Double-dipping on GHG emissions: Federal government seeks more leverage to kill Energy East
The National Energy Board (NEB) is now asking the general public whether upstream and downstream emissions should be factored into their pipeline approval process.
The changes, if any, would be applied to TransCanada's 1.1 million bbl/day Energy East pipeline.
Under the current process, the NEB calculates emissions from construction and operation of the pipeline itself, and not emissions from oil producers or consumers.
Once the NEB completes its review, the Canadian Environmental Assessment Agency (CEAA) then releases another report on upstream emissions, including extraction, processing and refining, which form part of the federal government's "new" approval process.
CEAA released its first upstream emissions report last May as part of its approval of the Trans Mountain Expansion Project (TMEP). The rather generic report concluded that oil production growth is more closely correlated to oil prices, and additional volumes would likely just shift onto rail cars if pipelines become constrained.
The NEB is now asking the public if they should consider:
- impacts on Canada's total GHG emissions
- potential changes to the amount of oil produced (upstream emissions)
- potential changes to the amount of oil consumed (downstream emissions)
In addition, the regulator is asking whether the "potential impacts that government GHG strategies, policies, laws, and regulations (including ceilings and pricing) may have on the availability of oil supply and markets underpinning the need for the Project and its economic and financial considerations."
Translation: If Alberta sticks to its 100 Mt/yr carbon limit, oil production will become capped by about 2025, eliminating the need for Energy East.
The NEB had previously always maintained that upstream and downstream emissions, as well impacts on climate change in general, extend far beyond the scope of assessing the pipeline itself, which is just a mode of transportation.
Upstream GHG emissions are already factored into approvals required for the production facility itself. Asking the pipeline operator to justify upstream emissions is therefore redundant and a duplication of the environmental review process.
As for downstream emissions, the world consumes about 95 million barrels of oil per day, regardless of its origin or how much oil is produced in Canada. Pipelines impact how crude oil is distributed - in essence, which customer burns which barrel of oil, but not the total barrels consumed.
The public is being given to the end of May to submit comments to the NEB Hearing Panel. The NEB is expected to finalize its approval process by the summer.