The federal government is applauding the recently released U.S. government’s report on the Keystone pipeline and the National Energy Board’s report on the Enbridge Northern Gateway pipeline as evidence that these pipelines will not cause environmental problems. Such a conclusion is unwarranted.
The U.S. report confirms that the oilsands produce “dirtier” oil: they generate on average 17 per cent more carbon pollution than other oil used in the U.S. The U.S. report does state that Keystone will not increase oilsands pollution because if Keystone is not built, other projects will take its place, leaving oilsands production unaffected.
But this means that with or without Keystone, there is still the mammoth environmental problem of a 38 per cent increase in carbon emissions from oilsands development.
The NEB report on Enbridge, meanwhile, has such serious flaws that it cannot be relied on to make a decision on the controversial pipeline. The board concludes that there will be significant adverse effects from large oil spills, but dismisses this concern on the grounds that the likelihood of a spill is low.
The problem is that the NEB committed a legal error by not fully assessing the impacts of oil spills and ignored evidence that shows that even a small spill will cause significant impacts. The NEB also did not fulfil its legal obligation to provide detailed estimates of the likelihood of spills to support its conclusions.
In fact, the evidence that the NEB did have is inconsistent with its conclusion. The NEB quotes Enbridge’s evidence stating that the probability of a spill is 93 per cent, which is highly likely by any standard, while other evidence submitted by interveners concludes that a large tanker spill is also highly likely.
The NEB conclusion that spills are unlikely is a critical error, because if it had concluded that environmentally damaging spills are likely, it would be required to recommend rejection of the Enbridge pipeline unless it showed that accepting the risks of spills is justified by offsetting benefits.
This leads to the second major flaw in the report: determining if the benefits of the Enbridge pipeline exceed the costs.
The NEB had access to two cost-benefit analyses. One submitted by interveners concludes that the costs of the pipeline exceed benefits by between $400 million and $2.2 billion before environmental costs are included. If environmental costs are included, the net cost to Canada is even higher.
The other cost-benefit study, submitted by Enbridge, concludes that benefits exceed costs only if the pipeline is successful in increasing Canadian oil prices. The NEB states that it was unable to conclude that the pipeline will increase oil prices and acknowledges that without assumed oil-price increases, the Enbridge benefit-cost study concludes that the pipeline results in a net cost to Canada.
A third flaw is that the NEB did not have adequate evidence to conclude that the Enbridge pipeline is needed. Enbridge has been unable to sign shipper contracts, which the NEB considers important evidence of need, and Enbridge’s own evidence shows that if the pipeline is not built, there are alternative pipelines that would meet the demand.
This is also confirmed by the U.S. Keystone report that concludes that because there are so many alternative transportation options, the cancellation of one pipeline will have no effect.
A fourth flaw is that the NEB did not evaluate alternatives to the Enbridge pipeline. There are at least six alternatives to be completed before 2020: two to ship oil to Eastern Canada, two to ship oil to the U.S. and two (including one from Enbridge) to ship by tanker from the B.C. coast.
Given that there is not enough demand to justify all six projects, the rational approach is to determine which of these projects best meets Canada’s interest. What this analysis would show is that these other projects are lower risk than the Northern Gateway because they can use existing right-of-ways, and four of them do not require tankers along B.C.’s coast.
Instead of simply applauding the findings of these two pipeline reports, the federal and Alberta governments need to address the public’s concerns by significantly reducing carbon emissions from the oilsands and by getting the information necessary to make an informed decision on Enbridge and the alternative means of transporting oil to market.
The Enbridge hearings also show that the federal government needs to reform the assessment process by adopting the U.S. approach of having independent scientists complete the impact assessment instead of relying on the pipeline company to undertake the assessment of its own project. In this way, we would have the unbiased analysis necessary to make informed decisions.
Thomas Gunton is director of the resource and environmental planning program at Simon Fraser University and is a former B.C. deputy minister of environment.
