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Pipelines and the Canadian oil industry

Pipelines and a picture of the oil industry in Canada

Pipelines are a hot topic in Ottawa and across the country these days. Last Wednesday the Liberals outlined their plans for arevised environmental assessment process for pipelines, and on Thursday the Conservatives put forward a motion asking theHouse to support the Energy East pipeline.

Here is the overall picture: the oil industry wants to expand oil sands production in Alberta, but to do so they need to expandpipeline capacity to tidewater to access Asian markets. We already have bitumen and other petroleum products flowing toVancouver through Kinder Morgan’s Trans Mountain pipeline and many pipelines going to markets in the United States, so theindustry does have the capacity to export our oil—it’s a question of increasing that capacity and reaching more markets.

The Conservative government tried for 10 years to get four major pipeline projects going—Northern Gateway, Trans Mountain,Keystone XL, and Energy East. But, despite gutting environmental laws and drastically changing the environmental assessmentprocess to favour the pipeline industry, the Conservatives were unable to get any of these projects to the building phase. In largepart, they failed because of those changes to the process—many Canadians feel the present process lacks credibility.

This led to the Liberal’s announcement about a new interim assessment process for projects under review, namely the TransMountain expansion and Energy East. The new process adds four months to the evaluation period and allows more consultationwith First Nations, but leaves many of the flaws in the National Energy Board (NEB) assessment system unchanged—there isnothing to address questions that companies refuse to answer, nothing to restore cross-examination of evidence. All this is ontop of the fact that the Conservatives appointed several new members to the NEB in the dying days of their government,including an active pipeline consultant.

Adding to the lack of government credibility on pipeline safety was a recent report from the Commissioner on the Environmentand Sustainable Development, which looked at how well the NEB tracks compliance with the conditions it sets, and unfortunatelyfound that compliance was tracked for only half of the pipeline projects examined.

We all know that the Canadian oil industry is in trouble with the fall of oil prices to around $30 per barrel. The loss of jobs inAlberta and across the country is hurting the Canadian economy. It will be many months or years before Canadian petroleumcompanies are profitable again, whether pipelines are approved tomorrow or not. We should take this opportunity to create arobust, open and fair assessment process that Canadians can trust, and then promote safe, sensible projects that include acomponent of refining raw bitumen or crude oil so that we can get the best price for these non-renewable resources, and leave alegacy that will benefit not only ourselves but our grandchildren as well.