.

“Our government has a responsibility to protect the interests of British Columbians and that’s what we’ve been doing. We will continue to defend our environment, our coast and the tens of thousands of jobs that rely on them.”

Conservative leader Andrew Scheer called this approval “meaningless” without a date or a plan to get the project built.

Federal NDP leader Jagmeet Singh also decried the decision, describing the pipeline as “directly threatening our environment.”