By Julie Green The Joint Review Panel finally weighs in on the MacKenzie Valley Pipeline, but what will happen to their 176 recommendations?
It’s hard to believe now, but in the spring of 2006, there was plenty of optimism that a natural gas pipeline would be built down the Mackenzie Valley, with construction starting by the end of the decade. Gas stranded in the Mackenzie Delta since its discovery in the 1970s would at last flow 1,200 kilometres south to the pipeline grid and far-away markets. Imperial Oil – on behalf of its partners, ConocoPhillips Canada, Shell Canada, ExxonMobil Canada and the Aboriginal Pipeline Group – had filed the applications for the Mackenzie Gas Project (MGP) in the fall of 2004. Then estimated at $7-billion, it would be the largest construction project the North had ever seen. The federal and territorial governments, along with the Dene and Inuvialuit, had created a seven-member joint review panel (the JRP) to conduct the environmental assessment, according to a plan developed by the plethora of regulatory agencies with authority in the North. This time it wasn’t a matter of if, but when, for the Mackenzie Valley pipeline.
Or at least that’s how it seemed to Hyacinth Kochon and his wife Marie. The elderly couple was among dozens of people crammed into the Colville Lake gym in April 2006 for a one-day JRP hearing. “It just sounds like it’s useless to say anything because it sounds like it’s already planned to go ahead,” said Hyacinth, when it was his turn to talk. “Are you really going to go through with the pipeline?” Marie asked the panel. “I thought maybe you would start maybe next year or the next year,” she explained.
Panel chairman Robert Hornal was anxious to nip that talk in the bud. The veteran bureaucrat and consultant wanted the Kochons and everyone else to know he was not convinced the pipeline would proceed. “We’re here to try and learn about your concerns and to try and express those as best we can to the government,” he said. “In no way is it a done deal at this point in time.”
And it still isn’t. In fact, many say the MGP is less likely to be built now than ever before. Imperial’s last cost estimate, in 2006, came in at over $16-billion and natural gas prices have remained stubbornly low. All that mid-decade optimism has been dissipated by new natural gas finds closer to existing pipelines, and the long delay in finishing the environmental assessment hasn’t helped – instead of 18 months, it has taken more than five years.
The impatient wait for the JRP’s report finally ended on December 30th. “Foundation for a Sustainable Northern Future” was published online that afternoon to an enveloping silence – for the most part – while those with an interest in the MGP digested the 50-page executive summary, a prelude to the massive 679-page report. The panel concluded the project is unlikely to create significant adverse impacts and in fact it “would likely make a positive contribution toward sustainability.” But there’s a giant “but” – that conclusion only holds if all 176 of the panel’s recommendations to offset the downside of development are fully implemented.
There was a polite and positive initial response from most quarters, whether from relief that the JRP had finally reported, or from a quick and cursory read of the report. “We’re very happy the JRP has concluded that the MGP is needed to provide a sustainable northern future,” said APG chairman Fred Carmichael. “Their view is consistent with ours.”
But one of the panel’s harshest critics had little good to say. “The only thing that’s good is that it’s over,” said Tom Zubko, the Inuvik-based publisher of PermaFrost Media. He is unimpressed with the report itself, which he describes as shallow and repetitive. He believes it adds little to previous reports on Mackenzie pipeline construction produced in the 1970s and 1980s.
Key to understanding the number and type of the recommendations this time around is the panel’s deliberate use of the word “sustainability.” For the panel it means “ensuring net gains without significant adverse impacts during the life of the Project… and associated opportunities as a bridge to a desirable and durable future.” The panel readily admits it’s difficult to see what the future holds – “less and less information was available the further one projected into the future,” says the report – yet additional development to bring natural gas production over the 1.2 billion cubic feet (Bcf) mark is “highly likely.”
Walking the fine line between the known and the unknown, the panel has produced a blueprint for a utopian society, a better place for all Northerners to call home. And what will that future look like? The federal government will finally implement the cumulative impacts management program – “a critical element in the foundation for the future” – which was set out in environmental management legislation more than 10 years ago. Land use plans will be completed for each region. Conservation areas identified by Northerners will be withdrawn from development. Endangered animals will be protected by management and recovery plans. There would finally be an agreement with Ottawa to share resource revenues with territorial and aboriginal governments, and if that decades-long project isn’t finished before gas begins to flow, half of the royalties earned with be set aside in trust. There will be more help for people who have addictions, who are homeless, fleeing family violence or prevented from working because they lack day care. Those who need better training and education to get pipeline and exploration jobs will get it. It’s a vision of the North through rose-coloured glasses, where money is no object.
All this attention on government is essential to bolster sagging public confidence in how prepared any level of government is to manage development. “The Panel was provided with evidence… of government shortcomings on delivering on its legislated obligations and existing commitments, and meeting the spirit of those commitments,” the report says. As a result, there aren’t only 176 recommendations, but recommendations that give step-by-step directions. For example, the panel wants to see proponents reach harvester compensation agreements with each of the regions along the pipeline right-of-way. The recommendations include details about the timing and content of the agreements.
To ensure all these recommendations are implemented, the panel wants an independent body to monitor them annually and publicize their results. The first of those assessments is due a year after government responds to the report. This step is “required in order to give confidence to the Panel and others that the Panel’s recommendations that are accepted will in fact be fully and effectively implemented.” Or in other words, the panel is attempting to ensure this report – unlike so many others - doesn’t gather dust.
Kevin O’Reilly estimates he’s read 90 per cent of the report, and he’s impressed. O’Reilly is a volunteer with the Yellowknife social action group Alternatives North, and he was a busy intervener during the hearings. “The report’s title [Foundation for a Sustainable Northern Future] may be corny, but these are things that need to be done, project or not” says O’Reilly, adding that the panel’s careful attention to the 115 days of evidence is reflected in the report. “They listened, and they attempted to respond in a meaningful way,” he says. But, he concedes, “there’s no doubt they took a broad interpretation of their mandate.”
“Too broad,” say critics like Tom Zubko. “There’s lots of stuff – like protecting everything – that should not be there,” he says.
“The scope of the panel’s recommendations may at times have stretched the limits of their mandate, particularly in the areas of cumulative impact monitoring and land use planning,” said Nellie Cournoyea, the chair of the Inuvialuit Regional Corporation, in a news release. “We are eager to see the response to the many recommendations directed at the federal and territorial governments,” she says. Or in other words, which ones are going to stick.
Choosing sustainability as a focus makes sense to Rob Powell. He’s the Mackenzie River basin director for World Wildlife Fund Canada. “The extent of government and community preparedness makes perfect sense as criteria for the project,” Powell says. He believes the large number of recommendations were necessary to move Imperial Oil’s original application from the conceptual stage to the tangible. “The recommendations are designed to improve on what the proponents brought to the table,” he says. Environmentalists have long lamented that even at seven thousand pages, Imperial Oil’s environmental impact statement was incomplete.
Not that the greens got all they wanted. The panel didn’t buy their argument that clean natural gas from the North would be shipped to Fort McMurray to make comparatively dirty synthetic oil – or that it was the panel’s job to worry about the end use for the gas. But the panel did weigh in on climate change. It wants to see greenhouse gas emission targets set for the Mackenzie pipeline, if not offset with carbon neutrality programs. The panel also wants the federal government to get on with the job of setting national GHG targets.
O
ttawa won’t go for those greenhouse gas emission recommendations, or the resource royalty agreement,” predicts veteran oil and gas analyst Ian Doig, publisher of Calgary-based Doig’s Digest. “They’re going to say ‘that’s not your bailiwick.’” In the end, the report only helps to advance the project “because it doesn’t say no,” he says. “It’s a nice looking report for a library shelf – lots of places to stick maple leaves,” he jokes.
APG president Bob Reid also says the JRP may have overstepped its jurisdiction in making recommendations about development beyond the 1.2 Bcf a day the proponents applied for. These recommendations “would tie the hands of development in the future,” he says. And although the APG won’t comment on recommendations addressed to government, Reid knows that government is unlikely to endorse any action that will fetter future decision making.
Reid’s focus is the 70-odd recommendations that are directed to the National Energy Board. These are the here and now recommendations that will ultimately shape the final terms and conditions of the project. There are “no showstoppers” among them, Reid says, but 20 of the recommendations are “of concern.” Proponents faced a tight deadline to articulate their concerns, with their response to the JRP report due to the NEB at the end of January. These comments, along with those from any other interveners, will be posted on the NEB public registry, which is available online. “Nothing has gone on schedule but now the process is back in the hands of an experienced board,” says Reid. “I’m reasonably confident there’ll be a decision this fall.”
The government review of the report is shrouded in the ice fog common to a Northern winter. Requests for comment for this article went nowhere by deadline. The territorial government announced in a news release that its response will be provided to the federal minister of the environment in June. The federal government hasn’t said how long its review will take, but sources say it’s also expected to be complete in June or July. As a result, if they make them, both governments will present their final arguments in April without submitting their formal response to the NEB. Sources say federal reviewers have been directed to accept every recommendation possible, for political reasons, and to narrow the list of recommendations that need to be modified or rejected. Sources say that leaves 40-odd troublesome recommendations.
Key to the government’s review – and the time it’s taking – is the cost of implementing all the recommendations. The panel doesn’t include an estimate in the report, but the price tag will be millions – if not billions - of dollars. “I’m worried about how this will play out in the financial realm,” says O’Reilly of Alternatives North. “There’ll need to be a Treasury Board submission,” he says, meaning a detailed cost estimate and rationale at the federal level for spending on the recommendations.
The timing of the government response is at best confusing. “Government had two years to work on how and when it would respond,” says O’Reilly, and yet “the best we get is a backgrounder [from the federal government] with no timing or mechanics about how the review of the report is going to work.” O’Reilly is especially concerned that if recommendations are going to be rejected or modified, interveners get a chance to make known their views on the changes.
The Dehcho First Nations were quick off the mark in expressing their unhappiness with the NEB schedule. The group filed a motion with the NEB asking for a delay in the final arguments scheduled for April. Calling the timing of the hearing “unreasonable and unfair,” DFN regulatory consultant Joe Acorn suggested it would give governments an advantage and “deprive us of a major piece of information that will be necessary for us to have a final position on the project.” But the NEB didn’t see it that way, and dismissed the motion out of hand. In the end, the NEB is only considering the recommendations within its mandate – and many addressed to the federal government fall outside of that – and in the political realm.
The debate about the panel and its report is going to continue, especially on the question of what the panel accomplished with the years it spent on the process. O’Reilly believes the report represents an important advance in environmental assessments. “Government has a lot of homework to do to properly manage development and ensure people benefit from it,” he says. That’s a view Rob Powell from the WWF shares. “I think they’ve done the North a great service, and maybe that’ll be recognized eventually.”
Meanwhile, Inuvik businessman Tom Zubko is characteristically blunt. “Industry has been in a chokehold. There were 18 to 20 camps [in the Mackenzie Delta] in 2003 with 1,100 people working. They shut that down. That lost or stranded investment is worth millions,” he says. “And you can’t get that back, it’s gone.”
